Q. My business has been struggling a bit. How can I tell when it is time to get some outside help?
A. We often say that companies that seek out our consulting services fit into two categories. They are either desperate or inspired. Desperate companies have an issue or issues that are holding them back, or in some cases are crippling or destroying the organization. In contrast, inspired companies have a vision that they need help to achieve. Most companies fall into neither category. They are happy with their circumstances, growth and profits, and therefore, they believe that they need no help from consultants.
While inspired companies are fun and exciting to work with, assisting desperate companies to become successful holds a special reward. However, there is a small window between desperate and too far-gone to help. These companies face two challenges. The first is realizing when they are in that window. The second is being willing to reach out for help before it is too late.
While there are several signs that your business is trending towards desperate, if you find yourself in any of the following three situations, don’t wait. You need an intervention. Take immediate action to get help from a competent consultant that can work with you to right your organization.
You are using your own cash to sustain (not grow) your organization. Several companies have contacted us after the owners have used up personal savings, taken second mortgages on their homes and sold assets to sustain their business. Worse yet, some of these companies have taken loans with interest rates that are beyond usury. If you find yourself in this position, you have a broken business model. You can keep pouring cash into the business until you have exhausted all resources, but it is very unlikely to have a positive ending. Until you change the model, you won’t crawl out of the hole. Stop digging and ask for help.
You are losing revenue year over year. If your revenues are dropping, ask yourself if the entire market for your product or service is shrinking or are you losing share?
If your market is shrinking, you may need help in structuring a plan for changing your business model, but be reasonable. If you were a saddle maker when Ford started producing cars, it didn’t mean you should have started manufacturing automobiles. Instead, you should build on what you know. Take your knowledge of cutting and sewing leather and make seats for the new horseless carriage. We have helped more than one business through this process. Consultants with experience in varied industries may be able to help you think about your business in new and different ways and create a plan for the future.
If you are losing market share, analyze why your competition is winning your customers. Is it your product/service package, pricing, service level, marketing, or something else? Getting a fresh perspective can help you to discover why you are losing customers and assist you in putting a plan in place to get them back.
You are losing key personnel. If your best employees are leaving, there are reasons. Perhaps your culture is declining. Maybe your customers are unhappy and it is hurting morale. Alternatively, your competition may be wooing them away. Whatever the reason, the best employees leave a struggling organization because they can. Unfortunately, as this occurs, the speed at which your organization declines will increase. When talent walks out the door, the other employees will smell blood in the water. Only the most loyal and those who have no other good choices will stay. Often a third party can discover what is going on within the ranks. Employees will disclose to the right consultant information that they will withhold from you. With this information, you and your consultant can stop the turnover and salvage the talent that remains.
If your company is experiencing any of the three situation describe above, don’t wait. Doing more of the same will not change the outcome. You need an intervention. There is no shame in reaching out for help. However, there may be regret if you wait too long and your window of opportunity closes.