Businesses go through rough patches. It happens to them all from time to time. What happens if the patch isn’t ending though? Then you might be in trouble. The rough patch might not be your fault in all cases, but it’s always your responsibility to see the business through. That is the burden of being a business owner.
So how do you weather the storm?
Nobody likes to fire employees, especially ones that have been loyal and hard working for many years. At some point, it is either the staff or the business. Some people lose their jobs, or all people lose their jobs. The needs of the many outweighing the needs of the few.
While it is advised you try and cut underperforming or problem employees first, you may not be able to save good people from the cull. If the cuts have to run deep, sacrifices have to be made.
Bare in mind, these kinds of cutbacks are short term. If the problem continues, you can’t just keep cutting to stay barely ahead of the failure. At some point, you’ll be cutting so hard you strip yourself of revenue due to decreased production.
Sometimes you just need a little bit of money to get you through a downturn. One of the ways to get through rough spots is to sell off assets. If you or the businesses are asset rich, liquidizing these assets could provide you the monetary boost you need.
If you aren’t asset rich, you need to look elsewhere. It could be you have to speak to investors about getting funding. Getting investors on board means giving away some stock in the business however. If you lose a controlling portion, you could be ousted from the business.
Sometimes the rough periods last a while, and as such your business may become damaged in terms of its credit. Raising capital in this situation will be difficult, as most lenders will be worried about their ability to reclaim on any loan.
However, you may be able to obtain a bad credit business loan in certain situations from certain companies. It all depends on your situation.
It could be your business plan just isn’t working. It happens with most businesses once or twice. You can’t get everything right all of the time. If there is definitive evidence that a business plan is not working, it is time to change.
Turning around completely may not work, plus it can take far too long to be effective. A good way to rework a bad business plan is to take out the parts that aren’t working and keep the parts that are. That takes some serious analysis, but ultimately you have to listen to what consumers have to say.
If things are in such a dire state though, do not be afraid to pull the plug. When you can see that you’re digging a hole you can’t get out of, you need to say enough is enough. There’s no shame in doing it; it’s what responsible business leaders do.