What to do when your business is in a slump?
Your business has a life, just like you. From time to time, our body get sick; we don’t feel in the mood and sometimes just feeling more emotional than usual. It is a mistake to think of a slump as the end of your business.
I don’t really know anyone who is thinking of killing themselves when they get flu. Likewise, you shouldn’t decide to quickly to end your business if you’re experiencing a downturn. You do need to make sure that this downturn is temporary and doesn’t kill you.
Symptoms vs. Root Cause
The first thing that you need to consider when your business in a slump is to realise that what you’re experience could be a symptom of another problem. Sometimes it’s a big problem, sometimes it’s small. A declining profit might indicate a problem with your marketing rather than operation. Low website traffic might indicate poor design rather than performance issue.
Just like a doctor, you need to have a set of metrics to measure your business activities and its performance. These are your indicator of the real problem. What is your process chain? A problem in one of the chain could be caused by a problem in the previous chain.
Fix the problem, not the symptoms.
Analyse the Market
At the core of your business you should know your target market, your product and how you deliver the value to your market. Shifts in market demand can and will entirely change the core functions of your business.
As an example, in 2010 research indicates US adults consumed on average over 40% of media time with TV and just under 30% digitally (online, mobile). That figure however changed significantly In 2014, showing only less than 37% is spent on TV and over 47% now consumed digitally (click here to see source). Despite past successes with your current strategy, you should adjust to your market demand.
“I do not like to repeat successes; I like to go on to other things.” -Walt Disney
Don’t ever live by your past successes, create a better future. What works in the past may not work now. I’ve seen many businesses promote themselves as having a system that works. One begs the question “Which system”, “When”. I doubt there’s any business that survives now without changing their strategy along the way and adapt to this changing world.
“The Only Thing That Is Constant Is Change” -Heraclitus
If you’ve never heard about this before the Pareto principle or sometimes called 80/20 rule simply state that the “roughly 80% of the effects come from 20% of the causes”. To put this in business term, only 20% of your activities generate 80% of the results.
Now this doesn’t mean you don’t need to do the other 80% of the activities, but more to encourage you to focus more on the top 20% that actually gives you the biggest outcome. If your business complimented strongly by your online or technology presence, the worst thing you can do in a slump is to reduce your technology resources (staff, hardware investment, maintenance, etc).
What activities driving your sales? Focus on them.
Does your best performing staffs cost you a lot of money? Think twice before firing them.
What marketing channel giving you best returns? Boost them.
Now, these are general advice. As I mentioned at the start, businesses are like people. They are different and hence have to be treated differently. There are occasions where your business is in a slump due to factors outside your control. Regulations, natural disasters, etc. Before deciding what to do, you should first see an expert specialising in business growth. Whether that’s an accountant, a consultant or a coach, these are people that can analyse your situation and recommend the best way to move forward.
If your business has been in a slump, I would like to know what you think about it, how did you get out of it and which of the above points you feel the need to be applied the most (or if you have a new point altogether).
Use the comment box below to tell share your story. Please feel free to contact me should you have any questions.
Image courtesy of Ambro – FreeDigitalPhotos.net