Starting a business isn’t for the faint of heart. Considering that 90% of startups fail, there’s decent odds that at some point you’ll either need to make serious changes in your business so you can survive, or throw in the towel.
But is it really possible to turn around a failing startup? And what are those 10% of successful startups doing that the vast majority aren’t?
Whether or not you can turn a failing startup around often begins and ends with you. Begin by getting truly honest with yourself about whether you’re an entrepreneur or a wantrepreneur.
Entrepreneurs have grit; they take the risk and they go the extra mile, even when they’re facing failure. Wantrepreneurs, on the other hand, are simply chasing a dream. They might put in a little bit of the work and even make some money, but they’re not professionals and they give up at the first signs of failure.
Business reputations and credibility are tested and made during the hard times. If you can survive on the brink of startup failure, your reputation will be better for it in the long haul. Here are ten ways to breathe life into a failing startup.
Revisit your vision and find your ‘why’
It all begins with the vision. How do you want your business to change the lives of your customers? What got you excited about your business to begin with? Why does your business get you up in the morning?
If you don’t have a strong enough ‘why’, odds are you won’t tough it out in the hard times. Very rarely is making money a compelling enough reason for someone to dedicate their life to a business. Pinpoint what really gets you going and remember it every single day, as you’re making the calls you don’t want to make and working when you’d rather be in bed.
Throw your business plan in the garbage
Or set it on fire, whichever you prefer. If your business plan was working, your startup probably wouldn’t be facing failure. Either you weren’t following it to begin with, or your business plan set unrealistic expectations about what you could accomplish.
At any rate, business plans are overrated. Try creating a minimal outline of your key partners, growth opportunities and channels using the Business Model Canvas or the Lean Model Canvas instead.
Cut your expenses and renegotiate your contracts
After auditing expenses, most businesses find that they can cut their expenses by 10-20% by getting rid of services or tools they don’t need. If you’re having a hard time finding expenses to eliminate, try contacting vendors you work to see if you can renegotiate your contractson more favorable terms.
Reconsider your team members
I know this is a touchy subject, and a topic no one likes addressing. Before you get defensive, keep this in mind; most business failures are people related, not money related.
If you have team members who don’t align with the vision you created in step one, let them go. A functional business is made up of functioning employees and leaders. Everyone needs to be on the same page if you want a fighting chance at reviving your startup.
Refine your systems and processes
You may already have a system in place, but it probably needs revision if your startup is going down like a sinking ship. Stop ignoring the small things in your business and work with your team to find a system that works for everyone. If the left hand doesn’t know what the right hand is doing, you’re only biding your time. Project management systems are a handy tool for keeping your team on the same page. Consistent team meetings are also a productive way to brainstorm and assess systems and progress.
Revise your marketing plan
If you build it, they will not come. You may have created the best product since sliced bread, with a team of the best masterminds in the world, but if no one knows about what you’re doing, your startup is dead in the water.
Marketing is an area where many business owners and startups fail miserably. No doubt it takes a certain set of skills to become a marketing guru, and if you don’t possess that skill, it’s best to consult a professional rather than wing it.
“Businesses can often turnaround their growth issues and failing financials if they market themselves properly. It may seem counterintuitive that increasing your marketing budget would be a good idea during times of startup failure, but dedicating more to marketing can increase your bottom line big time. It all comes down to increased visibility and sales,” explained Lauren Wilkison, the CEO of CSC Interactive, a digital marketing and search engine optimization company.
Or if you never took the time to be intentional about branding to begin with, start now. If you’re not intentional with your branding, you leave the door wide open for customers to make assumptions about your business, which can be very dangerous.
Branding is about more than just your business slogan and your logo. Think about what gives you a competitive edge in your industry. What is your message? What do you bring to the table? Declare what your business stands for and make sure both your customers and your team knows what you represent.
Get off your butt and pound the pavement
It should go without saying that you need money to keep your business afloat, but so many startup business owners ignore the things that will get money in the door.
Consider the 80/20 rule; 20% of your business activities produce 80% of your revenue. Do more of the 20%. Stop worrying about ‘getting your ducks in a row’ and get your hustle on. Talk to more people, get in front of more customers, make more calls.
Stop waiting until things are ‘ready’; if you don’t pound the pavement when your business is on the brink of failure, you’ll never get to the point where you’re ‘ready.’
Focus on growth
Too many businesses are under the assumption that if they grow too fast, their business won’t be able to sustain the growth. Although growing too fast can be problematic, it’s a much better problem to have than not growing at all.
Once you nail down your power team, your vision and your marketing plan, the only thing you should be focused on is sales and growth. Stick to what you’re good at and outsource the rest; focusing on menial tasks that could be delegated to someone else is a major distraction.
Are there growth opportunities you’ve passed up in the past? If so, now would be the time to revisit them and take advantage of any growth opportunities that align with your brand. Don’t sell yourself short.
Stay positive and find a mentor
Building a business isn’t an easy task. Reviving a failing startup that you’ve poured your heart and soul into is even harder.
Find a mentor to give you advice, and help you stay positive during the tough times. Don’t ever make the mistake of thinking you’re above learning more about your industry. Mentors can be incredibly useful to bounce ideas off and redirect you when you’re headed down the wrong path.
Don’t allow yourself to burn out and take care of yourself through the process. If your life or health is failing, your startup will fail as well.
At the end of the day, reviving a failing startup or launching a successful startup comes down to flexibility and resourcefulness. Things don’t always go the way you planned and the smartest entrepreneurs understand the importance of adjusting their sails when things take an unexpected turn.
Being successful in business is about the community you serve and what you bring to the table. Standing the test of time, and proving you’re in it for the long haul is a big part of building business credibility. Launching a business is a lot like life; the most successful people are the ones who have grit, determination and unwavering faith in what they’re doing.