According to RSA, the commercial insurance company, 71 percent of the UK’s small and mid-sized businesses expect their revenues to either fall or be flat in 2017. The health of any business is not guaranteed forever. At some point, virtually every small and mid-sized business hits troubled waters so this could be a difficult 12 months if you own a small business.
It’s not easy spotting the early signs of trouble. Turning around the fortunes of a distressed business is a formidable task, but if you are concerned, you need to jump on it right away. Treat it like a crisis because without that kind of mindset it’s hard to bring yourself to take significant action straightaway But the good news is that if you act swiftly and decisively, it is possible to recover and bounce back stronger than before.
You need to start 2017 by taking a cold, hard look at your business. Get some outside help because it’s always useful to have an outsider’s perspective. An experienced business consultant can help you to see what needs to be done, make the tough decisions and execute a plan.
Here are the 7 areas that you should be looking at and the questions that you should be asking in order to secure the viability of your business in the year ahead.
1. Strategy. Re-evaluate whether your business is still relevant and focused. What makes your business stand out from your competition? Revisit your marketing strategy because the majority of business ideas fail, not because of a bad idea, but because of bad marketing. Make sure you know how your customers are reacting to your messages.
2. People. Do you have the right people running and operating your business? If not, get rid of the ones who are not performing. To survive, you need “the right people on the bus”. Are the employees who are the right ones properly recompensed and incentivised?
3. Products and services. Are you sure that your clients are satisfied with your offerings?
4. Customers. Is your business focussed on profitable customers? Or are you focusing too much on unprofitable or difficult customers? Where are your customers right now in terms of their mind and mood? For example, are they upbeat or pessimistic, are they cutting back and how are they spending their money right now?
5. Innovation. Are you always improving? For example, are you being creative or using technology to create better products, reduce costs and improve competitive advantages?
6. Performance. Is the business goal orientated? Are your processes and procedures efficient and systemised?
7. Finances. Is your cash flow in a healthy position? Do you have too much debt? Are your gross margins and pricing optimised? Is your sales team effective?