Staring down the end of a bad quarter can be tough for any small business owner. It’s easy to feel the anxiety creep in — is this a sign of a larger downward slide? Or simply a temporary setback?
Quarterly results really provide an opportunity to evaluate where your business is going and make decisions about how you’re doing—they’re not the harbinger of doom. In truth, the results from a single quarter do not make or break a business. Still, if you’re facing concerns over a less-than-stellar quarter, consider it as an opportunity to look a little more closely at your business, and identify where things could be improved.
Here are five actions you can take to help turn a bad quarter into an opportunity for long-term improvement.
Make sure you’re setting clear quarterly objectives
Rather than simply saying, “we wanted to make more money this quarter than last quarter, and we didn’t,” it will be far more helpful to build in quarterly goals and objectives before each quarter begins. Where do you want your increased revenue to come from? Are repeat customers more important than new business? Are marks of customer satisfaction, such as good reviews on Yelp, something that could benefit you long-term? Set some goals that look at factors beyond simply revenue, so you can have positive results to keep your team staying positive, as well as give your business more ways to “win” every quarter than by simply meeting revenue projections.
Focus on your cashflow
Very few business owners enjoy the process of sitting down and reviewing their monthly cash flow. While it can be invigorating and exciting to see sales and revenue increase, it’s critically important to also pay close attention to the money going out. Where are your expenses coming from, and are they being managed efficiently? For example, if you’re on the hook to meet several large obligations all in one quarter, it could put a cramp in your cash flow for that quarter. Look for ways to equalize and streamline your outgoing expenses so that you can predict, as much as possible, how much cash you’ll have on hand each quarter.
Review your business plan and assess milestones
Once you write a business plan, and get the business up and running, it’s easy to put it in a drawer and forget about it. But that plan becomes particularly helpful in times of uncertainty, including after a quarter that didn’t meet expectations. It’s a good time to take your plan out of hiding, review it, see the larger goals that you’d set, and assess how far you’ve come — as well as how far you have left to go. Did you make your first $500,000 in revenue earlier than anticipated? If so, this is a reason to celebrate. Paying attention to what’s going right can give you and your team the morale and uplift you need to bounce right back from a rough quarter.
Take smaller actions rather than large ones
It’s common for business owners to react to a bad quarter by making a drastic change, such as cutting a product or changing suppliers. But these factors rarely cause a poor-performing quarter. Long-term thinking is better for your business, so quarterly numbers call for tweaking plans, not necessarily drastically overhauling your entire business. A drastic knee-jerk reaction may even create bigger problems down the line. For example, if you change suppliers after ar ough quarter, and then find the new supplier’s materials aren’t up to standards, it could be months before you can rectify the problem, meaning more time and resources lost. Instead, focus on some quick wins you and your team can create, to turn around morale and create momentum. Can you throw a sale or weekend-long special that will bring in new customers? Generate a Twitter campaign to create new leads? It’s often better to go small before you go big.
Your staff is usually not the cause of your bad quarter, but they can be heavily affected by it. Rather than keep the bad news to yourself, opt for honesty about the disappointing quarter, and then take measures to involve them in turning things around. Giving employees a sense of purpose, particularly when it has personal incentives like performance bonuses, is one of the best ways to ensure that your team gets back to a humming, high-performing, and positive-thinking state. Create a contest to see who can bring in the most new business next quarter, or who can serve the most customers. Make it a game — why not give the game some structure and let your employees win?
No one expects to feel good after a bad quarter. Nevertheless, you have an opportunity to either learn and grow from it, or let it sink you. Follow these five guidelines and you’ll see your recovery start sooner, and blossom larger.