Every business owner wants their company to have a long and healthy life. However, due to certain unfortunate reasons, the possibility of closure may become a reality.
A company may shut its doors for a variety of reasons, such as:
- Lack of funding
- Product decline
- Non-compliance with legal requirements
- Negligent accounting
- Mismanagement of company resources
- Failure in succession planning
- Weak managerial decisions
- Disagreements in partnership agreements
While governments and state-owned financial institutions do provide aid to failing businesses, there are certain steps that companies can take to avoid closure:
- Start afresh
Remove all the preconceived notions you had. It’s time to be open to change and new perceptions. Be willing to accept advice and guidance from any quarter. Be willing to implement new technology or hire new people.
- Be people-centric
Your employees are your greatest assets. While technology, procedures, and processes are important, they won’t have any value without people powering them and ensuring their success. A successful company is one that houses a happy workforce.
Create open lines of communication. By encouraging workforce participation in management, companies can ensure that their employees are treated with care and respect.
- Avoid taking hasty decisions
It’s easy to panic when the closure is looming near. Companies need to avoid taking risky or foolish decisions. While ending the association with a vendor or investing in new technology may seem lucrative now, they may not actually be in your best interest in the long run.
Companies need to make decisions only after careful consideration of all factors involved.
- Be truthful with your stakeholders
Your stakeholders deserve to know the truth. Your customers, employees, suppliers, financiers, and marketers are integral to the successful functioning of your business. Inform your stakeholders if your company is heading towards closure. The sooner they are aware of this, the faster they can work on saving your company.
Discuss with them the severity of the problem and tell them of any plans that you have in the pipeline. Be open to their suggestions and solutions.
- Be the pillar of support during the storm
It’s only human to be afraid. But during such difficult situations, the job of the senior management is to remain calm and assure their people of positive results. While you can’t make false promises, just being by their side will help.
Be open about any new development and ensure that members of your senior team do not communicate with anyone through unofficial channels. This will prevent harmful rumors and gossip from spreading.
- Keep the well-being of the company in mind
While it is important to think of personal career growth and safety, it is equally important to consider the well being of your stakeholders. Before you take any decision, consider how it might impact your people. The more concern you show towards your stakeholders, the more likely they are to support you during these challenging times.
This Article written by Jonathan. He began in the production department and eventually worked his way up to managing a small team and over the course of a year built a book of business valued at north of $2.5MM a /year in revenue. More recently, Jonathan has founded his own management consulting firm A.K.A. http://www.furmantransformation.com, igniting his full passion in transforming all aspects of a company’s Sales, Marketing, and Operational Growth strategies, into the most powerful and polished version of themselves.