It's lonely at the top

Photo: Contributed

Will your business fail because you can’t …

……..or won’t ask for help?

Many business owners feel trapped and alone.

• But who can they ask for help?
• Can they ask competitors for help? Of course not!
• Employees don’t know the strains of being an owner and they need their pay cheque.  They can’t help.
• A mentor from another industry is better than nothing but what does a baker know about auto body?

But not asking for help when needed shoves the business onto a death spiral leading to even deeper depths of despair. 70% of business failure stems from business people not recognizing, or ignoring that they need help.  Why???

Since the recession of 2008 many business owners have been hit with unexpected challenges. In this business environment they are getting in over their heads with debt or struggle against new competition that is eroding their sales and profits.

So many business owners need a business turnaround strategy but have no idea how to begin.

A great business turnaround strategy begins with a reality check.

• Where is the business today?
• And what is the company’s ability to act?

The grass may look greener on the other side, but it’s really hard to grow when the business is dead and buried six feet under.

Your attention and all your efforts must be put on revenues, expenses, operations and cash flow.

This is done by homing in on the following key areas:

1. Management Metrics:  Too often business owners are besieged with mountains of meaningless data that confuse management and stop them from making the correct business building decision.  It is possible to identify and develop 5 or 6 measures of performance for a company that will quickly and easily put management in day to day control of the company cash flow.
2. Pricing Strategy:   A great pricing strategy is the most powerful but most undervalued weapon in the armoury of any business. The development of an effective pricing strategy with the goals of improving profit and retaining customers will immeasurably help the business.
3. Restructure the Company:  Debt and its management is the core of a financial restructuring process. An owner needs to layout and implement a strategy to reduce debt to manageable levels. This process can take a few weeks to develop and several months to see through to a successful conclusion.
4. Build Assets:  By putting the company on a pre-determined course to build assets, everything changes. The banks and suppliers look at you quite differently. The company has value and the owner stands a better chance of getting top dollar for his cherished business. You need to work with someone who can examine the company’s capacity to generate such assets and develop a course of action.
5. Pre-Determined Profitability:  You need to develop and implement a plan to maximise profits. This process begins with benchmarking the company’s performance and planning to exceed them. In essence, you need to mimic the methodology of Wal-Mart and other big box stores that have used a formula for decades to achieve pre-determined profits. Virtually every type of company in every type of industry can use this approach.
6. Exit strategy: Too often in business, money is left on the table by the owner at the time of the sale of the business. This is typically because the company is not optimised for sale and there was no predetermined strategy to target a particular buyer. During the life of a company it should be built to maximise value with a constructed plan for its ultimate sale.

Establishing a Business Turnaround Strategy is the best way to continue to build your business quickly, and prepare for the ups and downs of being in business.

The owners of successful businesses all share one similar characteristic; they control and understand the key areas needed to build a solid business foundation.

They do this by establishing and working an integrated business strategy. This defines for the business owner and everyone in the organization how business will be done.

It keeps you focused on the job – to Build Your Business.

Article written By Andrew Gregson and By Donald Robichaud

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.