Signs of a Drowning Company
We are not too far past the time of water rescue teams and life jackets. It can be difficult to know when it's time to cut your losses and leave a sinking ship, or if you need to jump in for another try before the business goes under.
This guide will give you signs from which you can identify a drowning company, making it easier to decide whether or not it’s time to bail on them quickly, or take things slowly and see if they can be saved.
As always, use this article as a starting point in your investigations so that you know what steps to take next.
Has the Business been Bad for a Long Time?
It becomes somewhat of a bad habit to hear about an ongoing business and either continue your prior relationship with them or quickly move in to help.
If you're in that boat, then you'll want to change up your routine, because it will probably doom you to failure. The sinking ship isn't going to have whatever flaw it has magically repaired when they see you waving at them from shore. If they don't get it together on their own, then they’re never going to do so with you standing there watching.
If you do decide to stick with them and hope for the best, then it's time to be ready for a tough business or two. If nothing else has changed, then your new management will have to work much harder than they ever thought of in the past. You'll need to be willing and able to give 100% all the way through for there to be any hope left at all.
You may also want to delay your responses whenever another employee tries to give you some great news about how they're getting their company back on track. They may even start rolling out commercials on local TV just as you turn on your TV and see that same ad playing over and over again.
I’m not saying that they’re wrong. But I’m also not saying that they can bring the company back to life. Your job is to make sure whatever hope they have doesn't continue to destroy your own business.
You need to act as if you've never heard a thing about them before in order to be able to come up with the right approach for your business. The other employees may think that you're hardhearted, but at least they won't call you stupid.
Now if you do decide to abandon ship and head out on your own, then there's no need for any of this emotional stuff, because you'll probably have seen this pattern many times with other businesses too.
But when you jump ship, it's time to leave all of your emotions behind. A sinking company is no time to make new friends, especially if they have you working with them in hopes that they'll get back on track.
It’s up to the employees and managers of a sinking ship to realize that they can’t continue as though nothing has changed. If anything, the changes may be more permanent than they think.
You need to get out of the sinking ship before it sinks any further, and if you do decide to jump on your own, then at least you've got the emotional distance and exhaustion behind you.
Is It Still Being Supported by a Profit Center?
If the company is sinking, it's probably because all of their profit centers are dying too. If they can’t revive them, then there's no way that they're going to be able to pull themselves out of their tailspin. Every external source of help will have to be cut off in order for the ship to stay afloat.
You need a business with a strong foundation like this if you plan on taking a chance at saving it. You may have a good business built on other things like intrigue or some emotional attachment, but if you can't sustain that then it's time to get out.
Even if you don’t have any other businesses at your disposal, you can still make a go of this one. But if you don’t have enough capital to get it back on track, then it will be hard to make it through.
If it's not supported by profit centers and revenue sources, then there's a strong possibility that the sinking ship is going nowhere fast. This will also make managing the ship much more complicated and difficult. You won't be able to set the sails and ride out any storms that come its way.
The First Step to Saving a Sinking Ship
Now that you've seen the things that you should avoid, it's time to learn how you should approach the business. The first step is acknowledging all of the issues around, and coming up with solutions and strategies to deal with them. You need to do your best to make sure that everyone else is onboard with your plan, including the customers and investors in your sinking ship.
The main thing here is not to allow anything bad to happen because of a lack of communication or a misunderstanding between departments. This will need someone who has experience in both management and staffing, so bookkeepers won't be able to handle those responsibilities on their own.
Since the business is sinking, you need to make a list of problems that the business is facing.
Products are probably not meeting customers' needs.
Staffing levels are too low to meet their needs.
The business doesn't have enough capital to make it through the downturn.
These problems will have a tremendous impact on your business and may prevent you from making it through this crisis without getting stuck in a rut they can’t get out of. So you'll have to come up with plans as if you were starting over entirely and don't have any previous relationships with any of these businesses, customers, or investors that could get in your way now.
If you're stuck in the middle of a sinking ship, then how will you be able to keep it afloat? Maybe the issues are out of your hands, and they have to sink or strong swim. Maybe they can still be salvaged if you have a solid plan that everyone is on board with.
Making It Through the Downside at All: The Realities
Regardless of whether you choose to jump ship or not, there's going to be some major problems ahead for both your business and life. But although it may be difficult, you should at least attempt to save the sinking ship.
You'll need to get experienced management to mentor you, and you'll have to get the staff and customers on board. You'll have to give it your all in order to make it through this crisis. You can't go down with the ship just because you don’t want to give up control.
The reality is that a lot of businesses do go under during these times, but there are ways out of this crisis. Your business will be more stable if the people who are still on board have a good amount of experience in management and staffing. This means that it's probably time for everyone else at least to take a look at what's going on before it's too late.
Conclusion
Even if you decide to abandon ship, you won't be able to come up with all of the strategies that you need for a successful comeback. But at least you'll have the emotional distance and experience behind you in order to see where everyone else is coming from, and what their concerns are.
You will also be in a better position than most to take on a sinking business that has fallen on hard times already. Your decisions will probably make more sense because your future won’t depend as heavily upon it like it would for someone else.