Downturn: Six Steps to Turn It Around

by Leo Pound on November 17, 2014

Pound Consulting | Leo PoundIs your business in a downturn? Are you stuck in a place of indecision, not knowing what to do? Let’s face it, building a successful business in today’s economic climate is a constant challenge. Political uncertainty, fluctuating consumer confidence and macroeconomic growth are the norm. As a result, many businesses find themselves forced to face tough decisions or even on the brink of bankruptcy.

How do you face the tough decisions? Here are six steps to help you face them and move forward with certainty.

1. React Quickly

Time is of the essence. The longer you avoid the painful reality that your business is struggling, the worse the situation becomes. Accept reality, take control and create a plan to turn the business around. A downturn does not mean the end of your business.

2. Focus on Your Existing Customer Base

Your existing customers are your most important asset. In fact, studies have shown that it cost 5 to 7 times more to acquire a new customer than it does to keep an existing one. So start strengthening your existing relationships by taking the time to speak with your current customers. Is there an unmet need you can fulfill for them? Do they know about all the services or products you offer? Even though they may be a long-term customer, they may not be aware of your complete product line or services.  Open the lines of communication and determine how you can better meet their needs.

3. Conduct a Through Cost Analysis 

In uncertain economic times, every penny counts. Look for ways you can cut costs and reduce expenses. Now is the time to review everything you’ve always done and look at new ways to save money. Let your vendors know that you’re shopping around for the most affordable rate. Insurance providers and office supply vendors will often lower their rates to match a competitor and keep you as a customer.  Analyze your existing office space and look at areas where you can consolidate and save on rent.  Can you eliminate some of your shipping costs? Can you eliminate travel expenses through virtual meetings?  Leave no stone unturned.

4. Look for Guidance Outside of the Business

Don’t be paralyzed.  Finding the right turnaround consultant can provide beleaguered business owners with a sense of relief and renewal. Far too often pride prevents them from seeking the expertise of an outside resource.  An objective third party consultant will address the changes that need to be made in a timely and efficient manner.  I’ll go into this more in a future blog.

5. Get Employees Involved

Your employees are your most important assets.  They work with clients and customers everyday.  Ask them where and how they would cut costs.  How would they slash expenses?  It can be tough in the day-to-day running of a business to stay connected with everyone.  It will truly make an impact on your business.  It will help keep employees motivated and maintain morale.  In tough times that motivation and morale is key.

6. Never Underestimate Your Resilience

Tough times call for tough measures. The test of a true leader is how they deal with difficult situations. Remind yourself that you are resilient and that your company situation will improve.  Change your mindset, think positive and learn from the process. Think of this downturn as a chance to learn more about your business direction, lean-out your expenses and focus on the future.

I just started offering a new way for you or someone you know to utilize my consulting services, during a downturn or rapid growth. I am introducing the Power Hour. It’s an opportunity for you to speak with me for an hour. In that hour we can discuss your business direction, your strategies for success and more. It’s a chance to have some clarity and direction in your business at a reduced consulting rate.  Click here to purchase a Power Hour.

How have you made positive changes in your business?  What is your biggest challenge? Share what works for you in the comments. Have questions, share those too.

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Leo Pound

As Pound Consulting Inc.’s founder and principal, Leo Pound is responsible for day-to-day operations, as well as building partnerships, maintaining relationships and providing value to all clients. Born and raised in Philadelphia, Leo has spent most of his career helping companies around the world.  He has worked with many multi-national companies – including ones based or operating in China, Australia, Canada, England, Germany, Japan and more. He has in- depth knowledge of operational and strategic planning, M&A, forecasting and budgeting and cost containment. Leo is a hands-on professional who is sensitive to the pressures and challenges facing a troubled or rapidly growing company and their management team.

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{ 3 comments… read them below or add one }

Jenny November 17, 2014 at 9:48 am

Great tips. Whilst I hope to not have to use them I’ll bookmark them for future reference!

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Leo Pound November 19, 2014 at 6:18 am

I hope you don’t need these tips either Jenny. Thanks for stopping by.

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Ariana November 19, 2014 at 2:21 am

This is a really useful post. I’m just in the early stages of my business and fortunately it has continued to make steady, albeit slow progress. But I think it’s important to always keep things like this at the forefront of your mind to avoid getting too comfortable!

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