When things are not going well in your business, it can be easy to make it worse. As problems mount, despair can set in, and some managers find themselves locked in a cycle where they keep doing what's not working.
It doesn't have to be that way. You can rescue a failing business, but you have to be proactive, make tough choices, and sometimes take actions that you might not want to take.
Instead of accepting the inevitable or riding a failing concept until it dies, take a big step back. Examine your business and decide how to pivot and get help if you need it.
Hiding from your problems won't help you save your business. Image source: Getty Images.
Be willing to change
Many years ago, when I ran a decidedly failing group of rock-band summer camps, we knew what our problems were, but did little to solve them. When the camps had launched, the economy was strong, and the concept was novel. A few years later, when I came on board, the recession was underway, consumers had less discretionary income, and we had a number of competitors.
In retrospect, our mistake was sticking to a high-end model that most markets would not support. In New York and Boston, our system of using (and paying for) professional musicians to teach at our camps worked. Nearly everywhere else, it forced us to price our camps at more than twice what our competitors charged.
We had a better product, but that did not matter. Many potential customers could not justify paying what we were charging.
Had we listened to what the market was telling us, we would have modified our model. Maybe we would have lowered employee costs by using college kids, and then we could have charged less. Instead, even though we knew the ship was sinking, we stuck with what used to work.
Get help
For many people, if their business model worked for a long time, it becomes hard to make changes. That's not a personal failing, it's just human nature.
One of your first moves as business starts to dip is get an outside perspective. Talk with customers, others who have succeeded in the field, and people who are just smart.
It's important to not just hear outside perspectives, but to listen. If customers are telling you they love your business but prices are too high, you have to figure out how to lower prices and/or increase value. And if an outside expert shows you how your methods have become dated or how your business has fallen behind its rivals, you have to make changes.
Reboot
If you have watched any of the reality shows based on saving failing businesses, you might have noticed that in many cases, standards slowly fall over time. When that happens, the business declines and the owner becomes mostly numb to the situation.
Fixing it requires a return to high standards. It often requires a new look, a revised concept, and maybe even a new business name.
If your business is failing, figure out what changes to make, and then do a hard reboot. Hold a new "grand opening" and reintroduce your company to the market.
Take action
When you run a failing business, the worst approach is to do nothing; it's very unlikely that problems will correct themselves. Be thoughtful, but be wiling to make hard choices. You might have to fire employees or walk away from parts of your business that were once very successful.
It's better to cut off a toe if it means saving the foot. Get the information you need, then make the choices needed to save your company.
