Most small businesses encounter setbacks, especially in the launch phase. Obstacles such as low cash flow, operational issues, and a struggling economy can arise and be challenging to overcome.
You should actually expect these challenges if you have a small business. With preparation and the right strategies, you can dramatically increase your chances of success.
Here are 15 ways to reduce financial stress and turn your struggling small business around.
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Review your business plan
An effective business plan helps you establish the foundation of your company. It can include your mission statement, organizational structure, marketing strategy, and products or services.
If your small business is struggling, revisit your plan and assess what went wrong. Review your financial projections versus current financial data.
You should also rethink your strategy to pay off debt, market to potential clients, and offer the best customer service.
Set SMART goals
Setting goals can give you a clear direction and focus. Try setting SMART goals. These are:
- Specific: Make goals precise and detailed, not vague.
- Measurable: Establish a way to track and evaluate progress.
- Achievable: Keep them realistic.
- Relevant: Will accomplishing them actually improve your business?
- Timely: Create a strict deadline.
An example of one of these might be “Increase monthly sales revenue by 10% in Q3 by launching an online marketing campaign.”
A lack of organization can be disastrous for a small business. It can result in missed deadlines, poor customer service, and financial losses. When you’re organized, you'll likely be less stressed and may even save time and money.
You should look for ways to streamline operations. Implement systems for processing orders, filing paperwork, and managing customer relations. Schedule regular clean-ups of physical and digital spaces.
Resolve $10,000 or more of your debt
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Redefine your pricing strategy
A pricing strategy ensures you’re charging an appropriate price for your products and services. It helps you balance generating profits while maintaining a competitive edge to attract customers.
Perform a cost analysis by calculating all direct and indirect costs of running your business. Research your competitors' prices, consider the value of your offerings, and then choose a price model that aligns with your business and customer needs.
Manage your cash flow
Cash flow refers to the circulation of money in and out of your business. In short, you need to receive more money than you spend on day-to-day operating expenses.
A cash-flow forecast can predict your future revenue and expenses. With this outlook, you can identify opportunities to increase cash inflow and reduce expenditures.
Sending timely invoices and calling customers with outstanding balances can also help you manage cash flow.
Reduce and prioritize expenses
If your small business is struggling, you should minimize your expenses as much as possible.
Try decreasing utility usage to bring down your monthly bills. Downsizing to a smaller, more cost-effective location can also drastically reduce expenditures.
You might also try negotiating better prices with suppliers or consolidating orders for a bulk discount.
If you still can’t make ends meet, prioritize paying your most essential expenses.
Stay informed about industry changes
Once you get your business up and running, staying informed about changes in your industry is crucial.
You should regularly monitor your competition to gain market insights, stay ahead of trends, and fine-tune your pricing strategy. New technology may also help your business run more efficiently and improve customer experience.
Staying informed will help you make good decisions to support your business's sustainability and growth.
Ask for help
Acknowledging that your small business is failing and reaching out for help is nothing to be ashamed of. In fact, it may make the difference between success and failure.
An experienced business coach, mentor, or advisor can offer valuable insight and solutions to your most challenging problems.
If you’re struggling financially, government resources are available that provide free professional advice to small businesses.
Conduct a SWOT analysis
Performing a SWOT analysis on your business may help you recognize its strengths, weaknesses, opportunities, and threats. It's also helpful in gathering information to assist your business strategy and goals.
This knowledge can identify the aspects of your business that are working well and the areas that need improvement. It can also help you plan for new prospects and mitigate potential risks.
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Improve customer experience
Exceptional customer service will distinguish you from the competition, resulting in fewer complaints and refunds.
Customers who have an excellent experience with your business are likelier to become repeat customers and stay loyal to your brand. It also creates word-of-mouth marketing and positive referrals when those customers recommend you to their friends and family.
Automate repetitive tasks
If you find yourself repeatedly doing a particular task, consider automating it. Automation can save time, increase efficiency, and cut costs.
Many tools and software are available to automate various aspects of your business, such as marketing, finance, and customer service.
You should choose automation tools that align with your business's needs and integrate with your existing systems.
Increase or improve marketing
Marketing is vital for small businesses. It can generate brand awareness and interest in your product or service.
Digital marketing is an excellent, low-cost option. Creating helpful content for readers of your blog and social media platforms can establish you as an industry expert and attract new customers.
You can also explore email marketing with targeted prospects or display ads on websites, apps, and social media.
Understand your target market
Understanding your target market allows you to allocate resources to the most promising prospects and craft relevant messages that resonate with them. You can also tailor your product and services to their needs.
To identify your target market, analyze your existing clientele and look for commonalities. You should also create a profile for your ideal customer. Include their demographics, shopping habits, goals, pain points, and motivations.
Explore new markets
Targeting a potentially untapped market or niche may be worth consideration, but it requires careful planning and execution.
If you are successful, you can enjoy more customers, less competition, and higher profit margins.
This strategy can effectively turn around a small business, but it's crucial to conduct extensive research before allocating resources toward a new market.
In a constantly changing world, you need to stay adaptable if you want your business to succeed.
Customer preferences, technology, employee relations, and much more will likely evolve over the lifespan of your business. You may also face financial distress in a challenging economy.
Embracing new ideas and innovations may make your business resilient against disruptions and help you get ahead financially.
When you start a small business, you're likely to encounter problems along the way. Keeping a positive mindset is the most important thing you can do.
Try to view obstacles as opportunities to learn and grow rather than hindrances that might derail your progress.
Your dream of a successful small business is still within your grasp if you put in the work, stay adaptable, and persist. Your hard work may turn your business around and grow your wealth.
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