Most business founders understand the “grow or die” mantra and work tirelessly to make sure the current month is doing better than the previous month—and the same goes for quarter-over-quarter growth and year-over-year growth. The need to grow and thrive is keenly understood by those who run small businesses and nobody likes the idea of watching sales or revenue slump.
Nevertheless, saying that, and working toward the goal of consistent growth and improvement is no guarantee a business will see subsequent growth every quarter. And, although it’s critically important to regularly be mindful and aware of the numbers, what they are really providing you is a monthly, quarterly, or annual report card to help you make decisions today that will positively impact your business tomorrow. Additionally, it’s important to balance long-term goals with short-term results, in other words, a less-than-perfect quarter doesn’t necessarily spell disaster for your business, provided you take advantage of the learning opportunity.
If you’re coming of a difficult quarter, here are some things you can do to bounce back and help turn that bad quarter into an opportunity for long-term success.
Set Specific, and Measurable Objectives
It might not be good enough to simply say, “We want to make more money this quarter than last quarter.” It’s likely much more helpful to identify specific and measurable goals and objectives before the quarter begins. This is something large companies do; and small businesses can learn from the practice of their bigger colleagues.
It might make sense to consider your revenue goals and determine where you will focus to meet those increased revenue goals. For example, will your focus be on finding new customers, or will you launch an effort to increase the average amount your current customers regularly buy?
Is it possible that focusing on improving your average review on Yelp! and other review sites make sense? It might be advantageous to set some goals that look at other factors beyond simply focusing on sales or revenue. In addition to helping you take a longer view of your business objectives, it gives you, and your employees, additional opportunities to “win” every quarter beyond the important measurement of whether or not you hit your sales number—which is good for morale as you shoot for your larger revenue goals.
Laser Focus on Cash Flow
If you’re not an accountant or a bookkeeper, going through the process of reviewing your monthly cash flow or other financial reports might not be on the top of the list of things you look forward to doing each month. However it can be invigorating and exciting to see sales and revenue increase. It’s also important to pay close attention to the money going out—where are your expenses coming from, how much are they, are they being managed efficiently?
For example, if you anticipate several large financial obligations in any particular quarter, it can really put a cramp in your cash flow if you’re not prepared.
Look for ways to equalize your outgoing expenses to make it easier to predict how much cash you’ll have on hand every quarter. A lack of adequate cash flow has closed the doors of many businesses with a lot of customers, impressive revenues, and an otherwise strong growth trajectory. There’s a reason many small business owners say, “Cash flow is king.”
Don’t Put Your Business Plan in a Drawer and Forget It
A lot of new business owners sit down to write a business plan when they first begin thinking about starting a business, it helps them codify what they want to do and determine whether or not they have the resources to be successful. It’s also something often required by a traditional lender like the bank when applying for a small business loan—but if those are the only times you consider a business plan valuable, you’d be mistaken.
A thoughtful business plan should be regularly reviewed and updated. Your business plan is a great tool to help you stay focused on your core objectives and becomes particularly helpful in times of uncertainty, including a lackluster quarter. An up-to-date business plan at your fingertips will remind you of your larger goals and give you the opportunity to assess your progress—as well as show you how far you have yet to go.
There are numerous software tools available today that provide an easy and straightforward way to create a useful business plan to help you meet your goals and there are organizations like SCORE that have mentors willing to help you walk through the process.
Don’t Forget, Sometimes Smaller, Incremental, Improvements Offer Powerful Impact
It’s probably natural to react to a bad quarter by making drastic changes to hopefully make a big impact, but it might better serve you to take a longer view and consider bad quarterly results as an opportunity to tweak what you’re doing rather than inspire an overhaul.
In fact, a drastic knee-jerk reaction may even create bigger problems down the line. For example, if you change suppliers after a rough quarter, and then find the new supplier’s materials aren’t up to snuff, it could be months before you can rectify the problem—meaning more time and resources lost.
Instead, focus on 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? Remember, sometimes it’s better to go small before you go big—never forget that small, incremental changes can make a huge impact on the bottom line.
Don’t Forget Your Employees
Your employees aren’t usually the cause of a bad quarter, but they can be affected by it. Although some business owners try to keep the bad news to themselves, it can be a better strategy to be transparent while taking measures to turn things around. What’s more, your employees might even have some suggestions that will help with the challenge.
Empowering your employees with a sense of purpose is one of the best ways to keep your business a humming, high-performing, and positive-thinking team. You can also incentivize the team by offering a spiff or bonus to see who can bring in the most new customers or who does the best cross selling of add-on items for the month. Think in terms of those things that will help your bottom line. Make it a game—and give the game some structure that will enable outstanding employees to win.
Nobody likes to experience a lackluster quarter, but the end of each quarter (whether good or bad) is an opportunity to learn and improve. Ignoring those lessons won’t help you grow and might even sink the ship. The above five suggestions will help you recover quickly from a misstep.