As spring approaches and winter days get warmer, our January resolutions often fall by the wayside. The goals that accompanied the New Year sounded great back then, but we quickly realized they were a lot tougher than we expected. A top resolution for many is to lose weight and get in shape.
It is a great goal, but often unsuccessful. Getting in shape isn’t easy and takes time, especially if you want long-term results. After all, the pounds gained during the holidays happened over many weeks. It makes sense that a problem that took weeks will also take some time to resolve.
Often, a business in economic distress—one with too much financial weight—is like a person struggling to lose weight. We want a quick fix, but it took weeks, months, or even years for the business to get out of financial shape.
So, in the spirit of our past personal resolutions, here are six tips to turn around your business and get it back into financial shape.
1. Grind it out—prepare for it to take time
Like a sensible diet to lose pounds, a sensible business turnaround will take time. Don’t expect a miracle pill in the form of a client or sale that will make your problems go away. Prepare to grind out small successes to gain financial strength. It may take time, but it will last.
2. Respect your most valuable resource—your people
Many struggling businesses do the wrong thing by firing staff so they can do more with less. Here is the reality: You don’t do more with less, you do less with less. That is especially true with your staff. You cannot turn around a struggling company without committed people. Sometimes you cannot avoid staff adjustments, but it should not be your first action. You will have fewer people to help the business succeed, and remaining employees will be highly frustrated and looking for another job. Any short-term gains will be outweighed by long-term strain on the business.
3. Cash projections are helpful
A projection is a business “workout journal” to fiscal fitness. By tracking your progress, you see how close you are to your goals. A cash projection is critical to stay on top of your financial progress. With it, you can quickly adjust as needed.
4. Speak to your creditors and debtors
Business owners often suffer in silence while they work out their financial challenges. But most creditors are quite reasonable when told the truth—yes, the truth. Creditors want to be paid, but they often take aggressive stances simply because they don’t know what is going on. If you cannot pay a creditor, let them know and give them a clear idea when you will be able to pay (by using your cash projection). Likewise, you need to talk with those debtors that owe you money. For example, consider reducing payment terms, such as from 30 days to 20 days, to increase cash flows.
5. Hire outside experts
Shows like Celebrity Fit Club or The Biggest Loser use outside consultants: nutritionists, counselors, and personal trainers. These experts have seen it all and know what it takes to help the contestants get it done. Frankly, it is much harder to succeed alone. In that same way, one of the best things a business can do is hire an outside expert to return to financial fitness. Outside experts can manage the other five tips listed here, along with any other steps needed to ease the weight on you and your business.
6. Stay strong, never give up, and be positive
It is tough to stay motivated when you are trying to get in shape, but if you don’t give up then you will make it. Similarly, your business needs your positive attitude. Your staff is scared of losing their jobs; your positive attitude will keep them motivated. You can be realistic and be positive—just don’t give up and you will make it.
Is your company in a position you never expected due to the challenging economy? You are not alone and you can bring your business back to where it belongs. These six tips are just some of the keys to your long-term success—let’s get moving.
Calvin Harris Jr., (@calvinhjr) CPA, is the President of Harvin Consulting LLC (@harvinconsult), a business-management consulting firm with expertise in business wind-down, turn-around, start-up, and growth management services. Calvin is also the National President and Board Chair of the National Association of Black Accountants, Inc. and can be reached at firstname.lastname@example.org.