The odds of business survival are not stacked in your favor. Even the most optimistic business leader cannot argue with the available statistics about business survival rates.
According to the U.S. Bureau of Labor Statistics, two-thirds of all businesses make it at least two years while half of all businesses make it to their fifth anniversary. It’s only one-third of all businesses that can celebrate a decade.
The good news is that the longer your business has been around, the more likely it will stay that way. Those first few years in business seem to be the hardest, so if you can just get through them, you may have built something that can last generations.
When the Unexpected Happens
That’s not to say that things can’t go very wrong at any time however. For example, a data breach could lead to huge fines and even a lawsuit. A natural disaster could wipe out your livelihood. These types of unexpected events can harm even the strongest of businesses and leave a company on the verge of bankruptcy.
Many companies have hovered near bankruptcy, including Apple, IBM, GM, Lego, and even Starbucks. Countless smaller brands and startups alike have experienced this, including famous individuals like Stan Lee, Walt Disney and Abraham Lincoln.
Internet marketing leader Jerry Banfield is one of these individuals. “I got so many clients that I was literally taking people in faster than I could handle them. Then, my personal life started going downhill. I ran my business into ruin by maxing out all my business credit cards.”
Amazingly, these companies and individuals turned it around and scaled their businesses to greater heights than they ever had before.
Here are 7 real-world business strategies that founders can leverage to scale their businesses even if they’ve had a near bankruptcy:
Focus on value over giving away the store.
In a panic to get their ship financially righted, a leader may try to use freebies and highly reduced merchandise or services to win customers quickly. The strategy is that more people will come to get the free stuff and help build the business back up. However, what happens is that you essentially mainly attract the type of customer you don’t want: the one that comes for the free stuff, and moves on to the next company that is using a similar strategy.
Instead, think about how Apple came back from the brink. Steve Jobs and his team did not offer cheap products. Instead, they turned the brand into an exclusive must-have through marketing and by creating something unique. Then, they unapologetically priced those exclusive products at higher values because they were perceived as cool and innovative.
Market what others can’t do themselves.
This was an important lesson that Banfield learned during the many times he had to rebuild his Internet marketing business.
“The problem was that I discovered what I was offering in terms of services for social media advertising were already being replicated by other agencies. Or, some customers had even figured out how to handle it themselves.
To stop the income from evaporating, he kept learning new skills. Then he focused on where to apply those skills to work for an audience struggling with key problems. For leaders, that means continuing to scan and listen to the market to identify those areas. Then, it’s about taking that vision, acting on it, and communicating what you do differently.
Be transparent with what you are doing.
It may be easy for some leaders to decide they should get crafty in order to rake in those quick bucks. After all, there are many scams or ways to fool customers that can fasttrack a company to better financial results. Some examples of this may include unnecessary repairs, fake fans on social media or re-sold leads.
However, these methods usually don’t bring long-term, stable success or return customers. In most cases people figure out that the brand they trusted may not be following the letter of the law or isn’t being entirely honest or ethical in its business practices.
You might think it will take longer to bounce back by being transparent in everything you do. But the new reality is that it could be exactly what you need to get and keep customers for the long term. If you can prove your trustworthiness, savvy customers will see it and appreciate it.
Companies that have been less than transparent may have to work twice as hard to regain trust. Facebook is a current example, using TV ads to essentially beg forgiveness for its lack of data transparency. Wells Fargo’s recent sales practices also significantly harmed that bank’s reputation and it’s still trying to win back lost customers.
Aim for steady growth instead of fast success.
In the rush to amp up revenue, many business owners are tempted to use an “any means necessary” approach that often either violates rules or exploits loopholes.
Banfield learned this the hard way on Google, Facebook, and Udemy where he initially disregarded site policies completely. He then started following rules more carefully, but still exploited loopholes and committed minor policy violations.
The problem is that these strategies may work in the short term, but eventually site administrators catch on. Banfield was no exception, as he suffered suspensions and account bans just when business started to pick up again.
Instead, you should aim for steady and consistent growth from the beginning. Learn how to use sites and services effectively within their frameworks. Bans become far less likely, and lifetime success tends to be exponentially higher compared to quick money schemes that collapse.
Ask customers before assuming you are doing things right.
Lego is a prime example of this reality. It’s a company that pleased generations of kids and parents until around 2007 when many of it’s products seemed to be slipping in quality and it had lost some of the magic that made it what it was. The company continued to assume it was doing everything right until the financials said otherwise.
When the company started making Lego sets that customers told them they wanted, revenue came back. The same goes with any other brand. Listening to customers needs and wants and then delivering on those is the best strategy a leader can follow.
Don’t be in business just to make money.
The mantra that a company is only in business to make money is no longer popular today. Yes, there has to be cash flow to keep the ship afloat. But, it shouldn’t be the sole purpose of the enterprise.
Many of today’s customers want to know that you are doing something good with those profits, not just lining pockets or paying bills. Doing good for others and paying it forward can provide a significant return that will continue to build your brand and trust in the eyes of your prospects.
Get involved in a cause you feel passionate about, donate time or money, and encourage your audience to learn and get involved with that same cause.
Choose quality over quantity.
Leaders can also go wrong when they think they should create a massive portfolio of products or services. They want to be everything to everybody. However, like with multi-tasking, it leads to doing a lot of things not so well.
If you’ve ever watched one of those shows where an expert comes in to a restaurant to turn it around, you know that one of the first things they change is the menu. They often downsize it from a book to a page or two.
The reason is that the kitchen staff can do a much better job quality-wise with a few key dishes than they can preparing 100 items. This is why restaurants like In-N-Out Burger are so popular. They have just a few items, but those items beat out most other hamburger joints easily.
The same goes with that business you are trying to scale back up. Pick those products or services that you know will deliver the best quality and experience. Stick with those and you’ll go far.