Most people don’t realize just how difficult it can be to manage a failing business. It’s not just about managing a sales and marketing strategy, you have to take care of personnel issues, management, financial aspects, and much more to keep the ship afloat. Here are some tips for those who want to save their small or medium business from sinking into debt.
1. Look at the company’s overall situation — is it worth saving?
The first step towards saving a failing company is to determine if it can be saved at all. Sometimes, the best solution may appear to be shutting the doors and letting everyone go. This means that you need to look at whether or not it’s possible for your business to generate enough income to meet its operational costs. For example, if your business has both product-based and service-based operations, it’s possible that you can keep one of them operating while letting go of the other. If all your sales are product-based only, then shutting down may be a better option. You may also look at your personal finances that got caught while trying to save your business. If you have other debt outside of the business and you’ve already filed for Chapter 13 bankruptcy, you may have to close your shop and start anew.
2. Determine your budget — what will it cost to restructure?
After determining whether or not there is a future for your company, you can then look into how much it will cost to restructure. If there’s a chance that the business can be saved, you need to take inventory of what needs to be done and how much it will cost before you ask for help from an outside agency. For example, if most of your sales and marketing efforts were product-based, you may need to shift the focus more on developing a stronger service strategy. This will require you to hire an agency for this purpose and it’s reasonable to expect that such services will cost at least $5,000, if not higher. The same goes with offering customer support. If your sales are dwindling but your product is still new and you haven’t yet begun any marketing efforts, try hiring a service-based company to assist with customer support and operations. This is usually at least $50 per hour so it will cost you around $10,000 for this purpose.
3. Look into possible funding options and courses of action.
Local and federal agencies usually have programs for SMBs that are struggling to meet their financial obligations. You may also consider applying for a business loan from a local bank or credit union. In addition, you may want to look into consultancy services from human resources companies because they can provide advice on restructuring your company without costing too much.
4. Take professional advice — use experts in your industry to help.
Since you’re trying to save your failing business, you need the guidance of experienced professionals who’ve been there before. Appointing an SMB consultant is one good way for this task because they are specifically trained to work with small businesses to restructure their operations. The problem with SMBs is that owners don’t always know what needs to be done so they may need the guidance of an expert who knows how to run a business.
5. Do you need to file for bankruptcy? If yes, then do it now.
Sometimes, fresh starts mean filing for Chapter 7 bankruptcy and wiping the slate clean so you can start again. Other times, Chapter 13 bankruptcy offers a way to reorganize your assets and liabilities in order to meet your financial obligations and save the company from going under.
6. If the business cannot be saved, then start over — but take care of your employees.
Though closing a business may sound heartless to an owner, it’s important to remember that employees still need to eat and pay for their personal expenses, not to mention pay their bills. It is a much better option for everyone involved if you can close down your business and allow your employees to find another job. The closure of the company also means that you can take care of all outstanding bills so be sure to settle any debts before closing down.
Failing businesses have a few options when it comes to saving themselves. They can try to restructure their company, look into funding options, and take professional advice in order to turn things around. If this doesn’t work, then they may need to file for bankruptcy and start over again. It’s important to remember that employees still need to be taken care of during this difficult time.