Fixing Broken Revenue Channels in a Business Turnaround

When your business hits troubled waters, the first instinct is often to focus on cutting costs. While managing expenses is essential, what can truly make or break a turnaround is addressing your revenue channels. It’s not just about how much money is coming in, but how sustainable and efficient your revenue generation is.

Reviving underperforming revenue streams is critical in ensuring your business doesn’t just survive a downturn but thrives in the long run. This article explores key strategies for identifying broken revenue channels, making tough decisions, and choosing the right revenue streams for sustainable growth.

Identifying Broken Revenue Streams

Before you can fix anything, you need to understand where the problem lies. The revenue channels that once worked during your company’s growth phase may no longer function effectively during tough times. For example, the downturn of a particular industry or client segment, or the commoditisation of your products and services, can all contribute to revenue declines.

Look for signs such as:

?? Consistent Declines: If certain revenue streams have been steadily decreasing over several months or quarters, it’s time to assess their viability.

?? Dependency on Few Clients: Relying too heavily on a few clients or industries can backfire if those clients experience downturns.

?? Price Sensitivity: If your products or services have become commoditised, you may notice increasing pressure on margins as customers opt for cheaper alternatives.

Tough Choices: What to Fix and What to Let Go

Not every revenue channel is worth saving. During a turnaround, it’s crucial to take a hard look at which revenue streams are salvageable and which need to be abandoned. Holding onto a declining revenue channel can drain resources and attention that could be better used elsewhere.

To determine what to fix and what to let go, ask yourself:

?? Does this channel align with our future strategy?

?? Can it be optimised for better performance, or is it fundamentally flawed?

?? Is the demand for this product or service declining due to factors beyond our control?

In many cases, focusing on the strongest, most promising revenue streams - and letting go of the rest - can be the key to your turnaround.

Choosing the Right Revenue Channels for the Future

Once you’ve identified the underperforming areas, it’s time to focus on the revenue channels that will drive your business forward. Look for areas where you can differentiate your products and services from the competition and deliver value in a unique way.

Key factors to consider when choosing your future revenue channels include:

?? Scalability: Will the channel grow as your business scales, or will it hit a ceiling?

?? Profitability: Is the revenue stream bringing in high-margin sales, or are you chasing volume at the expense of profits?

?? Market Demand: Are there emerging trends or sectors where your business can meet demand?

Ruthless Focus: Doing Fewer Things Better

One of the biggest challenges in a turnaround is maintaining focus. Businesses often spread themselves too thin, trying to pursue every possible revenue stream. However, during difficult times, doing fewer things but doing them exceptionally well can make all the difference.

Streamline your offerings to focus on the most valuable products or services. Narrowing your focus allows you to allocate resources more effectively, improve operational efficiency, and provide better customer experiences.

Operational Efficiency and Revenue Channels

It’s not enough to simply fix revenue channels; you also need to ensure that your operations support them efficiently. Misaligned operations can negate the benefits of even the most promising revenue streams. For example:

?? Automate Processes: Look for opportunities to reduce costs through automation, especially in order processing, customer service, and fulfilment.

Consider a small manufacturing business that produces custom metal parts. The company was manually processing orders, from receiving them via email to entering them into a spreadsheet, which required significant time and effort. Additionally, customer service inquiries were handled one by one via phone or email, slowing down response times. To improve efficiency, the business implemented an automation solution using a cloud-based software for order processing and fulfilment. Now, customers can place orders directly through the company’s website, where the system automatically processes the order, updates inventory, and generates shipping labels. Additionally, they integrated a chatbot to handle frequently asked customer questions and track order status. This allowed the customer service team to focus on more complex inquiries and saved hours of manual work. The result? Reduced order processing time by 50%, fewer errors, and more time for staff to focus on scaling the business.

?? Enhance Supply Chain: Strengthening your supply chain can help you deliver your products and services more efficiently, supporting growth in your revenue channels.

By aligning your operational strategies with your revenue channels, you’ll not only optimise existing streams but also position your business for sustainable long-term growth.

Conclusion

Fixing broken revenue channels is a critical step in any business turnaround. It requires a careful assessment of what’s working, what isn’t, and where the future potential lies. By focusing on scalable, profitable revenue streams and aligning your operations to support them, you can navigate through challenging times and emerge stronger than before.

If you’re looking to dive deeper into assessing your business health and setting up your company for long-term success, visit our Business Health Check for tailored insights and strategies.

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