Companies don’t always survive. While many are champions today, others may fail in the long run. Mainly because life isn’t just for victories but there could have downfalls too. Failed business happens due to several factors such as poor management, incompetent employees, bad decisions, costs that are greater than income, and more.
When you find your company on the verge of sinking, a lot of decisions would start playing in your mind and you get torn between selling your stocks and file for bankruptcy (as your last resort) or take the risk of saving what’s about to fall down. In times of dreadful situations like this, you must know how to take an action towards saving your business for this would be the best and only thing that you should be concerned about if you think the company is still worth it.
Sometimes, talking to a professional would help but no one could know and understand your company more than the way you do. So if there’s one person who can help your sinking company, it’s you. Learn to survive your business from the following steps before lawyers say it’s all over:
1. Create a long-term plan
If previous plans didn’t work out then maybe it’s about time you stick to Plan B. It’s been a planning process and not just a plan. So the second action basically aims to determine business failures and solve major problems that increase the risks of bankruptcy. The plan should be viewing a long-term format which involves business goals and strategies that will run for a longer duration.
You can hire a consultant to guide you with the execution of the plan but if you think it will only add to the costs then you can be your own free consultant by taking training sessions on business turnarounds.
2. Fix your finances
The problem-solving begins with fixing your finances. An insufficient fund is one of the most common reasons why a business may have to experience bankruptcy. This might sound like an obvious statement to you but with not enough money, your empire is most likely to fall down.
So before you decide to completely give up, take time to identify why your business is losing money and why it didn’t profit at all. Study your cash flow and try to reduce or eliminate unnecessary cost of spendings. Check all records of the company’s debts (either secured or unsecured business loans plus unpaid supplies), assets, and liabilities to identify the problem. Your cash flow and expenses should not be greater than your assets.
3. Improve management
Poor management is another factor that increases the risk of bankruptcy. Maybe you’ve lost some key employees so it’s time to hire new people with new ideas.
You can’t be the only smart person in the room so you need to hire someone who’s smarter than you. However, being smart isn’t enough, your people must know how to admit and handle mistakes at the same time as well. The bottom line is you can’t just keep a company with the wrong people.
In addition, try to set new goals and protocols that will change the way you work.
4. Renegotiate contracts
Consider renegotiation of contracts with all aspects involving your company such as working space/property, banks or creditors, suppliers, investors, and other third parties.
5. Create a positive attitude
If you are going to pull up your sinking firm, you must create a positive attitude that will drive you to correct actions that include decision making and planning, and execution. Learn from the hard times and your business will be better off one day.
By: Sarah Contreras
Sarah holds a bachelor’s degree in Communication with expertise in marketing and media management. She currently works as a full-time content contributor for a digital marketing firm. What motivates Sarah to keep writing is her passion of providing information to all readers out there.