Amira’s story didn’t end there. She was determined to prove everyone wrong. She wasn’t going to give up her dream without a fight.
She asked for help from her friends and family. Not financial help, but ideas. How can she turn things around? It couldn’t get any worse.
Let’s remind ourselves of her situation….
- She has had to sell her stock and future income from credit sales to pay off her investors.
- She has a shrinking customer base and a damaged reputation.
- The business exists but she has no materials to make her product and no money to pay staff.
- Investors won’t even talk to her after what happened the last time.
- She has to pay her remaining staff wages or make them redundant.
- She has to pay for the lease of her production facility and storage, or face high default charges.
On the plus side…..
- She still has her truck, equipment and machinery.
- Many of her customers still want her products.
- Her ideas and ambition are still as strong as ever.
- She has a very supportive family, who will support her anyway they can, even though they have no money.
So, she thinks about the lessons she has learned……
- I recognize that I must rely on others to make a successful business. I will not try to do everything myself. I will not try to make every significant decision. I will hire skilled people and trust them to make good decisions.
- Expanding too quickly can be difficult. This time I will make longer term plans. I’ll develop a strategy for success and carry it out carefully and cautiously.
- Business tools are helpful. Budgets are there to make sure I don’t spend more than I have, ignoring the plan can lead to disaster. Best to make a new plan when circumstances change.
- Finding investors who are after a quick return in the short-term is quite easy, but they might not stand by me if things start to go wrong. Maybe I can get investors to invest in my long-term vision for the business with the promise of much greater returns in the long-term.Maybe I should try and secure several different investors rather than putting all my trust in one type of investor.
- I disappointed many of my former customers. Without them, my business is nothing. I should go back to them and find out what they would like from me.
- I will stop designing only items that please me, and find out what the market really wants and provide it in a way that truly shows respect for their wishes.
Her plan has three key components
1. Stop the rot. Get the business back trading again.
- Make new cash sales and find a way to source the products. Just like in the early days. Buy for X and sell for X plus 50%.
- That will bring in some much-needed cash.
- It will also show her customers that the business is alive
- The income will pay for the facility lease and staff wages.
- Once all bills are paid, start to invest again in materials for later production.
- Get some customers to commit to future orders – these can be shown to investors as proof of future profits.
2. Develop the brand and a long-term business strategy and seek out different types of investors.
- Convince the bank that the business is still viable and get short-term financing (overdraft or loan secured against the future orders).
- Use crowd funding to get many small investments from people interested in the brand – perhaps by offering discounts on future purchases.
- Find a long-term equity partner – someone with business experience who is prepared to stay with the business for the long term and who will provide advice and guidance when things get difficult.
3. As soon as there is enough money, employ staff to manage specific areas and delegate full authority to them to make day to day decisions.
- Operations to manage production and quality.
- Marketing to manage sales strategy, advertising, and communications.
- Finance to manage accounting, tax, and legal issues.
- Appoint self as Chief Executive Officer (CEO) and focus on strategic decisions and fundamental questions of direction, business culture, and customer focus.
So what happened next………?
You write the story from this point on. What would you do?
For More Resources:
- Maximizing your income and profit
- Cash forecasting
- Controlling costs
- Turn sales lead into purchases with a lead scoring tool
- How to finance your business
- 6 alternative financing models you may not have thought about
- Checklist for delegating effectively
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