All credit to Rita Gunther McGrath on this blog. She’s the author of – The end of competitive advantage. She says that: ‘organisations need to forge a new path to winning: capturing opportunities fast, exploiting them decisively, and moving on even before they are exhausted. With this book she explains a new set of practices based on the notion of transient competitive advantage. She shows how some of the world’s most successful companies use this method to compete and win today.’
Here are five steps, I have drawn from her, if your business is unprofitable:
1. Assign the responsibility to a person. That could be you if you are a small or micro business or another director. It has to be someone with authority. Their role is to monitor and look at the facts.
2. Stop defending a declining business. If the facts and the signs are there, then stop defending the undefendable. Remember Kodak.
3. Use a system to exit. Take control of decline rather than allow it take control of the business. Exit systematically, it reduces loss, is less painful and is a sign of strong leadership.
4. Focus on early warning signs – poor innovation, customers purchasing cheaper products, declining growth rates, competitive advantage completely eroded.
5. Redeploy resources – Easier said than done, but if done systematically you can do this in a more controlled manner, rather than losing valuable knowledge in an uncontrolled manner.
If your business is suffering and you need some good business advice, call RBSS Consulting. There’s no need help thinking it through alone. Let us help you find the solutions. Contact us today on 0333 355 1696.
Many businesses reach a point of sustainability with regular income and want to take the next step for growth, but safely. Businesses in debt can often make bad choices because they don’t think they have any other options. At RBSS, our business consultants often get asked the question ‘how do I grow my business without debt?’ We help clients with this situation regularly enjoy creating strategies to help businesses thrive. Although debt can provide businesses with the capital they need to grow, it can sometimes be a risky option and it’s not for everyone. So how do you grow your business without incurring debt?
All business plans, when created with budgets and forecasts, should have at least thought about the idea of expansion. Ideally at the end of each business year there are profits that can be reinvested into the company or put aside for when the need arises. If you are not in that position, there has to be other options.
There are ways to make the most of what you have and grow your business without getting into debt. Let’s explore the options:
Grow with your business
As mentioned earlier, you can choose to grow with your business; where you invest your previous profits to grow your business. You grow as fast as your sales do. This might be a slow process though and you might hit a point where you need to expand to survive and don’t have the money. That leaves you with a difficult decision to make. Having a business mentor can help considerably to help develop your ideas.
Equity funding, or angel investors, means that you get investors for your company who provide you with a lump sum of money. However, this option means that you are giving someone else shares in your business and that you won’t have full control. This is not for everyone.
Factoring, also known as accounts receivable financing, is where a business sells its invoices, or receivables, to a third-party financial company known as a ‘factor.’ The factor then collects payment on those invoices from the business’s customers.
The main reason that companies choose to factor is that they want to receive cash quickly on their receivables, rather than waiting the 30 to 60 days it often takes a customer to pay. Factoring allows companies to quickly build up their cash flow. This is a great way to get money faster than you normally would have done, allowing you to keep the business moving.
Other options include government backed schemes. If you are eligible you might be able to get financial support from one of these schemes.
For a consultation with one of the business advisers at RBSS, to see how we can help you grow your business, call 0333 355 1696 or email email@example.com
There are many reasons for business failure. From poor management and not following the business plan, to bad market research, to poor marketing strategies - the list goes on. From the outside, it can be easy to spot what someone isn’t doing right, but when you’re on the inside it’s not so easy to see the mistakes being made, even when you’re the one making them. Below we look at three common business mistake to avoid that could save your business from going under.
1. Bad financial management
All too often, businesses find themselves running out of money. Cash flow is key for all businesses. How this happens usually falls into one of these categories:
2. Bad customer service
It’s surprising how many businesses have bad customer service. Remember that without any customers, you wouldn’t have any business. Giving good customer services doesn’t have to be hard or expensive. Listen to your customers if they complain and put it right quickly. Ensure that it doesn’t happen again. Word of mouth can spread all too quickly and it can have devastating effects on a business.
3. Not joining the digital revolution
It’s hard to think of anyone not being active in digital these days as it is prevalent. As a business consultant, I see all too many businesses still avoiding digital. Society spends more time than ever on their screens, be it a phone, tablet or laptop. There is no getting away from it, the digital age is here and one of the biggest mistakes that you can make is to ignore it. Now more than ever you must have an efficient website, that it is mobile and SEO friendly. You need to be active on social media and posting regularly. If this is not part of your expertise, don’t hesitate to seek advice from a professional.
Running a business is a continuous learning curve. We all make mistakes. But acting quickly and making necessary changes can determine the future of your business. Having someone to get business advice from and bounce ideas off, like a business adviser, can be incredibly helpful.
At RBSS Consulting we help start-up, small and larger businesses through their development stages. If you need external business advice give us a call today on 0333 355 1696.
Business downturns don’t just happen in recessions, they can happen anytime the market changes. Perhaps a new product has come on the market that makes yours less attractive, or the service you offered has been streamlined by a competitor and you cannot do the same. You are now in a position where the business is making less money and the profit margin is dwindling. Does this sound like your business?
Figuring out how to recover from a downturn in business can be hard. Sometimes you just can’t think what to do first. There is no simple answer, but it is important to act fast. The actions you take when your business is having a downturn are critical, it will define whether your business recovers and thrives in the future or whether your heading towards the end.
If you run a small business it can be harder to recover from a downturn, than for larger firms. Recovery might be slow. The first thing to do is to take a step back and evaluate your business. Are you on track with your business plan? What is different? Why are you in this downturn? Can you identify what has caused it? Does your product or service need refining? Try to this this from an outsider’s point of view, leave your emotional investment out of it. What is working and what is not? From here you can make plans to change what isn’t working and capitalise on what is.
Evaluate your staff. Do you have a good team? Are they confident on all aspects of the business? Are they enthusiastic about working for you? Any unhappy members of staff can bring your company down fast. Have you shown your appreciation for what they do for your business. If you haven’t done this for a while, maybe its time to take them out for lunch or a drink? Foster bonding. Do you run annual strategy days. Take a day out of the business to go away and brainstorm how the business is running and what could be done better. Your staff may see things that you don’t. Remember good management is just as important as the product or service that your business offers. Make sure your staff are productive, motivated and rewarded (Thank-yous cost nothing!).
Also, consider your costs. Are you staying within budget? What expenses can be cut? Could you get better deals from your suppliers? Are unpaid invoices making your cash flow tight? Perhaps you have extra office space you could think about renting out. When you need more staff, perhaps you could take on an apprentices or an intern. They usually cost less and are enthusiastic to learn.
Beyond that, funding is another option. Before you do this, make sure you are confident that you know why your business is not doing as well as it should and that there is a positive upturn on the horizon. Throwing money at the problem might not be a solution and it could cost you more in the long run.
Small businesses are highly volatile. Even with passion and hard work there is a chance that things won’t always go your way, so seek advice from a business consultant who has the benefit of extensive experience and an external vantage point.
The business advisors at RBSS Consulting can be reached on 0333 355 1696 or by email on firstname.lastname@example.org.