What Not To Do: A Risky Business Gone Wrong
Everyone knows of some company operation that has gone south. Maybe your best friend declared a Chapter 13 for his business. Perhaps your business is not currently running so smoothly. We have all read the headlines, regarding the airlines and car factories. We live in financially difficult times. The economy is not what it used to be.
Exactly, what do we do when a risky business has gone wrong? What do we not do?
Before a business ever goes awry, the most important thing to do is prepare. Prepare for the future in your personal endeavors and prepare in your business endeavors. Just as you need to have your personal affairs in order, you need to consider the same for your business. Create a plan of action ahead of time, so that when your business is in the “thick of it” you will know what to do and not make rash decisions.
By preparation, I mean save for a “rainy” day. Budget. Be disciplined. Do not spend more than the company brings in. Have a plan, and stick to it. Be smart about your investments. Consider the individual lives your decision is going to affect.
That being said, lets play with some scenarios. Your business has been doing fairly well, but lately there is a dry spell. Money’s tight and operational expenses continue to rise. Consumers struggle to pay their bills, let alone purchase a new vehicle or invest in your business opportunity. What do you do? Is it time to cut people’s pay? Should you let someone go? Should you sell the company? Do you take out a loan on your business? Where do you start?
First, be rational. Do not start making decisions with lasting consequences based on “what if’s.” Think things through. Get advice from respected colleagues or financial advisers. Consider all options before making any decisions. In addition, consider how your decisions will affect employees, the company and consumers. Because you are the leader of the company, it is your responsibility to make the best decision possible. That decision may hurt you more than others. However, if more people can be spared, then, that may be the best possible solution. It’s obviously going to be difficult to completely relax, but try to rid yourself of stress as much as possible.
Stay positive. Keep things light with laughter. Remember, it’s not the end of the world. Give it some time and things will be okay.
Do not begin discussing your business issues with day-to-day employees. While the top executives of the company need to know, let the others work just as they were. If things get to a point where it is time to shut down, then take those steps.
The most important thing is to ask questions and get help. If things are not working, stop what you are doing and get some advice. Even if it takes your ego down a notch or two, you’re better off in the long run to look like a fool rather than continue to go in the hole.
Some of your options may mean cutting corners in operational costs. Maybe you can go with cheaper office supplies and not get top-of-the-line everything. Maybe you can find a better supplier for the materials needed to create your products. Perhaps, end-of-the-year bonuses will not be able to happen this year. Do what you have to in order to ensure that people keep their jobs. Try eliminating every unnecessary cost before cutting people.
Know when to quit. If you have exhausted every possible option, know when to close your doors. It’s really important to take courage, cut your losses, and move forward, rather than continuing in a downward spiral.
Overall, be prepared and be smart. Remember not to make rash decisions. Relax and think things through. Consider all options. Do not jump into crazy loans. Do not discuss the state of the business with day-to-day employees. Do ask for help. Do communicate with executives. Do cut unnecessary spending. Last, know when to get out.