The United States is founded on the rule of law. England at the time was governed by the rule of kings. The difference is the king makes the final decision in important matters. The rule of law protected citizens from a monarch’s individual passion and self-dealing. Under the rule of law, everybody plays by the same rules. The rule of law allows citizens to know the consequences of their actions. This takes some of the risk out of decision-making.

If there is one constant in today’s business, it is that of continuing change. There is no rule of law or governing order. Your customers, their needs, your suppliers and your business environment are changing continuously. Planning for the long-term becomes more difficult. The survival of many businesses is put into question if they have not created a strategy for dealing with unexpected change.

I remember, years ago, taking the wrong exit off a highway and having to drive along a secondary road for a few miles. I saw a gas station, needed gas and stopped. I spoke to the owner who was pumping gas himself and listened to a long, sad story about how the new highway had taken away most of his business about ten years ago. I remember thinking that this owner had not planned for the change and then not responded to it. He hadn’t done anything – not sold the business, not diversified with a grocery store or car wash, not even just closed the business. He had hung on for ten years of a bad situation that had only gotten worse.

In most businesses, there are checks and balances. No one individual has complete control. The staff are responsible to the managers, the managers to the CEO, the CEO to the Board of Directors, the Board of Directors to the stockholders. This structure helps the company stay focused on its objectives. Everyone has a native ability to think logically and critically; but many people, including many startup business owners, have never had the training or practice to develop this capacity. When their struggling startup situation gets worse, they lose the ability to handle things rationally. Fortunately, it is an ability which people can easily master and a business owner that has the capacity to see things from the point of view of his customers is already well on his way.

In most businesses, you’ll find that companies you worked with in the beginning are gone – struggling startup, closed up, bankrupt or bought out. Some of them spun out-of-control, are still struggling and fighting the startup business crisis . Here are things to consider when your startup is struggling:

1. Have a Thorough Customer Satisfaction Process

A typical situation for a small business owner is one where a customer makes a purchase and says that the product or service is of poor quality. A typical reaction is to make changes to the product, often changes which the owner wanted to make anyway. This may be positive, but it isn’t the action which should result from the customer’s critical analysis, at least not right away.

The essential problem here is not that the product is of poor quality, but that a customer has criticized the product. There are at least three explanations possible: the product could be bad; the product could be good but the customer is ill-informed; or they were in a bad mood and took out their anger on the closest target. Since the three explanations would result in different actions, the only reasonable action to be taken is to find out more. It would probably be best to wait until the customer comes in again or another customer makes the same comment. A survey could be taken or they could be asked to explain the issues they had with the product. If the problem was a unique situation that only applied to one customer, the business owner could dismiss it. If the problem persists, it’s clear that the problem is with the product and therefore changes would be justified.

3. Look Forward

If you’re doing really well, it’s time to start worrying because someone else is going to be doing what you’re doing pretty soon. Keep an eye open for new trends, ideas and ways to do things. If you’re not sure, try it out anyway. You’ll only find the next good business opportunity by trying out a lot of different things. The key is to try out lots of possibilities, to do so without investing a lot of resources and to get out if it doesn’t work.

4. Be Just and Fair

Many people think they should be just and fair because of the potential results. This might be the way to get into heaven, or others will treat you as you treat them. It could also be argued that it is our obligation to be just and fair because we live in a society. These results may happen and the obligation of citizenship might be the only way a society can function smoothly, but the reason I try to be just and fair is that it makes life easier. Remember these tips are to help me make decisions and save time when you are struggling startup . By being just and fair in my dealings at any critical situation with other people I don’t have to be concerned with who I have offended.

5. Outsource and Subcontract Non-Core Services

The worst thing that can happen to a company, young or old, is to lose its focus. Anticipate products your customers may need but you don’t want to supply – have sources you can direct these customers to. Look for complex sections of your business that are common to many businesses, such as payroll. These functions should be outsourced so that you can concentrate your resources on your core business. It is impossible to be excellent at everything. Let somebody else be excellent at the things that are not central to your business goals. Some of what you sell are considered your core competencies. These are the real reason you are in business. You can produce these better than anyone else, but you probably sell other services just to help your clients use your core products. Can you subcontract these functions to other companies that produce them better and at a lower cost? Is it the best use of your resources for you to provide the service?

6. Improve Customer Relations

No matter what the business, the client is where the money ultimately comes from. The first job is to list each point of client contact. Go beyond the obvious of the sales and marketing department, look at support, training, and dispatching. Include any mailing, phone call or personal contact that the client has with your company. Once you have this list, make sure someone is responsible for improving the quality of each contact. Clients get upset or confused by inconsistencies. If both marketing and technical support mail information to the clients, the materials should have a similar look and feel. .

7. Focus on your Strengths and Necessities

Many businesses get in trouble because they are over-extended. They are offering more products/services than can be managed. In a well-run company, the revenues are matched to the expenses. This makes it easier to determine which products/services make money and which ones are killing the company. With the mess you inherited, you likely can’t tell which product is subsidizing a money loser and which ones can stand on their own. Have your employees keep a detailed time log for one week. While they are doing this, contact your largest customers and ask them which of your products and services they consider essential. When you compare the two lists, you may find the staff is spending 80 percent of its time on the least important projects. Spend your resources on necessities not luxuries. It is usually impossible to tell which is which until it is too late. Here is a quick test – items that are directly related to revenue or client contact are necessities. Spend the absolute minimum on everything else until you are convinced it is a necessity. Don’t splurge on the fancy leather office chairs, unless you are a dentist. Then getting the best chairs is important because this is a point of client contact.

The biggest obstacle preventing startup business owners from clearly and critically analyzing their challenges is that they are too involved in their businesses on a personal level. If that’s the case, it is also one of the problems preventing their business from being as successful as it could be. They need to step outside, analyze what they have and then choose the best of the action which will get them closer to their goals.

The correct reaction to a struggling startup business for unexpected change is to diversify. If you’ve got lots of things going, losing one or even some is not going to kill you. Diversify in terms of customers, suppliers, business activities and product lines and you’ll have good shot at being around for a while longer, even after lots of changes in your market.

Categories: Entrepreneur

Dylan

I'm 25, a software developer and I'm excited to be here and provide transparency to everything I do online. I build, grow and sustain profitable web-based businesses and I'll continue to use this platform to strengthen my own accountability and provide others with useful insight and data.

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