Ways to Overcome Small Business Failure and Thrive in Hard Times

Ways to Overcome Small Business Failure 

and Thrive in Hard Times

Failures in business are inevitable as an entrepreneur. Add to that reality, an event, a crisis like Coronavirus, and failure seems much more likely.  You can even rationalize a certain acceptance that your business was overcome by things you could not control.  Well that may be the natural gravitational pull of the defeated mind, but it does not have to be that way.  Entrepreneurs don’t give up easily, and certainly not without a fight.  Here’s how to overcome the typical turning points in business survival… Coronavirus or not.

A fundamental part of overcoming business failure is rooted in the mindset you have. It begins with a flexible and positive attitude and a willingness to change. Winston Churchill stressed this vital factor, saying, “To improve is to change; to be perfect is to change often.” 

Failure is a part of life, and that includes business failures caused by natural disasters and pandemics. How we deal with the potential of failure determines whether or not it ultimately leads to irrevocable failure.

We can learn a lot from successful business owners of the past, such as Colonel David Sanders, the founder of KFC (Kentucky Fried Chicken). At 65, this financially unstable retiree, with only a $105 to his name, roamed America in search of an investor for his fried chicken business. He faced rejection after rejection. However, armed with a positive mindset for change, he pushed ahead with his plans. Finally, someone embraced his vision, invested in him, and KFC was born. He sold the company for 2 million when he was 74.  Maybe not the returns on investments of today, and certainly not burdened by a pandemic crisis, but starting out at age 65 is tantamount to climbing Mt. Everest in t-shirt, shorts and flop flops!

Coronavirus continues to grow in the U.S. and ravages much of the world, but that does not mean that your business is absolutely ordained to fail.   Follow these rules to keep your businesses vital signs strong enough to return to a firm foundation, ready to weather any crisis aiming to damage your enterprise.

Adopt a Forward-Thinking Attitude — Post Coronavirus

We are living in the time of BC and AC. Think what you did in BC - “before coronavirus” and what will be possible AC - “after coronavirus.” Before you planned out your business, you started with a vision. Do it again, adding in the impact of Covid-19 on your business and incorporate present day realities into your overall strategic plan. Write the new recast vision down. Use it as a roadmap to create your revised business plan. 

Even if you've already started your business, maybe just a few weeks before the crisis became a crisis, you can still look ahead. What outcomes do you want for your business? Where would you like the company to be in the coming months and years?

To help you decide, your new or recast vision should include:

• Your mission statement
• The products or services you will offer
• Your business niche
• Ways to find prospects
• Marketing strategies
• Problems you will solve
• Ways to position yourself against your competitors

This list is not set in stone. Your vision could be as large or as small as you want it to be. The important thing is making it workable and achievable.

Conduct Frequent SWOT Analyses of Your Business System

A SWOT (strengths, weaknesses, opportunities, and threats) analysis is an examination of the internal and external areas of your business.

This exercise aims to identify areas that are working and those that are not. Here's a breakdown on each aspect of a successful SWOT analysis:

• Strengths are good internal factors within the business. Things that are working well. Develop these parts of your business. Use it as a model to build upon.
• Weaknesses are damaging internal factors. Something is not working properly. Look at how to make immediate changes, work toward something new, or stop what you’re doing entirely.
• Opportunities come from external factors and represent good prospects for the future. Capitalize on these ventures and act to make the most of them. Coronavirus is opening up opportunities for rapid growth for those businesses courageous enough to whether the storm and seize on the yet unforeseen avenues of opportunity.
• Threats are adverse external factors that pose potential damage to your company. An obvious example would be your competition, or an insidious pandemic crisis. Determine which areas of your business are affected by this problem, and set goals to make improvements that will minimize the potential for harm.

To prepare a SWOT analysis, begin by making a list of your identifiable strengths and weaknesses. Ask yourself where you would like your business to be in the future. Look at where you are now. Use the results of your SWOT analysis to design the goals you intend to accomplish and to develop a plan of action to accomplish them.

Manage Cash Flow Efficiently

In this pandemic, hoarding cash would be absolutely essential.  Without consistent cash-flow, or a standing still large bank account, your business will eventually dry up and die. If you survive the Covid-19 crisis, with enough moxy to think about your businesses survival potential, then cash will be on your mind.  You need to have money coming in, even if its a trickle, or you won’t be able to pay essential expenses. First, have a daily cash-flow forecast so you know what money is coming in and going out. Remember, this is only a forecast, but it will give you insight into your financial future.  Employee layoffs will be unavoidable during this crisis, but most will be cushioned by the government bailout provisions and enhanced unemployment.  Assure your employees they will be called back once the crisis is defeated.

Use the cash-flow forecast to project likely sales and expenditures (including cash transactions) so you know how much you’re likely to have in your bank account.

Other aspects of managing your cash-flow efficiently. include sending out invoices on time, taking deposit payments in advance, paying bills on time, and promptly following up with customers who fall behind on payments.  Patience here.  Not everyone battling through this crisis will be as visionary as you are, so work with them to satisfy debts owed to you.  Small payments are better than no payments at all.

Believe In Yourself and Prepare for the (Inevitable) Bad Times

When you’re up against unexpected personal trials that breed stress, your mind becomes muddled. Your self-esteem could take a tumble, affecting the way you see yourself.  Doubting your abilities will impact your business unfavorably. For that reason, make use of personal problems. See them as lessons to learn from.

Safeguard yourself by developing resilience. Understand that life comes with problems. Assess the situation objectively. Speak with a trusted friend or family member instead of ignoring the problem. Don’t be hard on yourself, and keep believing you can overcome the obstacles you are facing. Surround yourself with the right support network of people. Don’t give up.

Never quit. If you believe, and you really need to believe, then you would be willing to sacrifice everything to achieve your mission. If you are fortunate enough to work with a good team, they will have the same mentality to support your business, even if they’re laid-off. You will run into obstacles along the way, but how you deal with them and how you overcome them will determine your  potential for success.

Perseverance, Determination, and a Positive Mindset Reign Supreme

Running a business isn't easy. If anyone tells you otherwise, they’re lying. According to The Small Business Administration, roughly half of businesses fail within the first five years, without a pandemic crisis.  However, you can survive in the rough and tumble business world. Embrace the warrior mindset and refuse to become a number in the statistics of business failures.

“I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance. It is so hard and you pour so much of your life into this thing, there are such rough moments in time that most people give up. And I don't blame them, it's really tough.” – Steve Jobs, Apple co-founder

Steve Jobs persevered when Apple was on the brink of bankruptcy. What would have happened to Apple if Steve had given in to defeat?  They would not be the trillion dollar company they are today. that’s for sure.

Use success stories of people who failed their way to success to inspire and motivate you. Stephen King, one of the most popular authors, has had countless rejections. The nails he used to pin the rejection letters to his wall bent under their weight. Similarly, Thomas Edison failed countless times before he was able to perfect the electric light bulb.

"The electric light has caused me the greatest amount of study and has required the most elaborate experiments. I was never myself discouraged, or inclined to be hopeless of success. I cannot say the same for all my associates." – Thomas Edison, inventor of the light bulb

There are many more entrepreneurs and business owners you can add to this list. They all exhibited unwavering perseverance and determination.

Keep Your Customers at the Heart of Your Business 

According to Gartner statistics, 80% of a company’s revenue comes from 20% of its customers. Loyal customers are the success stories of your business. As you recast your companies vision and consider a post Covid-19 world, involve the ones you trust most in evaluating your business strategies, marketing campaign planning, and new product development. Share their case studies, consider their points of view, absorb their feedback (both good and bad), and make them feel important.

Starbucks, the biggest coffee shop chain in the world, knows how important it is to take the customer experience seriously. When hiring, potential staff members are vetted for their good attitudes, interest in the customer, and enthusiasm to meet their needs. The company is not afraid to invest time and money creating the best customer service experience it can deliver.

Embrace Failures as Short-Term Setbacks

Most of us were taught that failure is bad. Therefore, when we fail, we are tempted to throw in the towel and give up. But successful people use failure as stepping stones to climb out of their troubles. Understanding the many struggles successful entrepreneurs have overcome, will boost your motivation when you are faced with failure.

Reflect on what went wrong and find solutions to the problems that caused the failure. Right now, that failure is most likely Covid-19.  It’s time to learn from your pre-coronavirus mistakes and do things differently in the next phase of your recast business.next time. Draw inspiration from people who failed many times but eventually achieved their dreams.

Set Smart Goals and Develop Achievable Strategies to Attain Them

Write down your goals. This will give you clarity and make it easier to work towards achieving them. Use the SMART goal-setting method to keep yourself focused:

• Specific: State what you want to accomplish.
• Measurable: What results do you want to see? Break them down into easy steps.
• Achievable: Are your goals realistic? Make sure you have the time and resources to make them a reality.
• Relevant: Your objectives should line up with what you’re trying to accomplish for your business.
• Timely: Set a deadline and stick to it.

Next, develop a plan to put your SMART goals into action. Answer these questions to get ahead:

• What are the steps you will need to take?
• What are the time frames for each of those steps?
• Who will help you?

Invest in an Advisor or Mentor and Draw From Their Expertise

Find a business mentor or advisor to guide you. Draw from their pool of knowledge and personal experiences to help your business grow. According to a survey carried out by Sage, 93% of small to mid-sized businesses credited their mentors for helping them succeed.

It’s tough running a business alone. Entrepreneurs need encouragement, guidance, and reassurance when faced with problems. Mentors, often a seasoned, long experienced consultant, have been in similar situations, and they know how to help you. They’ll share valuable advice, give you constructive feedback, and connect you with the right people.

Take Sensible Risks and Step Out of Your Comfort Zone

Taking a sensible business risk is not gambling blindly without considering the consequences. Think carefully, weigh the options, and test them out.

For example, let's say you want to try a new marketing strategy that costs 20% more than your usual campaigns. Maybe this is a strategy that will boost your reemergence after Covid-19 passes.  Test it out first, by doing a sample run with a minimal investment. If it’s successful, invest more into this new strategy.

Post Covid-19…. Don’t take risks when your emotions are running high. Be objective, and discuss your plans with colleagues, friends, or family.  I have always found my wife to be my very best counselor and sounding board.  At the end of the day, you’ll have to take sensible risks and step out of your comfort zone with your business. But before you do, make the most of your wisdom, knowledge, and experience.

The Bottom Line

Having a failing business today, post-coronavirus, doesn’t mean it’s the end of the road. You will encounter obstacles along the way, but you will also find ways to overcome those obstacles. 

Someone somewhere has gone through the same trials you face. Learn from their stories and use your own story as a lesson for improvement and business success.