My Business Is Failing! What Do I Do?

Are you failing in your business?

No one starts a business intending to fail at it, but a business failure is indeed a reality. Maybe you started your business because you didn’t want to have a job. So, it must be agonizing when your business is failing. 

You’re wondering, where did you go wrong? What can you do to save it? 

I’ll answer your question with one piece of advice: There is no straight path to success.

It took Thomas Edison 1,000 attempts to invent a light bulb before he succeeded, yet he doesn’t see it as 1,000 failures, just 1,000 steps to his achievement. 

Many entrepreneurs have failed in the past – I failed at 13 business ventures before I became a self-made millionaire. When we faced the possibility of failure, it’s tempting to give up. Giving up is easy, but within those days when I feel like my business is failing, is when I really test my strength and determination. 

Statistics say that 30% of new businesses fail within the first two years, 50% within the first five, and nearly 70% fail in their first decade. Can you guess what is the number one reason why businesses fail? 

The top reasons are cash flow problems with 82%, 42% cited an insufficient need for their product or service, followed by a lack of cash, dysfunctional or unmotivated team. Although it’s easy to blame money for the failure of a business, insufficient cash flow could be a sign that something is wrong. 

Give Your Business A Post-Mortem 

Figure out where and what went wrong in your business. When my business is failing, I analyze my entire process, which means I start from the moment I invest, in the sales processes, my business strategy, and clients. You could make a list and determine the biggest contributing factors. 

These are some of the most common reasons why businesses fail, so ask yourself these questions:

• What did you ultimately achieve?
• When you first started, what did you want to accomplish?
• Were you out of touch with your clients?
• Are you in a niche marketplace?
• Was your product or service unique?
• How did you communicate your value proposition?
• Are your expenses higher than sales?
• Did you have a pricing issue?
• Does your product or service add value to the marketplace?

You may have a crucial blind spot that led to a business failure, so include any partners or employees in the post-mortem.

As the saying goes, two brains are better than one. You need a second person’s opinion to help you understand how and why those factors are affecting your business strategy. 

With that said, to keep a healthy and neutral conversation, be balanced in your analysis. Instead of dwelling in your past failures, collect insights to avoid the same mistakes again. When you know which factor is causing your business to fail, it’s easier to decide on a solution. This means, whether to tweak or to start over.  

Use The SWOT Analysis To Review Your Business

SWOT analysis is a framework used to develop strategic planning. It’s a technique for assessing your performance, competition, risk, and potential of your business. This means it evaluates a company’s competitive position through strategic planning, internal and external factors, as well as the future potential. 

Here’s a breakdown of each aspect:  

Strengths

It describes what your organization excels at and your competitive advantages: a loyal customer base, strong balance sheet, strong brand, and unique technology.  

Weaknesses

This stops your company from performing at its optimum level. Which means, a weakness that is damaging internal factors or something that is not working well. So, look at how to make immediate changes or stop what you’re doing entirely.  

Opportunities

Think about the opportunities from external factors that could give your company a competitive advantage. For example, having a high ticket business system. Let’s look at Walmart for instance, they use a low ticket business system and can be found all over the world, focusing on delivering the lowest price possible to their consumers. 

Compared to a company like Apple which uses a high ticket business system, its branding and focus on producing innovative, top-of-the-line products have made them famous internationally. 

Threats

Factors that could potentially harm your company. Common threads could be things like rising costs for materials, tight labor supply, and increasing competition. So, to ensure your SWOT analysis is successful, you could determine which area of your business is affected and quickly investigate to minimize the potential for harm. 

A SWOT analysis is a helpful exercise to analyze your current performance, price, business strategy, and operational processes. On top of that, you could discover areas where you can make improvements. Essentially, SWOT acts as a roadmap to your success. 

Establish SMART Objectives And Develop A Plan

Create a list of your SMART objectives. You could have better clarity and stay focused working towards achieving your objectives. If you learn how to apply SMART objectives effectively with your business strategy, you’ll realize that they are much more efficient than the conventional objectives.  

And here’s what SMART stands for: 

Specific

Be specific with your goals and what you want to achieve. For example, you want to generate additional revenue of 30% by the third quarter of 2020, or if you’re a sales professional who earns a commission as an income. You could be specific with how much you want to make by the end of the month. For example, you can say, “I’m going to make $10,000 dollars of commission by the end of this month.” 

Measurable

Can you determine what you’ve set for your business or yourself to be measurable? Let’s take the same example of $10,000. So, if you’re determined to make $10,000 dollars by end of the month, which means, you need to work harder or close more deals to achieve that figure.  

Achievable

Setting yourself a reasonable target is crucial because, as I said earlier if you want to increase 20% of your income in 30 days, the point is to challenge and motivate yourself to complete it. So, if you set an unreasonable target, it’ll cause stress and decrease your chances of achieving it. But, if it’s too low, it’ll inhibit you from pushing yourself to do more. 

Realistic 

Set a realistic business strategy. Most successful entrepreneurs don’t become millionaires overnight. While it’s not wrong to be ambitious but remember to start off with something more realistic. Again, an increase of 20% of revenue in 30 days is a realistic goal.  

Time-bound

Deadlines may not be favorable to you, but it’s an important factor if you want to have a successful business. A good business strategy must include a reasonable deadline. My coaching business went from zero to $1,000,000 a month in less than 8 months. So, if you have a good team and a brilliant business strategy, you’re most likely to see success. 

Stay In Touch With Your Customers

Without staying in touch with your customers, companies simply won’t be able to survive. Loyal customers could be the success stories of your business. Customer experience is incredibly valuable. Investors often won’t invest in customer experience without proof. So, involve your customers in your business strategy, new product development, and marketing campaigns. Absorb their feedback, embrace it and make them feel important. 

Forbes has compiled 50 statistics proving the value of customer experience for your business. Here are some statistics I find interesting: 

•  Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries. 
• 84% of companies that work to improve their customer experience report an increase in their revenue.
• 73% of companies with above-average customer experience perform better financially than their competitors. 
•  96% of customers say customer service is important in their choice of loyalty to a brand.
• 83% of companies that believe it’s important to make customers happy also experience growing revenue. 
• Customer-centric companies are 60% more profitable than companies that don’t focus on customers.
• Loyal customers are five times more likely to purchase again and four times more likely to refer a friend to the company. 
• American consumers will pay 17% more to purchase from a company with a reputation for great service.

As you can see positive statistics from consumers, it’s important to stay in touch with your customers to gain inputs. You could create a system to collect feedback, these data could be proof to your next success. But if you neglect to create a good customer experience, your business will fail. You have to understand what they need, and what they want in order to grow. 

So, what can you do to avoid your business from failing? 

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What do you think?