Ep 28 – Q & A – Any Advice on How to Save My Business from Failing?

Episode 28 – The Local Small Business Coach Podcast

Today’s Topic:  Q & A – Any Advice on How to Save My Business from Failing?

In today’s episode: We take a question from Tina who's business is starting to fail due to a competitor who opened and she can't seem to get back to where her business was in the past.

Shownotes:

Welcome back to the Local Small Business Coach Podcast, I am your coach Tammy Adams.  

If you are here in the states, I hope you had a great Thanksgiving. Even if it was just a day off for you, I hope you enjoyed it.

Guess what today is? Yep, it is time for our weekly question.  When I shared my business failure back in episode 24 it was a difficult thing to admit to myself, not to mention to share with you folks. But ultimately, I knew if I could help just one person with their situation, then it would be worth it.

While it has only been a week or so, the feedback has been positive and I hope the episode will continue to help others.  I’m sure we will continue to dissect the learnings in the future. With that said, I thought I thought I would pick a question that came in from someone fighting that struggle today. 

I want to thank you for sharing your story about your failed business. I am currently going through this very thing now. I feel like I work 24/7 and can't seem to get out of a hole that I have put myself in. When I started my business several years ago, I was growing each year and making a decent amount of money. Unfortunately, a competitor opened a couple of years ago and I haven’t been able to recover. My business has been down 30% from previous years and I'm afraid that I will not be able to hold on much longer. Should I just call it a day and close up shop or should I continue to fight?  I just know I’m tired and I’m not even sure I have any fight left.  - Tina

Hey Tina, I can only imagine what you are feeling. I remember those same feelings. During my last year, I felt so drained and second guessed myself and my decisions all the time. However, even though I was on the fence about if I could make it or not, the one thing I didn’t do is give up. I knew I would go down swinging. Even when I thought I didn’t have any fight left, I knew I had employees and customers counting on me. This provided me the energy needed to keep pushing.

You didn’t mention what type of business you have so I’m going to be a little more generic but my thoughts should still work.

Let’s tackle what seems to be your biggest hurdle, the competitor that has chipped away your business.  Thirty percent is a hefty drop, not going to lie. But I’m curious if it has been a steady 30% loss from the beginning or if it was higher at one point? If it was higher at one point then we at least know you are headed in the right direction and we could focus on how to move that needle even more. However, if it has been a steady 30% or even worse, still sliding, then there might be some bigger issues than just your competitor.

Let’s take a look at that angle first, shall we?

If your business keeps sliding, then your competitors have figured out a better mouse trap. Maybe their products are better or their services. For some reason, they are hitting your customer’s needs better than you are.

Tina, your mission if you are willing to fight longer, is to find out what they are doing better than you.  First and foremost, look at two key things: Customer Service & Quality.  Why these two? Because, people will pay more if they are getting excellent customer service and great quality. Don’t assume it is price. It might be these items.

I’ve seen many folks falsely believe it is price, so they lowered their prices to combat. Since the core issue had nothing to do with price, it actually just compounded the problem. So now, not only were they were losing customers due to customer service and / or quality, they pushed their sales even lower by dropping their prices. I’m not sure if you did this or not but if you did, then don’t worry, you can always fix that later. But first, you need to focus on how you can stand out from this competitor those two key issues: Service and Quality.

One thing I’ve learned about new competition opening, is that you always have the initial dip in sales due to what I call the looky loo syndrome. People are always excited by what is new and shiny. They will always give it a try. Whether they stay or not, is up to you and that competitor.

When I was with Home Depot, we knew that we would have an initial drop in business, but if we continued to offer great service and showed why they loved us in the first place, they would come back “home” if you will. Even better would be if that competitor stumbled.

Fast forward to when the competition opened with my ice cream store. This time it was a yogurt place. I told the kids that worked for me to focus on the experience our customers had and keep the quality of our product high. Folks would miss us and come back. Sure enough, after losing the initial 40% we crept back up and within two years we were back to where we were when they opened.

Now this brings us to the second situation you might be in.

Hopefully you are crawling your way back. The problem might be, it isn’t fast enough which is why you feel like you might not make it.  So the question becomes, how can you speed it up?

I still recommend that you make sure your customer service and quality are top notched. If not, put a plan together to make this a top priority. Then you will need to figure out how to get the word out in the community. Unfortunately, your most powerful ally in this will be word of mouth from your customers. If you can get them sharing their experiences on Facebook. If you can get your customers to do some reviews for you or testimonials, even better. Anything you can get add to your website or any other websites will help. Yelp, Google, etc will all help when folks are investigating why you.

The next thing you need to do it find out if they have a product or service that makes them the ideal go to vs you. Have they figured out something special or that you were missing in your mix that this competitor is now providing?

If you haven’t already, you need to study this competitor. Ask around, what are people liking. Look online, what are people saying? Even if these folks are awesome, you need to get to their level in your customer’s mind.

Tina, your question wasn’t really about your competitor but more about your business that is failing. But hopefully you can see, part of your problem is your competition. If you decide to hang on and fight, then you will need to address how you will continue to recover from this competitor opening.

So I guess the next question becomes, should you keep fighting or should you call it a day?

I’m always a champion of the underdog so my first thought is to keep pushing. But the reality is, that isn’t always the best option. I know when I look back on my situation, I realized I should have ended mine a year or two sooner. If I was honest with myself, I got hung up on getting back my lost sales but the problem was, even if I did, it still was not enough to create a living.

My question then becomes, if you could get back to your old sales and profits, is it enough to make a solid living? If so, then at least you know you are working towards having a business worth having. However, if you were barely surviving before the competitor, then I think you already know your answer.

I found I knew deep down what I should do, yet kept thinking the outcome was going to be different this time, even though that was more in my heart vs my mind.

What you will want to do is put pen to paper and analyze what you need in sales and in profit to keep the business going. You also need to identify what the timeline you are looking at to achieve it. If it is going to take you 3 years to get to this point yet you only have the financial resources to last another year, then staying in business might not be the best plan of action. Now if you can find other ways to remain financially stable while you rebuild, then it might be worth riding it out.

Tina, I wish it was a simple answer but it rarely is when it comes to a business’s survival.  I’ll tell you what, I’m going to reach out to you so we can discuss in more detail and see if maybe we can brainstorm a few ideas.  I appreciate you being open and honest and sharing this painful time in your business. I know first hand how difficult it is to reach out and actually admit you are facing this difficult time.

My message for anyone out there who might be in a similar situation is to try and take a step back, pull out any emotion you might be feeling, which by the way I know is easier said than done, and spend an hour or two with a clear logical mind and crunch the numbers. Not just your sales and profit but expenses and costs. What would you need to tweak, to change, to right the ship?  After you spend that first hour, spend a few more to develop a gameplan.

When you have laid out the plan, you need to determine if the business is worth saving.  If it isn’t, then make plans on shutting it down or possibly selling it to someone. There is probably something there that someone else might see as the seed to start their business or an existing business looking to expand.

Now, if after laying out the plan you realize that you are fired up and can see the light at the end of the tunnel then I say go for it! However, have some check in points along the way. Some milestones to see if you are on track. You need to have some exit points that make sense if you aren’t.

Don’t get me wrong, I want you to believe in your heart you will make it, however, I also want your feet securely grounded in reality.

Well, that wraps up another Q & A. Don’t forget that if you have a question you would like me to answer, shoot me either an email at [email protected] or head to the website LocalSmallBusinessCoach.com and leave your question via the speakpipe button.  Please know that I get back with everyone, regardless if I use the question on the podcast or not.

So until next time, remember, if you like what we are taking about, then make sure to subscribe to the podcast so you don’t miss an episode, if you love the podcast and what we are talking about, then please leave a 5 star review so other local small business owners know this is a podcast that they can’t miss.

Meanwhile, I wish you the best in your business and remember: Great Customer Service, coupled with Great business practices will set you on the path to Great Profits!

Bye for now…..