5 Action Steps To Save A Small Business In Crisis By Connor Campbell, NerdWallet Business Finance Expert
Over the last two years, the UK has been a hotbed of start-up activity; thousands of companies have thrived, across a range of sectors, providing opportunities for people up and down the country. However with the cost of living crisis taking hold, and a recession on the cards, small business owners can find themselves worrying about the future; what it looks like for them and their business, as well as their employees. And the rather worrying reports that half a million small businesses are at risk of going bust within weeks are doing nothing to settle fears. Although it’s true that many small businesses have suffered so far this year, there are steps business owners can take should their small business be in crisis.
Understand the why, where and how
If a small business is in crisis, whether that be due to cashflow, supply issues, recruitment, or any other reason, it’s important to take a step back and understand why this is and when it started. From there entrepreneurs can work backwards to ensure it’s recified. If, for instance, there’s a supply issue and products can’t get to customers in a timely manner, it’s important to communicate this clearly and explain the situation in order to minimise damage and keep customers happy. If, however it’s to do with recruitment, it could be that a job advert isn’t exciting enough and reaching the right people, while if it’s cashflow, there could be an issue with margins, spiralling external costs or payment along the chain. Looking at the big picture, rather than small areas, will give clarity on what’s working and what isn’t.
Don’t be tempted to change everything all at once
The knee jerk response to a crisis in business can be to overhaul everything, but, more often than not, that will just cost time and money, without giving any tangible results. Instead, just one small change or tweak could make a significant difference. A great example is marketing; by not optimising marketing and adverts properly, companies can lose out on customers, while also spending money needlessly. Instead of stopping activity altogether, an easy fix is to understand where the target audience is and what drives them to interact.
Make use of free tools
There’s a lot of help out there for business owners nowadays. And that’s especially true for start-ups, from assistance with getting started and writing a business plan, to financing, recruitment, marketing, or scaling. Much of it is free, either as online resources or through local chambers or growth hubs. The same can be said for using free versions of various apps and tools, such as video software and email solutions. Although most platforms are paid for, many do offer free packages. So whether business owners want to upskill or simply utilise a free solution in the interim, there will usually be a tool they can use.
Don’t be deterred
When things aren’t going to plan, even the most positive entrepreneur can feel disheartened, but working in a negative mindspace will only exacerbate the crisis. Every start-up experiences bumps along the way and faces challenges they didn’t expect, but the only way they come out the other side is by sticking to their vision, embracing the company’s potential, and working through the rough times.
Seek advice from external and impartial sources
Being a small business owner and entrepreneur can be a lonely place – but it doesn’t have to be. There are hundreds of groups, forums and events designed for small business owners to share their experience – as well as their success stories. Utilising these networks to seek out advice can be a huge benefit, helping owners get different opinions from peers, as well as tips and tricks they can implement. A local chamber of commerce is a great place to start, while online channels and groups on Slack, Reddit and Facebook create a community for local business owners.