If your business is facing a crisis and you’re not sure what to do next, there are three strategies you can consider.
Start by determining how bad the situation actually is. Decide if resolving the immediate issue would ease the pressure, and if your business has long-term potential.
If securing funding is the main challenge and the core demand for your product or service remains strong, you have more options than a business facing deeper, more fundamental issues.
Here are three strategies to explore.
If you’re determined to keep the business intact, there are some things you can do to increase the chance of surviving.
Initially, focus on selling current products or services to your existing good customers, as it should be the easiest to do. They know you. Then contact the rest of your customer database with phone calls, emails, visits, social media or e-newsletters with special offers to cross-sell or up-sell to other product lines.
Next, look for wider opportunities to increase sales, as some industries or markets will be doing better than others. There are a number of ideas you could investigate, including:
You could also look at partnering or collaborating with other businesses, some of whom may be struggling but others will be thriving. Do whatever it takes to keep your business afloat until the market corrects itself back to business as usual.
If drastic action is required, consider keeping the parts of your business that work and reinventing or restructuring your business to adjust to the new normal. Take a close look at what can be salvaged, then act like a new startup to build a stronger business on the foundations of the old one. Think about what you would do differently and how it would make your business look.
You may want to:
If you can, identify one or more target markets and design your business to deliver an exceptional service offering in that area. Customers will still need to know what makes your business special to set you apart from competitors, so differentiate with unique products and services.
Once you decide to restructure, obtain as much input as you can from your advisors, existing staff, industry experts and those you trust for business advice. Don’t forget to search the internet, subscribe to industry news, visit business association sites and talk to suppliers to validate your ideas.
If the first two strategies are not feasible, it may be time to consider selling your business or winding it down. This is often a difficult decision, but it could offer a fresh start or a way to recover value from the business you’ve built. When selling, the goal is to maximize price and ensure a smooth transition. A well-prepared sale can bring in more than simply selling off assets, inventory, or real estate. It can allow you to sell the business as a going concern, which typically yields a higher price.
To make sure you get the best return, start by evaluating your business from a buyer’s perspective. Clean up your financials, resolve any outstanding debts, and check that your operations are running smoothly. Buyers are looking for businesses with clear, documented processes and a solid customer base. If you have intellectual property, proprietary technology, or strong brand recognition, make sure to highlight these as assets that increase your business’s value.
It’s also essential to prepare for the legal and financial complexities involved in a business sale. Consulting with professionals, such as your accountant and lawyer, can help you deal with tax implications, make sure proper contracts are in place, and avoid common pitfalls. A business broker can be a valuable asset in finding the right buyer and managing the sale process, from market valuation to negotiating terms and completing the transaction.
Additionally, make sure you have a clear plan for the transition. Buyers may want a smooth handover, including training, customer introductions, and making sure key employees stay on. This helps to protect the long-term value of the business and reassures the buyer that they’re acquiring something sustainable.
Ultimately, selling your business can be a way to move forward, but it requires careful planning, preparation, and professional guidance to maximize its value and minimize risks.
In any crisis, taking decisive action and exploring multiple options will help you navigate the challenges ahead and make informed decisions for your business’s future. Talk to your business partners, family or other business owners and seek expert advice from your business adviser, accountant or industry support if you’re not sure what to do.