Businesses can face downturns when sales decline or plateau. In such situations, it's generally clear that existing strategies haven't been successful, or at least not as successful as a business's owner might prefer. That means it's necessary to try something new.

Evaluate Your Business' Current Situation
Start by taking stock of the current situation. If business is dragging, look at the quiet time as an opportunity to dig deep into how the business operates at every level. Go over everything, down to the quality of the products or services you're providing. Little details, like how effectively the company uses the time provided by employees, can add up into a big picture with some clear indicators of what's not working.

In particular, it's crucial to pay attention to your business's marketing initiatives. Which ones are the most effective in terms of resulting in paying customers? If you can't immediately point to the best strategies you're employing, you may have a problem. Refocus the business's efforts on measurable marketing campaigns targeted very specifically at the right clientele. Survey your existing customers to see what you're doing right for them. Bite the bullet and contact past customers to see why they're no longer with you.

Pay for a Consultant's Expertise
It's possible that you'll need outside help to identify the problems within your company. A fresh look can mean spotting a problem that your team is too close to recognize. An outside expert may be more up to date on new technology, different marketing options and other factors that can add new life to a company. Doing additional research on your own can help, too, but both strategies may represent expenses that are hard to justify in a business facing problems. However, hiring a consultant and taking action on the new information are necessary, even if these costs are difficult to budget for.

Reevaluate Your Budget
Given the costs of turning around a company, it's tempting to create a better business budget and leap right into cutting recurring expenses like payroll. But it's crucial to consider the value of each expenditure before making a cut, particularly when dealing with human resources. Payroll cuts can have hidden costs, like the damage to employee morale. Plan just as carefully when cutting expenses as for the rest of your revitalization.

Make a Dramatic Change
Some businesses find that they need to take dramatic action to revitalize sales. There are times when the old company name doesn't make it clear to customers what you're selling and you have to rebrand. Perhaps you're marketing to a customer base that doesn't really need your product. Maybe you need to update your technology. In order to bring about a new level of success for your company, you have to be willing to consider any option that comes along. That means driving changes, even if the core team behind the company isn't comfortable with them. You can get advice and develop plans, but the effort isn't worth anything unless you implement real changes.

The Bottom Line
There's no universal reason for a business to have problems. Causes like economic downturns and failing to upgrade to newer technology are very different, but can have the same effects on a company's bottom line. In turn, that means that there aren't any universal solutions for revitalizing a small business. You'll need to take a long look at how your company got to this point and use that information to formulate a new plan. The earlier you can get started on revitalizing your business, the better. You'll have more resources to work with and less damage to repair. Keep your eyes open for potential problems to see if you need to take action, whether you've just finished turning your company around or you're trying to keep your business afloat.

Related Articles
  1. Professionals

    How Advisors Can Carve Out a Social Media Niche

    Social media is a great way for financial advisors to build a brand and potentially generate leads if it’s properly used. Here are some tips.
  2. Professionals

    5 Ways Your Small Business Is at Risk for a Cyber Attack

    Small business owners think they are immune to hacks because of their size, but they are not. When they find the guard is down, hackers are exploiting common weakness.
  3. Investing

    Essential Tips on Making Your Hobby Your Career

    Here are some ways to turn what you love to do for fun into your job.
  4. Entrepreneurship

    Why Every Small Business Needs A Website

    The reality of living in the twenty-first century is that customers find business information and product offerings predominantly on websites, and small businesses without an online presence ...
  5. Entrepreneurship

    Want to Open a Small Business? Beware of These

    While all small businesses face long odds, these four types are even less likely to succeed.
  6. Entrepreneurship

    What’s a Good Profit Margin for a New Business?

    Surprisingly, the younger your company is, the better its numbers may look.
  7. Entrepreneurship

    What's a Good Profit Margin for a Mature Business?

    How to determine if the amount you clear dovetails with the competition.
  8. Entrepreneurship

    Raises or Bonuses Better for Small Business Staff?

    Weigh the pros and cons of each and strike the right balance to retain a top-tier staff and a healthy bottom line for your business.
  9. Entrepreneurship

    5 Ways to Make Money on Twitter

    Find out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
  10. Entrepreneurship

    5 UPS Tools to Help Your Small Business Go Global

    Understand small businesses' struggles and the types of tools they need to go global. Learn about the top five UPS tools that help small businesses go global.
  1. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  2. What are the benefits of financial sampling?

    Financial sampling allows auditors to approximate the rate of error within financial statements. For accounting purposes, ... Read Full Answer >>
  3. What are the responsibilities of the principal in a company?

    Principals have different roles depending on the nature of an individual business, but the universal responsibility of a ... Read Full Answer >>
  4. What do hard and soft goods in the retail sector refer to?

    Hard goods and soft goods, also referred to as hardline and softline, designate different types of goods a retailer offers. ... Read Full Answer >>
  5. What are the most common business deductions and expenses for small businesses?

    Among the most common expenses and business deductions for small businesses are the expenses of getting the business started, ... Read Full Answer >>
  6. What are the most common instances to use hire purchases in a small business?

    Hire purchases are commonly used to acquire high-dollar business assets, such as technology equipment, transportation fleets ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!