When your business is failing, it's understandable to face the feeling of defeat or having the urge to give up. However, a failing business isn't a reason to quit. While about 50 percent of businesses fail within five years, you don't have to be a part of that statistic. There's still time to turn your business around. If you want to know how to turn around a failing business, there are some key steps that you need to take:
Identify the Problem and Assess the Situation
Determining what is causing your business to fail is a fundamental step in saving your business from going underwater. There are many ways you can identify the problem. For example, you can identify what went wrong. This may mean taking a look at your company from the customer's perspective, such as being a secret shopper. Once you've identified the issue, you want to ensure that your team is capable for what comes next, including future challenges or threats that could hamper business operations. It's also important to assess your current situation. Ask yourself and team members what could have been done to avoid the situation in the first place.
Evaluate clients and determine if they are clients who are loyal and revenue-generating or long-time clients who are costing you money to maintain. It's vital that you assess which clients are helping you generate profits versus those who are helping your company accumulate expenses. Identify those who are keeping your company from making a profit, and focus on keeping those who help you to make money. You can determine customer profitability to help identify profitable customers. You also want to focus on clients who consistently pay on time. These "gold" clients provide reliability to enhance your bottom line.
INVESTIGATE AND INVEST IN YOUR TEAM
Your team is the "bread and butter" of your operation. You can't operate efficiently without the right team with the right mindset. Thus, it's crucial to look into your employees and identify who you want to let go or keep. This can involve re-evaluating the performance of employees and whether or not business goals and needs are being met by team members. You want to keep the performers, the employees with the drive to change, and reconsider those who do not care to improve.
After you create a stellar workforce, you should be compassionate towards your new team. You can demonstrate compassion via promoting team members or even enlisting outside assistance for development purposes. For example, you can leverage small business coaches to help develop your team. You can also go out and find new talent in the workforce who can help your business drive sales.
Encourage Innovation and Risk-Taking
As a business owner, it's important to take calculated risks. When taken correctly, these types of risk can come with big rewards, such as substantially increased profits. To realize these rewards, it's important to encourage innovation and risk. Innovation allows you to be one step ahead of your competitors, since your team would be involved in something that others may not be aware of or don't understand the value of yet.
This was the case of social media platforms, such as Facebook and Twitter. Media outlets didn't take these innovative platforms seriously when they first came out in the early 2000s. Now, social media has blossomed into a monetized business model where audiences connect, engage and even read much of their news. Thus, it's important to stay innovative and take risks. Encourage your employees to develop new ideas, and rally the company around potential new goals. By fostering innovation and risk-taking, you can drive growth that can help turn your business around.
How the EOS Model Can Help Your Business
Beyond steps, such as identifying the situation and encouraging innovation, your company can do a 360-degree turn by applying the EOS model. Here's what you need to know:
What Is the EOS® Model?The Entrepreneurial Operating System (EOS)® is a complete business system that fuses a holistic business model with a comprehensive business tool set of simple but proven business processes. The goal of the EOS model is to synchronize and align every part of your business to generate your desired results. These parts include key components of your business, such as your vision, the issues of the company, the documented processes, the people, the traction, the meetings and the data your company holds.
How Can EOS Help Me?
With the EOS model, you can learn how to regain control of your business. The EOS model helps you prepare to overcome issues and to find the right process for your company. This can involve understanding how to effectively handle unexpected issues as they arise and creating a better workflow by streamlining the processes of your business. The EOS model can also help your business turn around by making sure all team members are in sync with the company's vision, helping you to ensure the right people are placed in appropriate positions and to add accountability to your team. Your business can also benefit from the EOS model by making calculated business decisions based on analyzed data.
When you take the right steps to turn your business around, you can go from failing to fruition. You don't have to take these steps alone, either. Consider consulting with Traction Inc.'s team of professionals to help your business realize success by providing you with support, including supplying small business coaching and consulting. Contact us today to take your business leadership to the next level with business development training.
The Entrepreneurial Operating System (EOS) was created by Gino Wickman (Author of Traction-get a grip on your business) and is a registered trademark of EOS Worldwide. Chris Hallberg of Traction Inc. is a Certified EOS Implementer(tm) that helps business owners and their leadership teams get more of what they want from their business.