20% of my business out the door. I’m scrambling. I’m stressed. What do I do?
You may be expecting a lot of motivation here. A lot of encouraging words. Keep going. Keep trying. Stay determined and you can do it.
Be weary of this advice.
As a manager – you’ll try to work your way out of any problem. You care so much. A lot of entrepreneurs, when the shit hits the fan, just put their heads down and work and avoid looking in the mirror and accepting if something could be wrong with the big picture. They avoid nurturing their competitive advantages. They blindly throw more money at marketing to try to outspend the problem. They are unable to diagnose the problems and fix them early.
I’m not saying there is a problem. Its the natural growth cycle of most businesses. You lose customers and you gain customers.
But if there are signs out there don’t spend so much time putting out fires that you miss them.
Make sure you are still spending time on the areas of your business that are important but not urgent. Big picture analysis. Employee role changes. Operational methods. Market analysis. Advances in tech that your competitors may have. Overall health of the market you are competing in. Etc.
Don’t forget the most important step – the exit interview and a competitor analysis.
Why did they leave you? If you have a decent relationship they would return your call and give you details on what they found elsewhere. This is one of those times an email may be more likely to get an honest answer from them because there is less confrontation. The goal here is to figure out what is the competition doing differently?
Tell them you understand. Tell them it would be invaluable to you to know about everything that went into their decision. Don’t get offended. Thank them.
There are four reason they could have left you:
- On one hand A lot of companies simply outgrow a service and no longer need it anymore. Its possible that it isn’t on you.
- Another company offered the service at the same price and same speed but better.
- They offered the service at the same cost and same quality but faster.
- This is the worst one – they offered it exactly the same but cheaper.
Do everything you can to find out which one happened and study the company they moved to. Get their prices. Figure out how they tick.
Ask yourself it is worth specializing and getting better or faster or spending more marketing dollars getting more businesses to come in to replace the losses?
Is your industry mature or is the market growing? It could be in a race to the bottom and the service you are providing is getting more widely available and naturally getting cheaper. You are in for a tough ride if this is the case.
My advice is usually to specialize further. Continue to look for, find, and develop a niche that gets you there better and faster so you don’t have to compete on price. Competing on price is how businesses die. It is usually what kills the 5-10 year old semi-successful business.
The ups and downs of entrepreneurship are what makes the good times so good. Stay positive and work smart!