Blog Post

Going public about business difficulties

Small business is tough. Keeping the doors open can be a challenge, and it’s one that I’ve been feeling acutely in recent weeks.

My tendency to frame issues through a communication lens leads me to see business difficulties in terms of the communication challenge presented. When it comes to communicating business difficulties, here are some of the options:

  • Present a ‘front’ of success, in the hope that the image of success will generate real success (this seems to be the approach that most small-business owners adopt)
  • Launch special offers and promotions to bring in customers, in the hope that increased activity will lead to long-term income gain, even though the short-term activity may create more short-term pain (this is another common approach)
  • Re-invent or re-launch the business in some way, with a marketing blitz and the announcement of something new (this is a tactic long favoured by consultants, and to me it always looks like an admission of slow times)
  • Talk to clients openly and honestly about the challenges faced by the business
  • Ask clients for help to build the business
  • Say and do nothing different (and perhaps turn the lights out when you close the doors for the last time).

My small business has been open for 18 months, and we haven’t yet reached break-even point. We’ve gone through a huge learning curve and we’re now happy with the way the business is operating. Our clients seem genuinely happy with what we offer.

The problem we face is that the customers/clients are too few. Growth has been slower than I’d anticipated. (I understand that is a typical error, and it’s an error I managed to make even though I put a huge amount of effort into planning what the growth might look like.) We’re now sitting at a little over half the income I forecast. This means that, every day, it costs me more money to open the door than I collect in revenue. I have limited months remaining to turn this situation around.

When we were faced with the choices listed above, we chose honest communication and asking for help. We decided to tell our clients that we were struggling. One reason behind this decision was that an increasing number of clients were congratulating us on being busy and making a success of the business.

About three weeks ago, we put a letter to customers/clients on every table in our café. We wrote a simple explanation of the situation we face and gave some suggestions about what they could do to help. Before putting the letter out, we made sure our staff knew what we were doing, had seen the letter, and had some responses ready in case of client questions.

So far, the reaction from our clients has been supportive and positive. We’ve noticed a definite increase in trade, and we notice that our regular clients are visiting us more often.

We’re still a long way from breaking even, and a long way from feeling confident that the business will succeed in the long term. But the gap is closing, and the pace of that closing has picked up a little.

So here’s my reflection on the things worth considering when your business is facing difficulty:

  • Be honest with your clients about the situation you find yourself in
  • Be clear with your clients about what you’re trying to achieve and why you’re trying to do it (this links to the reason why you’re in business)
  • Be consistent in your messages and with the things you do to support the messages
  • Be wary of putting gloss over a bad situation
  • Be wary of ‘sales-building approaches’ like advertising and price cuts – these might bring in customers temporarily but are unlikely to be a long-term fix
  • Be wary of reinventing yourself (along the lines if ‘I’ve just discovered this fabulous new way of working’ or ‘I’m relaunching my business with a range of exciting offerings’) – this belittles what you’ve been doing to date and suggests that your existing clients are in the wrong place
  • Don’t leave it until it’s too late. If you need help, then I think it’s best to ask for it. If you close your business without asking for help, there’s a reasonable chance that people will lament your going and wish they’d known how to help.

 

 

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