The boat is rocking and the storm is brewing and your business seems unable to meet the challenges imposed on it by the circumstances, competitors, lack of stock, strikes… The situation may seem hopeless and your business is likely to go bankrupt. can lead to. Before it goes bad and you throw the key under the door, you can react in a number of ways…
Anticipation and your reaction speed are your best assets. Note that the following tips can also be applied if you want to increase your profitability. Don’t hesitate to implement them even if all the signals are green.
cut unnecessary expenses
Begin by creating a balance sheet of all your expenses and resources. Having a global view of your business can help you make better decisions. You then need to allocate costs according to products and services to determine which functions are profitable or not. You may decide to stop the parts of your activity that are not profitable at the moment as well as reduce some of the costs. There will be great difficulty in finding the right balance between investments that are needed for the future and those that are unnecessary.
reconsider your offer
Faced with increasingly connected and demanding consumers, it sometimes becomes necessary to reconsider your company’s position. To differentiate itself, a company sometimes must thoroughly review its manufacturing, distribution, or simply its marketing strategy. This is what Apple did in 1996, for example. At that time, Steve Jobs took over the reins of the company and found that the Apple brand was on the verge of bankruptcy. The entrepreneur bought NeXT, a firm he also co-founded, provided Apple with the NeXTSTEP source code from which the Mac OS X operating system was developed, and launched a “Think Different” advertising campaign to restore the brand’s values . Then follow the innovations we know, from the iMac to the iPad through to the iPod and iPhone. When we see what the company has become today, we tell ourselves that everything is possible, right?
Check the production line again
The challenge of this practice is not to affect the quality too much so as not to intimidate your customers. Be aware of the qualities of your product or service that led to the purchase decision. Ask your customers and check what they like and how you can change that. Some may even offer you solutions that can save you money or attract new consumers.
Re-negotiation with service providers
The first method that naturally comes to mind is related to the cost of providing your suppliers. Don’t hesitate to meet with them to find out what can or can’t be done. In addition to reducing prices, some may offer you alternative solutions that prove more profitable to them and that do not affect or do little to your product. In the event that your cash is very low, negotiating payment terms with them can become an effective way to maintain a good relationship while having the necessary funds available while waiting for your accounts to recover. Competing with different providers seems like a good solution which will give you the best price. It’s not the only suppliers who can help you. Don’t hesitate to contact actors like URSSAF who have great support if they are informed in advance and who can provide you with a deadline. On the other hand, customers can also speed up their rate of payment if their cash allows.
find funding
Another important player that can help you if you don’t notify them at the last minute: your bank. There are many ways to support you in this. We will specifically look at authorized overdrafts, credits and factoring. If your activity doesn’t allow this or your relationship with the banking contact has deteriorated over time, you can look for other forms of financing. Think about your current shareholders who may eventually reinvest. Explain to them the reasons that new capital contributions are needed as they will often be concerned about this type of demand, even if it is a question of less strong growth than expected. You can also find investors and fundraisers.
develop sales
Another way to get out of a potential bankruptcy, even if obvious: sell more or sell better. Once you’ve determined your most profitable products and products with the highest margins, refer your customers to them. They often won’t be aware of what pays you the most or least. To increase your sales, you can also consider lowering your prices. This solution should be taken with a pinch of salt as your margin is going down and you have to sell more to make this change profitable. Conversely, price increases can increase your margins and sometimes have little impact on your customer base. Developing sales can also go through the amplification of communication around your products or services. This risky technique often proves to be one of the most successful. You will need to assess the risk thoroughly before resorting to it because in the absence of results, it can definitely cost your company. Likewise, developing new sales channels, not exploited badly or at all, can contribute to their growth.