4 Simple Tips to Rescue Your Business From Liquidation

4 Simple Tips to Rescue Your Business From Liquidation

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Most businesses go through a life cycle, but must growth inevitably be followed by maturity, decline, or even failure, or can businesses escape the limits of mortality?

At a time when so many SMEs in South Africa are facing severe threats from multi-national rivals – when managers and society at large are all concerned that yesterday’s engines of social responsibility and wealth creation are becoming redundant – the challenge is to find new paths to sustainable growth through above-average performance, introducing new products and processes, up skilling employees, and creating new markets.

Embracing change for growth

Dynamic businesses resolve the dilemma of looming redundancy and probable liquidation by rejuvenating value combinations: Variety and efficiency; quality and productivity; and speed and flexibility.

Managers must rethink their preconceived notions of what determines business success and how value is created before re-building hard-won competitive advantages.

In much the same way that one’s car performs more efficiently if it’s regularly serviced and checked out, so businesses can benefit from equivalent attention to ensure they continue to be ‘roadworthy’ and perform at a high level.

However, some managers do little to improve the mechanics of the business because they are oblivious of the fact that they need to. They solider on in blissful ignorance believing that their leadership style is good enough to keep the ball rolling.

 

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The problem is that until companies systematically monitor how they are perceived by their customers, personnel, suppliers and industry counterparts, and get proper feedback they can act upon, they are quite literally operating in the dark and likely heading for bankruptcy.

When it comes to introducing change, many managers appear to possess an ‘anti-body’ that operates to maintain the status quo; the more radical the change, the more resistant management becomes.

Clearly, there has to be some sort of viable investment pay-off in the process of change if organisational inertia is to be overcome.

Here are four ways to stay ahead of the game.

1. Revise your business plan annually. 

Keeping your business plan up-to-date forces you to step back to make sure the big picture still makes sense.

The development of technology has changed the way we conduct business, and will continue to demand that firms adapt to the ever-present shift towards new innovation.

Spend time updating your original strategies with current information.

Your goals may need to be sharpened, your marketing or funding needs may have changed, or you may find that the business’ competitive edge will greatly benefit from new technologies being brought into the current environment.

2. Audit your marketing mix.

The Marketing Mix is a central element of marketing strategy.  The standard marketing mix should consist of 21 marketing divisions:  

  • Product, Price,
  • Place,
  • Promotion,
  • People,
  • Privacy,
  • Personal Interests,
  • Professionalism,
  • Positioning,
  • Planning,
  • Packaging,
  • Practical market experience,
  • Purpose,
  • Physical Evidence,
  • Personal (social) Networks,
  • Public Commentary,
  • Personalisation,
  • Search Engine Optimization,
  • Customer Service
  • and Direct Marketing.

3. Refine your lean Management production practices.

The aim of lean management should be to cut out waste, speed up production, and adopt improved flexibility to guide employees to continuously improve their ability to meet expectations of high quality, cost-effective production practices and on-time delivery.

Lean management affects the company culture, encourages open communication, and promotes seamless adaptation for day-to-day procedures.

Instead of pondering about problems or designing strategic plans in the boardroom, management should encourage employees to share and contribute ideas, and try out new techniques to find practical and effective ways to improve productivity.

Continuous improvement is achieved by breaking down complex projects into smaller solvable components, thus making tasks easily executable.

4. Upgrade workforce skills in job-rotation schemes.

Job-rotation not only ensures that high levels of productivity is maintained in the event of absenteeism, resignations or promotions, but also fills the skills gap by furthering employees’ vocational knowledge and expertise.

Adequate time should be scheduled to thoroughly prepare replacement workers in advance of taking up a position.

Such schemes are often viewed as having the virtue of both meeting the training needs of firms and providing job skills to unskilled or unemployed persons. 

Theresa Lütge-Smith
Theresa Lütge-Smith is a published author, full-time writer, editor and researcher and is passionate about consumerism, branding and entrepreneurial development. She is creative director of the South African Writers' Network and BIZculture which supports SMEs to grow their businesses.