Sometimes your business moves may turn out exactly as you planned, but in other cases, a string of bad decisions can put your organization in hot water. Ask just about any lawyer serving bankruptcy clients, and they’ll tell you a few tales of business owners who weren’t able to turn it around. Thankfully, though, there are ways to turn your business around if it’s starting to falter, and the following strategies should give you a good starting point for making a change.
What Are Turnaround Strategies And How Can They Help You?
In a nutshell, a business turnaround strategy is a process or collection of techniques that you can use to rehabilitate a struggling business. The overarching goal is to mitigate the stressors that are causing a business to fail and to restore financial health and profitability.
Now, there are multiple factors that may have caused your business to slip, so there’s no single turnaround strategy that will address every possible negative factor you’re facing. Staying aware of and implementing multiple techniques, however, should help you address some of the issues your business is facing and use short term wins to pave the road for long term success.
The Turnaround Strategies You Should Remember
If nothing else, try to keep these five turnaround strategies in mind…
Boosting Cost Efficiency
Businesses may start to struggle because they are no longer optimizing their costs. As a business, you want to get the most out of every dollar spent and should be on the lookout for opportunities to save money by altering how you do business, adjusting your allocation of resources, or improving your internal processes, products, etc. Thankfully, cost efficiency strategies are easy to implement, and include such measures as:
- Halting R&D efforts
- Freezing pay increases
- Slashing inventory
- Reducing marketing activity
- Stretching out accounts payable
- Limiting accounts receivable
Making A Push For Profit
In a similar vein, business problems can sometimes be alleviated by getting more cash coming into the organization. For this strategy to work it will take an entire team effort, and it’s up to the organization’s CEO to invigorate their entire team so that everyone is taking responsibility for profitability targets. Everyone will need to understand the business’ cash standing, and will need to take ownership for keeping costs minimal while you try to boost sales.
Refocusing On Core Activities
Is it possible that your business has strayed away from its proverbial “bread and butter” and is suffering as a result? For example, it may be worth it to examine your service and product offerings, see what is still viable, and cut away at some of the “fat” that may have accumulated. Similarly, you might try refocusing marketing on your loyal, core customer to ensure revenues.
Shuffling The Team
Sometimes parts of the team aren’t working as well as they once were, which is where a good leader will step in and make changes. Sometimes, this might be rearranging subgroups within your organization to find a better fit, or it could even require letting go of some staff and replacing them with others (where it’s applicable, of course).
Lastly, the slide in business activities could also be caused by leadership, and it will be up to the company to assess whether or not replacing the one “steering the ship” is the right move. In many cases, a fresh pair of eyes can offer a new perspective, and a new way of thinking about the business that might be beneficial.