How to Turn a Struggling Business Around
By Pavlo Phitidis
Turning a struggling business around isn’t easy, but it’s not impossible. Currently, many businesses are implementing turn-around strategies to revive ailing operations, or increase their attractiveness to customers. If you’re facing a dead-end in your growing business, on The Money Show with Bruce Whitfield, we considered ways you can turn your business around:
In the news
Edgars clothing retailers financial struggles have been dominating the business headlines for a while, but the company’s undertaken two interesting initiatives that may just pay off. Partnering with Famous Brands, Edcon has opened several small cafés within some of its stores. Edcon have also partnered with an experienced technology company – Blue Label Telecoms – to launch Edgars Connect: stand-alone specialty technology stores that offer a wide range of cell phones, drones, and other gadgets.
A turn-around strategy for your business
Getting your business back to profitability can’t happen overnight, but it is possible to do when you follow a robust plan. It happens to all businesses. Arguably, the best sports wear apparel company in the world currently, Under Armour, itself is having to undergo a turnaround. in fact, the better the brand, the more established the business, the more likely a turnaround is needed to reposition in a changing business environment.
Whether your company is struggling or not, however, you should undertake an annual review of your operations, to see where your operations can be improved, or new avenues for income generation uncovered. I’ve been working with a clothing manufacturer recently, and recommended this five-step plan:
1. Look inside your business
Start within your company and make a concerted effort to weed out any internal wrongdoings. The moment you remove anything that’s not supposed to be there, you’re ensuring that your internal systems are running effectively and efficiently, putting your business immediately ahead. With my client, our first step was to walk through the factory floor, and talk to his staff. Alarmingly, we discovered that the factory teams had never met any member of the senior management team before. As my client was looking to turn his newly purchased business around, this was key focus area for him, going forward: your team is a vital component of your company – talk to them. Just by talking to the factory floor staff, we learnt so much, and some great ideas for changing things up were shared.
2. Look outside your business
Next, we headed out and visited this manufacturer’s customers. Customers really do hold the key to your business, and simply by listening, you’ll learn the most remarkable things about how your business is perceived and supported. Notably, when we implemented this step for my client, we also learnt that no member of the senior management team had ever visited their customers. Obtaining an objective perspective on your business is critical, no matter what.
3. Look around your business
Your suppliers are another key component, who can also give you remarkable insight into your business. Interestingly, we discovered that there are two types of suppliers for my client – the more attentive, smaller, supplier who was eager to grow their relationship with us, and the more aloof, larger, supplier, who was quite comfortable in their relationship with us. As a result, when we reconfigured this clothing manufacturer’s business, we sought out dynamic suppliers who could offer us multi-purpose technologies that streamlined the business’ operations.
4. Go back into your business
Once we’d learnt everything we could from suppliers and customers, we went back to the staff, to share with them our proposed turn-around strategy. It was vital that the employees of the business could see how their ideas had been considered and adopted. After all, its they who ultimately implement the strategy. But the toughest step of all will always be: finding the money.
5. Visit the bank after visiting a funder
To implement a turn-around strategy, you need capital, and to get a capital investment, you’ll need a funder, or help from your bank. When you talk to your bank about implementing a turn-around strategy for your business, make sure you first have a funder – preferably, someone with an entrepreneurial leaning. That way, if your bank isn’t able, or willing, to provide the capital you need to turn your business around, you’ll still have an independent funding source to get started, and your bank may view your strategy a little more confidently.
Let Aurik help you create and implement a turn-around strategy to get your business back on track. We’ll help you build your business into an asset of value.