It's said that you go bankrupt very slowly then very fast. I hope you never find yourself in this position, but the reality is that most businesses will experience difficult times, especially in the early years. The Bureau of Labor Statistics found that from 1995-2015 more than 50 percent of businesses failed during their first five years. The statistic is even more dismal for tech start-ups.
There are many factors that can contribute or lead to a failed business such as cash flow problems, low market demand for a product or service, or poor leadership. The key is to recognize as early as possible that a downward trend may not be a temporary problem and quick, corrective action may be needed. How good are you at sensing the early signs of your business plateauing?
Here are four tips that can help you and your company return from the brink of bankruptcy:
1. Talk to your customers -- all the time.
The entire reason a company exists is to deliver a product or service to a customer. Yet one of the most common mistakes leaders make is not spending enough time with their customers. Customers can help companies uncover service issues and surface opportunities and threats as a result of shifts in the marketplace.
Ask them questions like:
- What are you looking for that you are not finding?
- Would you recommend us to a friend without any hesitation? If not, what's causing your hesitation?
Learn all that you can from your customers, and then decide on the fewest, most important areas you can focus on to make immediate improvements and better meet your customers' needs.
2. See possibility.
There are two types of leaders, those who choose to see problems, roadblocks, and disasters around every corner, and those who see possibility no matter what.
Develop your instinct for possibility when faced with unexpected issues by asking yourself questions such as:
- What has opened up here and what has become possible?
- What opportunities does this create?
- What could we do with this?
- How could we leverage this?
Embracing the mindset of infinite possibility, and encouraging others to do the same, will boost your ability to respond for the better.
3. Make your business (or website) a destination.
If your business has a physical location, make it a destination. Starbucks, Bass Pro Shop, and REI have created environments that draw us in and appeal to a range of our senses in purchasing coffee, a fishing lure, or a tent.
Do the same. Train your employees on how to provide the best customer experience and make sure they know the critical role they play in the company.
If you are an online business, use the feedback from your customers to make sure you are delivering the best user experience possible. Are customers able to easily search your site to find what they need? Is the checkout process seamless? Do you have customer service representatives who are easily accessible and always available to assist people with problems or to answer questions?
If you are a service provider, does your website clearly articulate what it is that you do and why someone needs to hire you? Do you clearly demonstrate the value and experience that you offer to your customers? Do you have formal processes in place to follow up with any email or phone inquiries?
4. Test on a limited basis.
For most of us, the days of perfecting every detail before taking a product or service to market is gone. Demand and changes in the market happen too quickly. If you decide to introduce a new product or service, develop a pared down version, get user feedback, do user testing, and discover if people are willing to use the product or service.
If you've done your due diligence and spent time talking to customers in advance, the customer testing phase will probably be relatively quick and painless and require only minor tweaks when you decide to fully release your new product or service.
How sure are you that you are not on that slow path to a fast bankruptcy? If you are even remotely concerned, just want to hedge your bet, or are trying to get off the "going broke" path, resist the urge to look within.
The answers are always in the marketplace. Make spending time with customers and prospects your number one priority, and build what they want.