Business is slow - what are my options?

Why is business slow?

There are many reasons why your business may have slowed. It could be something unavoidable, such as seasonality, changing trends or circumstances in your industry. On the other hand, it could be a fault in your business. 

Common causes of business slowdowns include:

• An inconsistent pipeline - You’re not generating enough leads or sales.
• Seasonality - Seasons, holidays and annual events lead to lulls in a business’s cycle. The hospitality industry after Christmas is an example. 
• Economic changes - Shifts in the economy can impact consumer confidence and dampen sales. 
• New competition - Newcomers to the market can cause significant disruption and disrupt your revenue. 
• Changing consumer demand - Trends in consumer motivations and preferences can lead to a gradual decline. 
• Industry events - Events occur in certain industries that drive up prices or dent demand. 

It’s not always easy to determine why you’re experiencing a slow period, and there may be several factors at play. But whatever the cause, there are steps you can take to help you get out of the slump.

Business is slow - what can I do?

Think about a time when you were successful

Over time, it’s easy for owners and directors to drift away from their original vision and forget why they went into business. Revisiting your original vision and thinking about what made your business successful in the first place can help you refocus on your strengths. 

Make a list of the likely problems

As an owner or director, you can be too close to the business to see its faults. Looking at it objectively with accountants, business turnaround experts and friends or family can help you identify what’s going wrong.

Ask yourself questions like:

• What has been working well for the business up until now?
• What do your customers say about your business?
• What can you do better?

Think about the parts of your business you may need to tweak to bring sales up to speed and assess the external factors contributing to the decline. Comparing the business’s performance during the same period in previous years may help you notice patterns. Once you have a list of the potential problems, think about the solutions and create a new strategy. 

Free up funds to reinvest

A common cause of slow periods is a lack of investment. Businesses, particularly in industries where slow payments are the norm, often lack the cash to invest in stock, marketing, staff training and the new products and services that drive customer interest and sales.

If a lack of cash flow is slowing your business down, selling a non-essential asset or exploring alternative finance streams such as invoice finance or asset-based lending could provide the liquidity you need.

“Spoke with Chris who put me at ease straight away. He was very knowledgeable and listened intently to all my worries and concerns. Will definitely be using Real Business Rescue and advise anyone with business issues to give them a call.”

Diana

 

Contact the Real Business Rescue Team today

Chris Bristow
Business Debt Expert

Generate more leads

Businesses need good solid leads, and being unable to generate them is a key cause of failure. All companies must create an effective way of generating leads to get them off the ground, but some SMEs are victims of their own success and become too busy to maintain them. And that’s where the problems start.

Thinking about what has worked for you in the past, where you can find your customers and how your competitors market their businesses can help you put a focused strategy in place.

Renegotiate your debts  

Your sales may be down, but costs such as rent, utilities, tax and raw materials will continue to mount up. If you’re struggling to keep up with your liabilities, there are steps you can take to give you more time to pay the money you owe. For example, you could negotiate an informal debt agreement with your creditors or make a Time to Pay Arrangement with HMRC.

Sell non-essential assets

Selling assets the business owns that are not essential to its day-to-day operations can be an effective to raise money during a slow period. It’s not sustainable in the long term, as once the assets are sold, they are gone. However, it can buy you some time to restructure your debts or put a business plan in place.

Reduce your costs

If a slow period shows no signs of ending, you’ll need to think about cutting costs. It’s not always easy to know where to start, but if you have a flexible lease, you could look for cheaper premises. Other options include reducing unnecessary travel, focusing your resources on core products and reducing the work you outsource. At some point, you may also have to look at your staffing costs.  

Seek external help

Plenty of people have been in similar situations and come out the other side. Other business owners, company accountants and business debt charities can all be useful sources of advice and help you make more informed decisions. 

At Real Business Rescue, we understand the ups and downs of running a business and have supported thousands of directors experiencing similar problems. We can discuss your circumstances and guide you through your options.

For example, if you are struggling to pay your debts due to a slow period but believe your business model is viable and you will soon return to profitability, a Company Voluntary Arrangement (CVA) could be a good option. It allows you to pay your debts in monthly instalments over three to five years while continuing to trade.

Alternatively, if your business has valuable assets but is under intense pressure from its creditors, Company Administration could provide the respite you need. It gives you some breathing space from creditor pressure to reorganise and restructure the business. 

On the other hand, if your business’s finances are past the point of no return and you’re ready for something new, we can help you close the company in an orderly and efficient manner through a liquidation process.

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Speak to a business turnaround expert

Knowing what to do when your company is struggling is never easy. If you’re worried about a slow period or are experiencing signs of financial distress, we provide confidential advice and will explore your options in a supportive and pressure-free environment. Please get in touch for a free, same-day consultation or to arrange a face-to-face meeting at one of our 100+ offices throughout the UK.