How to Resurrect Your Business and Make a Profit This Year
In the life of every business comes some trials. For example, perhaps changes to the market created challenges you weren’t ready to face. Or, maybe rapid growth created a cash flow problem. Whatever the issues, resurrecting your business and getting back to a profitable position should be at the top of your to-do list.
Salesforce surveyed over 2,300 small business owners and found 72% of entrepreneurs feel optimistic about the future of their companies. The survey also showed most small and medium business (SMB) owners are more careful about communications and trying to be flexible for their regulars.
You might wonder, how do I revive a dying business? Fortunately, many before you overcame similar obstacles. Although each company has unique needs, some tried and true methods help just about any business become more profitable.
1. Conduct an Audit
You can’t fix a problem if you don’t know it exists. Analyze all the different processes in your business. What’s working and what isn’t? If you have a hard time looking at your failures without emotion, ask a friend or mentor to give you feedback.
Look at every place you make money and spend money. What could you improve in these areas? Keep in mind non-revenue factors may impact your success as well. For example, how well trained are your employees?
2. Map Your Business
Business mapping helps on several fronts. First, you can see what areas are underserved and send sales reps to those places. Second, understand what markets competitors already have a stronghold on and how you might get your foot in the door. Third, divide up sales territories and conquer. Finally, you can reduce driving and delivery time by mapping distribution centers.
3. Ramp Up Hiring and Training
Many businesses struggle right now to find talented applicants. You may not be able to compete with the wages and benefits of top corporations. However, you can offer perks they don’t.
Start with your company culture. Do you treat workers the way you’d like to be treated? Are you engaged, responsive and understanding? You could also offer flexible work arrangements. For example, two parents might split a job and each work part-time so they have more time at home with their new babies.
Look for other perks the big guys don’t offer, such as free lunch on Fridays, bring your dog to work days and fun events.
At the same time, ramp up training and show your employees you’re willing to invest in them. Send them to conferences, have in-house training and pay for them to take a course and learn new skills. If you aren’t yet turning a profit, add in these elements once you are.
4. Improve Cash Flow
One of the top reasons businesses fail is cash flow problems. Spurts of growth and lack of money coming in are the perfect combination for disaster, especially in enterprises relying on product inventory to keep money moving.
Although the pandemic created shutdowns and slowed foot traffic for many SMBs, a recent survey shows 67% of owners believe their businesses will return to pre-pandemic levels and revenue this year.
In the meantime, you can change some of your policies. For instance, require upfront payment from clients or improve your invoicing system. Ask for 30 or 60 days net on purchase orders. Look for ways to keep funds in your account rather than moving out.
If you’re struggling to recover from the past year, look into a Paycheck Protection Program (PPP) loan to keep things running. However, make sure you use the PPP money as intended, or you may have to pay it back sooner rather than later.
5. Seek New Marketing Methods
If your business is stagnant, why would you keep trying the same things that aren’t working? Instead, look for new marketing methods. Think about who your target audience is and where they’re most likely to hang out.
Social media is an inexpensive way to get the word out about your business without spending a lot of money. The Pew Research Center shows about 81% of Americans are on Facebook, and around 69% are on YouTube. At a minimum, you should post content and information on one of those two platforms.
Look for ways to get the word out locally. Develop a street team of your top customers and ask them to help spread the word. Look for unique ways to reach your users and bring in new business.
6. Cut Costs
If you aren’t turning a profit, the main reason could be all the money flowing out of your business. Look for ways to cut costs both big and small. Can you hire a different trash collection company and save a few hundred dollars a year? How much would you save by making small changes, such as turning off all the lights when not in use?
Look for ways to save money with any third-party vendors you use. For example, if you have water delivered, will they cut you a break on fees? Also, watch out for those subscriptions you don’t use but continue automatic billing each month.
Pay attention to every little detail to ensure you aren’t spending money where you shouldn’t. If one form of marketing doesn’t work, ditch it and try something less expensive or different. For example, are radio ads performing for you when you’re struggling for cash flow? Could you cut the traditional advertising budget in half and spend on Google ads instead? What might the results look like?
The Other’s Gold
There’s an old Girl Scout song that talks about new and old friends and one being silver and the other gold. When it comes to building your business, don’t neglect your current customers. It’s far less expensive to keep those who already buy from you than to develop new relationships.
Thriving businesses cater to their regular customers and gain newbies through word-of-mouth marketing. The happier your current clients are, the more likely they’ll become your biggest cheerleaders and do what’s needed to ensure your ongoing success.