The economy has hit many small businesses very hard, causing thousands to close shop. Others are clinging, it seems, by the skin of their teeth. If your business is struggling, you may be faced with the difficult decision of whether to push on or to cut your losses and shut down your business. It’s truly a heartbreaking decision.
But before you throw in the towel, read this article. Here are ways that you can save a struggling business, and even turn it around.
Locate the real problem
It’s easy to blame the recession for everything, but what a recession really does is to magnify an existing weakness or problem. Mistakes that you could’ve gotten away with in better times can now serve a huge blow to your already slim profit margins. Were you spending too much on overhead? Is your product badly in need of an update?
Talk to your customers
A recession can also signal a need to reexamine your market. Your customers are feeling the pinch too and their habits, lifestyles and expectations may have changed. It’s time to get to know them once more.
Schedule even an informal FGD with old clients or potential clients. Ask them what they want and need from you, and consider if you are able to provide them that. For example you may discover that they like your product but it’s inconvenient for them to buy it. Find out what your competitors do, and survey their satisfaction rating too.
Examine your marketing strategies
Struggling companies can’t afford to scrimp on marketing. How can you sell your product or service if your customers don’t know about you? You can maximize your marketing budget by using very targeted messages (advertising in local newspapers) and social networking strategies (read our tips on how to make effective Facebook ads!) Other great strategies are partnering with discount websites, direct email, or search engine marketing. You can also read our article on promoting your business on a small budget.
<h5Finetune your product
You can add a service, or perhaps redefine a service. For example, if you run a daycare, you can offer tutorial services for kids who are struggling with Math, or (if budget-savvy moms are no longer signing up for specialized baby classes) turn your facility into an after-school program for young kids.
Explore new markets—or new market tastes
Restaurant owners are familiar with the need to update a menu, as customers grow bored with It and the migrate to the other new restaurant in town. But it’s not enough to offer a new house special. You may find out that you have a totally new demographic (for example, a growing ethnic community in your area) or an untapped market that isn’t served by other restaurants (for example, a college crowd that can’t afford your competitor’s steep prices).
Same thing goes for other types of businesses: if your old customers aren’t buying anymore, you can either find a way to lure them back or find a new market to sell it to.
Shift business models
Has the iPad and e-readers hurt your corner bookstore? Before closing shop, think of other ways to market your product. Maybe you can be a family activities corner where parents can bring their kids for reading, arts and crafts activities, and puppet shows. Or, you can add a coffee shop, repaint the interiors to make it upscale, hold poetry readings, and cater to the intelligentsia.
Photo from saamongbukid-vella.blogspot.com