360,000 businesses are created in the UK each year. Of these, 80% succeed after their first year but only 40% will survive past the three-year mark. As entrepreneurs, we invest so much time and energy into a product or service that we are afraid to let go and change tactics. The worst thing to do when business starts going south is to double down on losing strategies and avoid facing reality.

Huge companies who once dominated their industries become redundant if they fail to adapt. Blockbuster, Nokia and Polaroid are key examples of businesses that ignored the competition and technological advancements.

You can be in that 40% of businesses that survive and thrive after three years or more. I’ve seen it happen as a coach, executive, and business owner! If you find your business in decline, these are the strategies you need to avoid:

Continuing Exactly As You Were

A business plan and strategy leading to the road to failure differs from one you should continue with. Ignoring the situation is a choice, just as creating an action plan is. Re-think the problem you’re actually solving for your clients. Does it still exist? Are there any new technology or methodology advances you are ignoring?

Not Seeking Customer Feedback

The best organisations are those that know exactly what their customer’s pain points are and they solve them in the right timely manner.

Actively ask for feedback, send anonymous forms and incentivise honest reviews. Learning what clients and customers love, so you can do more of that and less of what is not working, is the quickest way to pivot over focusing on your pitfalls.

Blaming Others

There will always be things we do not have full control over such as staff, technological advancements, and the economic and political climate. It is our fault as business owners if we don’t have enough agility to adjust to new demands.

We are responsible for being flexible with our business proposition and processes. This includes ensuring the market fit of our offering, recruiting the right team, empowering them to innovate and giving them the resources and training to do so.

Cutting Budgets Immediately

When failure starts happening, business owners start cutting budgets. The first budgets to be cut are usually those that boost morale like training budgets, company socials and healthcare. This will take away the feeling of being valued over profits. Look at what discretionary spending was. Do you really need that office space, entertainment budget, or business-class flight ticket?

Neglecting Cash Flow Management

Cash flow issues are the biggest reasons businesses fail. Whilst Nike rode the fine line for years of investing every penny they made into even bigger and bigger orders of trainers to grow, there was no guarantee they would sell them. Like Amazon they focused on growth at the outset, knowing scaling will succeed and make them profitable.

Get clear on your profits and growth model. Keep everyone up to date with the numbers from investors to banks. They don’t react well to surprises and will be the entities that can help when you are having cash flow problems.

Not Addressing the Impact on Your Team

Real leaders are created in tough times when they can support their people rather than drive them into the ground. Your stress becomes their stress and it is important to let them know you value them and to listen to their input and feedback. They may just have some insights needed to turn things around!

Not Accepting Help

We never want to hear that we are wrong. Yet, if we are running a failing business, we are not doing something right! As entrepreneurs, we are so close to our businesses that we could be missing something hugely obvious or avoiding what people are telling us because we know change is going to be difficult. We need to remain open to both criticism and support.

Remaining Silent

Transparency is an important trait of successful leaders. If your team does not know there is a problem, they will never come forward with a solution. Silence on core business issues creates anxiety when we have no solutions. It is in their best interests to know exactly what is going on so they can support you in finding and implementing new strategies.

Letting The Business Become Our Identity

After spending hours, days, and maybe even years working to build a company, it is hard not to feel like you have failed personally when business isn’t going well. You are not your business. Remember who you are as a person, your values, what you enjoy on a weekend, why people like spending time with you and what makes you happy.

Avoiding Our Feelings

72% of founders say entrepreneurship impacts their mental health, according to Forbes. Business owners cannot take care of a team or customers if they are anxious, stressed, irritable and becoming increasingly overwhelmed. Taking time for ourselves may feel like the least pressing matter, but this is the time when it is most crucial.

When business owners begin to neglect their own health and desires for the business, it’s time to step back and seek professional support. It’s important to seek help as soon as it’s needed, or even before, developing resilience and agility!

I support individuals through coaching to look at the facts without judgement. Having a failing business isn’t a moral failing or inherently bad. Developing some self-compassion and knowing your self-worth in these circumstances means seeing things for what they are.

We can take an objective stance, look at our options through coaching, and move towards a plan for a brighter future. Seeking support, opening up and making changes head-on is how the greatest leaders have built successful businesses time and time again.