When your business is struggling, you need to stop doing what you’ve been doing. Simple enough, right? That may sound like pie in the sky but a few small decisions can go a long way to fix what’s ailing your business.
That doesn’t mean it will be smooth sailing. But if you take a holistic, strategic approach to beat back the struggle, your business can grow into everything you imagined.
Almost every business will hit roadblocks at one point or another. Just consider how bulletproof businesses like Nokia, Yahoo, or Blockbuster looked twenty years ago. Whether from poor management, lack of focus on industry trends, or just flawed business models; opportunities were missed.
So, let’s just say you’re not alone in the struggle and you can learn from where other businesses fell short.
Maybe you have a cash crunch but revenue is stagnant.
Did a new competitor enter your space? That’ll leave a mark.
Maybe you lost a key client and that may necessitate layoffs.
Or perhaps you stepped on the gas too early but your revenue stream is a leaky bucket–at best.
The scenario isn’t important. What’s important is that your business is struggling, and you as the entrepreneur are responsible to fix it–otherwise you risk losing your business.
You need to step back, however hard that might be with tasks and problems piling up, and figure out what is going wrong. That is the only way you can correct your course.
After nearly a decade as a serial entrepreneur, this is what I do and what I have learned along the way.
Nail Down Your Financials
First things first. You must know exactly where your business stands financially.
You need to know:
- Your runway (cash on hand);
- How much cash you bring in each month;
- The total you are spending each month.
In short, you need to know when your business is going to be out of money (your runway).
If you don’t have your financials in order, you can’t make the right decisions. In business, eventually, everything ties back to the bottom line.
If you aren’t tying things back to the bottom line, you’re building a hobby or a tool, not a business.
Now you know the truth of the situation. It probably hurts. It’s probably scary.
You need to look at what you are spending and figure out how to stay in business by cutting non-mission-critical expenses. Sometimes this will be staff, which is terrible because that’s a person whose life will be affected. But this is business, and if you don’t do it your business will die and that’s not good for anyone else.
Audit Your Efforts
Next, you need to audit everything you are doing.
This includes business operation tasks, marketing, product development, sales, management, customer support, and whatever else. You need a top-level view of total operations.
One of the most helpful ways to stay on top of various departments and tasks is to keep lists. Sticky notes work, or a notes app on your phone. But there is a bevy of lists and to-do apps created specifically for this process.
Here’s an example of my tasks, though this has evolved as Credo has scaled:
I started working with my business coach years ago. Before we even had our first meeting, he had me track my time in 30-minute increments for a full week.
From that, we were able to see exactly what I was spending my time on by category.
We did this to help identify what I am good at and should keep doing and what I should hire others to do. Those were the things I wasn’t excelling at and it took some self-reflection (and honesty) to really nail those down.
But identifying what to delegate was absolutely vital. If your business is struggling then you need to go through this process to understand where your efforts are being wasted or not running at full capacity.
This video, from Dan Martell, takes a helpful deep dive into this process:
Tie Efforts To Analytics
Some non-revenue generating tasks have to be done in order for a business to grow .
You have to keep your books in order, you have to invest in retrospectives when something goes wrong, and you have to send invoices. Technically, invoices do create revenue but it is backward-looking so stay with me.
Other tasks you can directly tie to revenue. For example, PPC (pay per click) marketing spend. You can look directly at what you spend monthly on AdWords, for example, and then tie that to your Google Analytics (you have that set up to track revenue, right? If not, check out Annie’s site) to see what your ad spend is getting you.
Other tasks are more time-consuming. Necessary evils for business owners, unfortunately.
For example, if you are investing heavily in content marketing, you expect that to drive growth. But you need a system to track this over time. You need to have a look at the traffic these efforts are driving for you (whether organic, social, or referral), and if that traffic then turns into revenue down the line.
Attribution is hard–and about to get harder–but you need to have a handle on where your ad spend generates the most revenue.
How much time is being spent on each piece of content from creation to delivery? Map that effort to return on that investment. This also much be done over time as the ROI and ROAS compound exponentially, unlike PPC/other ads which are more transactional.
Point is, take the tasks you are doing and figure out which ones are high value and you should keep doing. Then, which are low value and you should hire someone else to do, and which ones are not generating revenue and are not business critical. Stop doing those.
Be Brutally Accountable
After your audit, you have a list of tasks to:
- Keep doing;
- Stop doing completely;
You need to eliminate all of the tasks in #2. Stop doing them.
Keep this list somewhere to check yourself against from time to time. At the end of the day, if a task is actually in number one or three, but has been lumped into number two, you’ll realize it and reintegrate it properly.
The goal of this step is to free up your time from non-valuable tasks. That frees up time for tasks that are going to move your business forward.
Cut out tasks that don’t matter and take up your time. Be brutally accountable and examine the ROI of each task. In most cases, you’re going to cut expenses.
First, you have to get back to being able to pay your bills or stop burning more cash than you make. What you need is to generate revenue until your cash-positive. For small businesses especially, this can take months or years, but you need to start somewhere.
Hypothesize and Test New Strategies
Now comes the fun part for anyone who enjoys marketing and product strategy.
Outline the new things you want to try. Capitalize on those ideas you had in the back of your mind or on your Trello board but never seemed to get to–and then get to work.
Maybe you’re invested in content marketing, but need to shift from 500-word blog posts four times a month to a pair of 5,000-word guides.
Maybe you’re an ecommerce business and you need to shift ad spend from AdWords to Facebook. And employ a retargeting strategy on top of that.
What do you definitely need, when budget permits? You need to bring in people smarter than yourself to help you with this. Whether you hire a coach or simply find mentors who have been through the struggle before and can help you generate ideas. You need to be humbly wise not whip-smart, and keep asking others for help when you need it.
The worst they’ll say is no and, in general, motivated people love to help other motivated people. So stay motivated!