Every Small Business Needs An Abandon Ship Strategy
Although small business is the sector that is the most exciting, it’s also the most volatile. The shocking fact that around 50% of small businesses fail before they make it past the 5-year mark should be alarming. Some even say that it could be higher and be verging 8/10 collapsing within the half a decade threshold. Why this happens to be the number of years for the survivability test, there is no one reason. Regardless of what factors may contribute to the demise of a business, it’s imperative that every small business owner have a nuclear option. Moreover, a strategy which is in place in case of full-blown disaster will actually ensure you have another crack of the whip in the near future. The key is the save as much as you possibly can in the way of revenue. Making a profit instead of huge losses means you can have enough funds to regroup and possibly try again while avoiding the mistakes your previously made.
Be willing to swallow your pride
You need to think fast and save yourself from imminent danger when the walls around your are collapsing. Being overcome with emotion is the last thing you need as it will hinder your ability not just to think straight but to act fast. Don’t hang onto sentimental value when you need to jump into the lifeboat. If you were in direct competition with another business, it’s no skin off your back to reach out to them and see if you can be bought out. The aim is to somehow turn a profit from a loss by either merging your entire business with your rival or just simply selling the ownership rights off. It’s key here to try and act quickly before you have to lay off staff. Having a functioning business is going to be more attractive than just buying out the bare bones with no one to move the working parts. It’s never easy when you have to swallow your pride and give away something you have worked extremely hard for. But do not cloud your judgement and keep this option open. However, it is best to utilize this strategy early on before the business starts disintegrating.
Sell majority of the stocks
Say if you still want to keep a hold of your business but perhaps not be the owner, selling the majority of the stocks is the best way forward. You can go one of two ways. Selling the stocks purely to a private investor will simplify things not just in the process of procurement but in the future management of the business as well. This incurs the need to find an investor quickly and leaves you with fewer options at the negotiating table. However, with a software that performs automated trading, you can sell your stocks to the public at the optimum time and also gain an understanding of what kind of price you can set.
When you know collapse is imminent, you need to put yourself in full salvage mode. Save as much of your own money and the business’ revenue as possible. Look for a way out no matter how distressing it may be.