Most businesses that are currently experiencing poor sales, low income and high operating costs can be transformed into profitable ventures, if the owners focus on their most profitable niches and apply simple cost cutting and income generating methods. With the help of a well designed accounting framework and effective re-branding, it is possible to restore the fortunes of a dying business. The following ideas can be used to revive your business and make it productive and profitable.
Improve Accounting and Record Keeping
To transform any business, it is important to have a good grip on the fundamentals with respect to accounting and financial management. With the help of a chartered accountant, you can put a suitable financial accounting framework in place and monitor all expenses and sources of revenue. This will reveal the critical areas where you can cut costs and give you a clear picture of your weekly, monthly, quarterly and annual cash flows. Thus, you will be to deliver improvements in cost-to-income ratios and gradually move the business from bankruptcy into profit.
Refocus and Re-brand the Business
Many businesses struggle because their initial projections and assumptions about consumer demand were not very accurate. They thought that their target consumers will embrace their product and sales will be rapid, but after some time their experience shows that the actual demand cannot bring in enough cash to sustain the business. If you have a similar experience, you need to re-validate your business model and focus on providing products and services that your consumers are willing to buy now.
Eliminate Unnecessary Expenses
Renegotiate with your suppliers and service providers so you can get the best deals that will reduce operating expenses. Every 6 to 12 months, you should analyse your service plans and tariffs for regular expenses like utilities, internet access, telephone, and credit cards. This will help your company to remain competitive and enjoy new offers and discounts. In addition, you can save cost by cutting off unnecessary expenses like fines for late payment on loans and high processing fees for credit cards. Ensure that your accountants use the latest technology to monitor the time for payments. Pay promptly, improve the credit rating and financial health of the company to gain access to lower interest rates on new loans.
Improve Cash Flow
The best way to ensure rapid transformation of any business is to focus on increasing sales and revenue in the short term. To do this, you must focus on the most productive product lines and drop those that are not generating much income. Look at the niches that are more likely to give you a quick increase in sales and avoid stretching out your resources on unprofitable projects. Just like Steve Jobs cut down the product lines of the company in 1996 from 350 to 10 and by 1998, the company posted a profit of over $300 million, it is possible to make your business more successful by focusing on the most profitable niches.
Monitor ROI for All Marketing Activities
During the turnaround period, you need to develop new marketing strategies that will help you to reach out to more customers and increase sales and revenue. However, you must monitor the effectiveness of all marketing campaigns with a direct response mechanism. For instance, adding response codes on your printed marketing materials, will help you to get data on the number of people from a particular location or region that are responding to your message. You can also use customized landing pages on your website in combination with analytics to track the ROI on your advertising campaign. Once you discover the most profitable segment of the market, you will be able to develop more targeted products that will bring more sales and profit.
Let Employees Take Ownership
Beginning with the company’s board, let all directors and company executives take responsibility for the transformation agenda. Make sure all employees are involved in setting and pursuing the company’s turnaround plan. Plan a retreat for all workers and let everyone see the reason why the company needs to be revived. Project a renewed vision of the company with new targets and goals and let them begin to provide new ways of achieving the new targets. Once all workers are truly motivated to transform the company, the task will be completed faster.
Applying the ideas provided here can help you to turn your struggling business around and make it an outstanding success. If you focus on your most profitable niches, reduce your cost of doing business, and you get all your employees involved, you are more likely to experience a quicker turnaround.