No one starts their career as an entrepreneur thinking they may have to pull their business back from the brink of disaster some day. After all, they have carefully created a business plan, secured financing, and launched a successful company. The sad reality, however, is that sometimes things happen to businesses outside of the owner’s control that no one could have predicted. The economic recession that started in 2008 and didn’t officially end for at least two years is a prime example of this.
Hope for the Best and Plan for the Worst
Of course, a recession isn’t the only thing that can go wrong when running your own business. You could lose a building to fire, end up with excess inventory because you didn’t understand consumer buying habits, get sued by someone who hurt themselves on your property, and countless other scenarios. It’s at times like these you realize how little control you have.
While you may never need to deal with business failure or an emergency, it’s best to prepare for the possibility by setting up a cash reserve. This is money you set aside to deal with unexpected events that could threaten the future of your start-up business. Be sure to speak with an insurance agent about the various types of coverage you might need and invest in them appropriately.
Sometimes what seems like a failure for a start-up has nothing to do with money. For example, maybe your business didn’t have the successful launch you planned for, and customers have left far more negative reviews than positive ones. An ineffective marketing plan could mean that not nearly enough people even know your business exists. Don’t forget to have a contingency plan in place for these types of situations as well. Working with a reputation management company or hiring a more professional marketing agency are two solutions that could work for these example problems.
Don’t Be Afraid to Reach Out for Help
If you fear your business is headed for failure, the worst thing you can do is ignore the problems. Depending on the specific issue, don’t hesitate to reach out to an accountant, lawyer, small business advisor, or another professional who can help you. People in your informal network of business professionals, especially those who have been an entrepreneur longer than you have, would probably be happy to offer their advice if asked.
Take an Honest Look at What is Not Working
You started your business after doing plenty of research and felt confident in your plans. That is why it can be difficult to face reality when some of them begin to fail. You feel attached to them. Unfortunately, this feeling of sentimentality and wanting to hold onto ideas, products, or services that aren’t working for you can cause even more harm to your business. If you feel too close to the situation to be objective, consider asking a colleague to write down his or her observations of what needs to go.
You can expect to scale back your expenses and eliminate anything that costs too much money or takes too much time. Operating efficient processes on a tight budget might be the turning point your business needs to make a comeback.
Reach Out to Rickhoff & Associates Any Time
We are here to help your start-up succeed. Please contact us today to learn more about our services to small business owners.