How Do You Save a Business that is Failing

.....extract from a new book by John Mason and staff

Recognising Problems - Where Did Things Go Wrong?

Successful businesses do not remain stagnant.  A good business manager recognises this fact, and is aware that a business only has two realistic options – to get better, or worse. Remaining the same is never an option.

It is important to recognise problems as early as possible. Delays in recognising problems often makes them worse and can cause delays to finding possible solutions.

A business will fail for a number of reasons.  It may fail because your idea is not a good one in the first place. It might fail because there are too many similar products on the market, or because you have not marketed your product well enough. Whatever the reason is, this book is going to help you to save your business before it reaches the point of no return.
 

How to Recognise Problems
 
Problems can either be external or internal.

• External problems - are problems created by the world outside of the business. They may have social, economic, or political origins. They may be caused by other changes like a recession, amendments to government regulations, a new competitor entering the market place, or demographic changes in your customers (e.g. relocation of a major customer to a different city).

• Internal problems - are issues that are created by the business itself.  They might be related to insufficient or inadequate choices made - such as a poor marketing strategy, overspending which has resulted in unmanageable debt, or not updating soon enough. Internal problems can also occur when leadership is poor, time and resources are underutilised, or the business offers goods and services which it does not have the capacity to deliver. 

These are only some of the problems that can arise. Surprisingly, most business managers will have some degree of awareness about what is going wrong but more often than not, fail to take the time to properly reflect upon and understand the problem.

When things are bad, frequently the natural reaction is to work harder and longer hours in order to try and correct the problem. When a manager works more hours though, they tend to become more tired and less capable of reflecting on the problems at hand. This, in turn, can cause them to very readily lose perspective.

Ironically, the solution to a declining business may well be to work less hours rather than more - to refresh the body and brain, stand back and take a look at the business from a different perspective.

If this is impossible for the manager; it may be necessary to find someone who can look at the business with clearer eyes and a sharper mind. In some instances, this may be someone who is close to, and trusted by, the manager (e.g. a spouse, friend or colleague), or perhaps an external consultant. 

Someone close to the manager will already have (to some degree) an understanding of the business, but they may also carry some level of prejudice. On the other hand, a consultant will lack familiarity with the business, and that means there is potential for them to not consider some important facts, but they will also lack prejudice. In larger businesses it may be helpful to redeploy a manger or other employee from another part of the business who can offer a new insight into failing business strategies or influences.

The Saving a Business ebook is now available to purchase. Read more here..