The U.S. Bureau of Labor Statistics has reported that 20.4% of businesses fail in their first year after opening, 49.4% fail in their first 5 years, and 65.3% fail in their first 10 years. While these numbers are sobering, they can sound a wakeup call to enterprises that are losing business, driving them to act to improve their conditions before it is too late.
Why Businesses Should Aim to Stay Afloat When Losing Business
Businesses should aim to stay afloat when losing business to avoid devastating consequences. A business failure can damage an owner’s personal credit score for up to ten years, making it difficult to secure a loan or financing in the future. Overcoming a business downturn helps a business maintain its reputation and keep loyal customers. Keeping a business running despite losses means keeping valuable employees, their skills, and their collective knowledge. It preserves the enterprise’s investments in equipment, supplies, and intellectual property for continued use and potential future benefits. Remaining open allows a business to maintain its position in the market, stay top-of-mind with customers, and prevent competitors from taking its market share.
13 Tips to Stay Afloat Even When You’re Losing Business
Keeping a small business afloat is generally challenging, so here are valuable tips that can help when you are losing business:
- Tighten financial controls. Restrict and carefully monitor the use of company credit cards. Scrutinize all company expenses and reduce expenses without impairing customer service or product/service quality.
- Negotiate payables.
- Examine all opportunities to improve operational efficiency.
- Get close to all your customers. Understand their thinking and their needs so you can better tailor your offering to them. Prioritize strong customer relationships.
- Focus on doing the very best work you can to please and retain customers. Never sacrifice quality.
- Lean into sales and marketing rather than hunker down and wait for the storm to pass. Get creative with your marketing strategies. Find ways to better set your business apart from competitors.
- Work to ensure positive morale among your team members.
- Pay close attention to your competitors.
- Focus on your small business finances. Regularly forecast and monitor cash flow needs. Improve your accounts receivable process. Make use of short-term financing options.
- Get your pricing right.
- Examine and adjust your business plan as necessary to improve your business conditions.
- Consider selling non-essential assets.
- Examine all debts and renegotiate their terms.
How a Professional Accounting Firm Can Help When You Are Losing Business
A professional accounting firm can help create a turnaround plan by conducting root cause analysis and providing financial forecasting. They can help with small business finances by helping correct poor cash flow and improving cash flow management practices. They can examine all expenses and identify areas where you are overspending, or where cuts can be made without sacrificing quality. They can help optimize inventory, help evaluate financing options, and serve as an intermediary in negotiations with creditors.
Seek Professional Accounting Assistance
Contact Orcutt & Company, based in Milford, OH. We deliver comprehensive financial management for small business owners and individuals, providing strategic solutions that best address client needs and aspirations. Our comprehensive accounting services, including bookkeeping, payroll, and tax, keep you organized and give you the data you need to make prudent business decisions.
