Avoiding a Turn for the Worse: Discovering and Combating a Company Downturn

Picture of Gina Blitstein Gina Blitstein combines her insight as a fellow small business owner with her strong communication skills, exploring topics that enhance your business efforts. That first-hand knowledge, matched with an insatiable curiosity to know more about just about anything, makes her a well-rounded writer with a sincere desire to engage and inform.

Avoiding a Turn for the Worse: Discovering and Combating a Company Downturn

How is your business performing at this particular point in time? If your answer is anything other than, “fantastic,” it may be time to assess its status. The most obvious sign that something may be awry, of course, is that you’re experiencing financial difficulties. Even if the business is not obviously hemorrhaging money, however, there may be more subtle - yet equally important - signs that things could be headed downhill.

These four signs can indicate that some trouble lies ahead for your business:

1. A general sense of complacency. While it’s great to reach a point where your business is stable and sustainable, being satisfied with the status quo is a sign that you’ve become complacent. When you stop growing, you start dying.

Ideally, there will always be goals you’re stretching your business to attain. Businesses can’t remain viable for the long haul without striving to innovate; to be more effective, productive, profitable, sustainable and charitable than they were previously. It’s a smart idea to craft a company mission statement in order to publicly articulate the things your company most wants to be and achieve. Review and refresh such a statement regularly to stoke the fires of enthusiasm and company development.

2 Lack of fresh ideas and plans. Avoid getting “stuck in the mud’ with the way you operate your business. A business plan that worked well years ago may no longer be suitable for today’s marketplace. To remain competitive, you must be agile and open to new paths to success.

It’s critical to maintain a constant influx of fresh, new ideas running throughout the cogs of your business’ operations. Keep an eye on trends and new tastes, then make sure your offerings continue to address what the public wants. I recently saw an episode of one of those restaurant makeover shows where the owner couldn’t understand why he was losing customers after operating the same business for decades. The expert explained that his business model was antiquated. He needed to be willing to update his food selections to fit more modern tastes, streamline his menu, redecorate and rearrange the floorplan, try some new modes of advertising - because all these things had remained unchanged for years. In order to attract new customers, he needed to fill a niche diners of today would respond to.

3. Low morale in both yourself and your employees. Keep your finger on the pulse of your employees. Are they content, motivated, well-compensated, on board with the company mission? Do they feel valued, respected, heard and empowered? They should. If you learn that they aren’t, or don’t, take that as a sign that action must be taken - and taken sooner rather than later. The longer bad feelings remain unaddressed, the more they fester and spread among others in your workforce.

Hold personal interviews with team members, initiate an anonymous opinion survey, make yourself available to employees so that they may approach you with concerns or complaints. In short, do what it takes to find out what is bringing down morale among your staff and strive to fix or alleviate the problem.

Check your own attitude as well. Don’t be a “do as I say, not as I do,” kind of leader. Remember it’s the boss’s job to model the quality of morale she’d like to see in her employees.

4. Loss and/or lack of customers. Whether you’re losing existing customers or not picking up new ones, there’s got to be a reason(s).

Existing customers leave for specific reasons including:

  1. They’re not being adequately served/attended to
  2. They’re dissatisfied with quality
  3. They feel they’re overpaying for what they get
  4. They’ve had a bad interaction with someone

The loss of a small number of customers shouldn’t be alarming, nor should it be dismissed.

Monitor customer retention trends with questionnaires, surveys, followup correspondence, etc, to try to pinpoint the reasons that cause them to no longer do business with you. If you discover a trend, address it and alleviate it.

If the problem is not enough new customers, the reasons could include:

  1. Your business doesn’t demonstrate value to them
  2. They don’t see themselves as your target audience
  3. They’re not aware of you
  4. You’re not convenient for them to do business with

These issues can be addressed with some savvy marketing. Identify your “ideal” customer, demonstrate how you can help them, and market where they consume advertising. Small tweaks to your marketing can help keep a continuous flow of customers coming through your doors.

The key to managing a business that continues to thrive as opposed to one who experiences a potentially debilitating downturn is diligence. In addition to carefully monitoring and managing your incoming and outgoing dollars, keep a keen eye on more subtle trends like these that have the potential to sneak up on you and do significant damage to your profitability. Some small course adjustments along the way can help you keep on an even keel.

Are you monitoring your company for signs that could cause a potential downturn?

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