A business is a very risky proposition. It requires a lot of skill to manage and run it. You will have to arrange for money to do so, plan proper strategies for sales and marketing. Apart from that, you will also need to follow the best production methods to reduce the costs of overhead, hire the right set of employees, and generate enough revenue to sustain, pay off bills and go ahead.
Given the fact that almost 70 to 80%of entrepreneurs fail to continue with their business for even a decade, you must know that starting a business and funding it properly is not at all easy. In order to succeed you will need much more than a simple ‘can do’ attitude. You will have to be creative, innovative, and decisive and think out of the box for funding your business and running it instead of following a simple run-of-the-mill business approach and technique.
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Ideally, the key to success lies in knowing the right time to cut your losses or expenses and move on. This is ideally the requirement for all and any type of business, whether it is a startup venture or a pivot of any existing business strategy.
Your business can prove to be the best decision in the long run provided you follow these steps to make it sustain and survive. In fact, it is hard for any entrepreneur to let a go a business in which they have put in so much blood, sweat and tears.
The steps to follow
These steps will prevent your business from running into six or seven figures in debt and help you to hang on for a long time. It is better to work on to protect your business before any crisis hits by paying attention to these signs and making changes wherever necessary before it is too late.
- The market disappeared: Before you find that the market has suddenly disappeared, it is better to know the upcoming trends and prepare to make the necessary changes according to the need of the hour. You have to adapt and that too very quickly to the changes so that you do not lose your employees or your business in no time. A talented entrepreneur will consider a new product old the moment it is released in the market. This will push you for continual innovation and at the same time it will ‘wow’ your customers.
- Product and service knowledge: Never try to create an entirely new product or services simultaneously so that no one understands it. It will kill your business. Instead, consider modifying your products or services to break it wide open. Selling a good product or service is all that matters.
- Your customer base: Remember, the number of customers will determine your sales volume and revenue. This is also an important tool for the bankers and private lenders such as liberty lending and others to decide whether or not you are the right candidate to grant a loan should you approach them for one. Therefore, whenever you notice or expect a downfall in the number of customers make sure that you do everything to drive more customers back. You may take help of a business coach for this matter.
- Loss in motivation: You will find times when you as well as your team will have lost all your motivation to do well and go ahead, especially during those times when you find it hard to drive in customers to your shop. Having the enthusiasm and valor to take up challenges face-on and overcoming it is the key to success in this modern, competitive business world. Therefore, when the growth period is over do not let monotony take over and blow out your entrepreneurial fire and flair. Find newer avenues and things that will create a spark or outsource the jobs that no one is willing to do.
- Shun the bad apple: Just as the old saying a single bad apple can rot all in the basket. If you find any such apple get rid of it immediately. Always stick to hiring people with enough experience or those with lots of passion. This will head your business in the right way and will also keep the morale of your employees high. However, simple repurposing at times will do the job instead of firing an employee. This will eliminate the chances and effects of decimated employee retention rate.
- Not making money: When cash flow dries up it will crush your dreams faster. Therefore, you must prevent such situations for which you will have to know when to cut the losses. Review the situation and identify the problem and the cause. Find out whether it is rectifiable or controllable. If it is not then you will have to review the entire business model that you follow. On the other hand, develop your existing plan of action or create a new one if it is controllable.
Even after making all these efforts you may not be able to bring in the necessary changes to save your business. In such situations, you must go back to the basics of your entrepreneurial qualities to determine what exactly went wrong to put your business in such a position. Learn from your mistakes, rectify it and remember that lesson in the future to prevent the reoccurrence of the same situation.
Always have a business plan
You must always have an immaculately designed business plan to follow. The plan must be made based on a few specific parameters that include:
- Contribution of capital
- Credit records
- Management expertise
- Positive cash flow spreadsheets and much more.
Being diligent and committed to your business plan will not only help you to stay on the right track but will also help you to get loans easily when you want business financing. Therefore, craft it carefully and make sure that it covers all aspects of your business from financing to finance management, administration to production and employee management. This will save your business from doom.
Marina Thomas is a marketing and communication expert. She also serves as a content developer with many years of experience. She helps clients in long-term wealth plans. She has previously covered an extensive range of topics in her posts, including business debt consolidation and start-ups.