Troubled businesses often look doomed to either fail or get bought up by successful competitors, but turnaround strategies can help a business return to a more profitable and stable position. Implementing business turnaround strategies requires making a number of painful decisions, but you need to remain focused on the fact that the decisions represent a path to rebuilding a viable business.The following are a few frequently utilized methods of a business turnaround.
Troubled businesses often keep employees on the payroll that the business does not actually need or that no longer serve a function. Cutting down on the number of employees you must pay every two weeks can create a major cost savings. You can also consider pay cuts or reduced hours for all employees as an alternative to straight layoffs. No matter what strategy you choose, you will meet with resistance and, likely, anger from employees. Provide employees a straightforward explanation of the financial situation and that the business must cut back on staff and wages or close its doors.
Drop Deadbeat Customers
Many businesses must cope with customers that place big orders, but ignore invoices. Make it a priority to collect on any outstanding invoices from these customers to help shore up the business’s finances. Once you collect on these past due accounts, advise the customers that they need to find a new service or inventory provider. Dropping deadbeat customers lets you devote precious resources to paying customers and new customer acquisition.
Drop Non-Critical Projects
Even small businesses tend to accumulate ongoing projects that suck up employee time and capital. Conduct a review of all ongoing projects and drop any projects that are not business-critical. Dropping projects lets you devote that money and employee time to operations or critical projects.