What Do You Do When Your Business Isn't Working?

Creating and growing a successful business is difficult.

Everyone who starts a business does so with the intention of being successful, but there are a lot of challenges involved. For every business that succeeds and makes a real impact on the world, there are dozens upon dozens that don’t make it. Whether it’s because of poor planning, poor communication, or just plain rotten luck, plenty of businesses simply never get to reach their full potential. The question is, what do you do when that happens? With that in mind, here are some ways to deal with it when things go wrong in your business.

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What To Do

The best-case scenario is that you catch the problems early enough to do something about them. Being able to course correct and figure out how to deal with a particular problem as quickly as possible isn’t always easy, but it’s often the very best thing for your business.

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The worst thing that you can do is to be stubborn and refuse to address problems and make the necessary changes to get back on track. Be willing to adjust your business and move it in new directions for the good of not only yourself but everyone involved as well.

Financial Issues

One of the most common reasons that businesses fail is simply that they don’t have the money that they need in order to function properly. If that’s the case, then there are a few options available to you:

Bootstrapping: You can use your own money to fund the business, and that may include savings, liquidating a retirement plan or some other investment account, or taking out a second mortgage on your home. Obviously, using your personal assets in a risky venture carries a high risk of loss, so think about this option carefully.

Crowdfunding: This has been a popular option in recent years, but the number of people participating in these programs as investors may have slowed down. This option requires a great deal of work to promote your business funding idea.

Private investors: You may be able to find business contacts or industry peers who know you, and believe in your idea enough that they’re willing to invest.

Consider the options listed above.

A traditional bank loan is probably not an option for you, because a bank will require collateral, and they will likely not lend to a business without a track record of growing sales and profits over 3-5 years, at a minimum.

Raising money in any form is difficult, because investors are justifiably nervous about helping to fund a struggling business. People don’t like feeling as though they’re throwing their money away, so keep that in mind as your attempt to raise funds.

Liquidation

Of course, if the worst comes to the worst then you may have to consider liquidating the assets of your business. The truth is that there may come a time when filing for bankruptcy is your only remaining option. It can be incredibly discouraging to feel as though your business was a failure, but the only real failure is if you don’t learn from the experience and try and move forward onto something new and better.

Now, this might not be something that you want to think about, but it’s crucial that you don’t let yourself ignore the potential for disaster when starting a business. Sure, there’s nothing wrong with focusing on the positive aspects of your business but hiding your head in the sand and ignoring it when things go wrong is irresponsible and is just going to make the whole situation worse.

You Can Recover

A large number of successful entrepreneurs have had business failures along the way; so don’t let a financial setback bother you for too long. Pick yourself up and move forward. You can do it.

This post is for educational purposes only.

Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

Co-Founder: accountinged.com

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/

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Image: Bullseye, Jeff Turner CC by 2.0