Setting up a startup company is a struggle. You need to find enough funding to ensure that the company takes off along with finding the right resources so it runs smoothly. There are a lot of great startup ideas that don’t translate into entrepreneurial success right away.
You might even reach a point where you no longer have enough finances to keep the business running. It could be because the idea was not well-embraced by many people. It is also possible that your investors are no longer willing to bridge you. Worse, you might suddenly have a competitor attracting all your target customers to their side.
If this happens, the first thing you need to do is stay calm, there is no point in panicking. Money is fluid in any business and this is an issue that can still be fixed. Once your business is running out of money, you still have a few weeks left to recover. Make the most of whatever time you have in your hands. When you are panicking, you might make the wrong decisions and this is going to hurt your business even more. Gather your thoughts, compose yourself and focus on what needs to be done.
Here are a few things you can do when your business starts running out of money:
1. Determine what went wrong
Before you can think about what needs to be done, you have to assess what happened first. Get to the root cause of why you are running out of money at this point in your startup business. You can only decide what would be best for the business if you have assessed all the details.
However, make sure that this process does not turn out to be a blame game. You don’t want to reach a point when feelings get hurt and you get stuck with that. This is not the time to blame, it is the time to make the right moves.
2. Write out your options
Since you are already having a hard time with your business, you can either raise money to pay for the loans and have enough cash on hand, or sell the business. There is no right or wrong direction. It depends on how you assess the situation. If you think you can still find a way to raise money and salvage the business, do it. On the other hand, if you can find interested investors and they have the capacity to turn things around, you better entrust the company to them.
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln
3. Start moving
You only have a small window between now and the day when you fully run out of money to keep the business running, therefore, you need to act quickly. If you want to look for investors, call people. Let them understand your offer. Tell them to make a decision as soon as possible so that you can also entertain other interested parties. If you cannot find investors, you might decide to lay off some employees. This is not the best way to move forward, but it is a cost-cutting measure after all.
4. Don’t act desperate
Yes, you don’t have enough money to run the business the way you would have wanted and you are also running out of time, but this does not mean that you should act desperately. You have to remain professional. When talking to potential investors, don’t show that you are in a panic mode. Instead, show them the benefits of buying your business or investing in it without lying about your current financial status.
You should also negotiate and make deals that are somewhat favorable to you. Don’t immediately close a deal because you feel like you won’t have any other option left if you let go of this one.
Aside from raising money, continue looking for creative means to improve your business. If you have determined that you have low sales, you might want to improve your products. If the problem is that you are not reaching out to a lot of people, rethink your marketing strategies.
This time, you should involve more people on your team. Perhaps, the previous ideas failed because you did not consult a lot of people. You only relied on what you thought was right. It doesn’t work that way for startups. A lot of people have something to contribute to improve the business and you need to trust that they can get things done.
If your target customers were taken away from you by other unexpected competitors, don’t just leave the fight, you have to fight head on. Nonetheless, this does not mean you have to fight dirty. It means you need to find out what their weaknesses are and improve on them so you can have another selling point. Keep researching and understand what the market needs and what the trends are.
“Success is no accident. It is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing or learning to do.” – Pele
6. Integrate other business ideas
Your business might not be doing well right now for several reasons. If you think that it is because you didn’t come up with a great idea, perhaps it is time to integrate other ideas. You can expand your business so you can reach out to more people. You can also start another business that is more profitable so that you can use the said profits to improve the other business. It is just a matter of how you make the most out of this new business idea to improve everything.
What were some things you did when your business ran out of money? Comment below!
The Problem Is Not Your Website Or Your Product.
I spend a lot of my time talking to business owners. They focus on their product, their marketing channels and trying to make more profit.
I met one such business owner who was in the plastic surgery business. Their product (boob jobs and nose jobs) was not working. Their website sucked and people clicked off as soon as they visited it.
People would call their office, get put on hold, listen to the on hold message and hang up.
This business didn’t seem all that special. I’ve talked to many businesses and didn’t think for a microsecond that a plastic surgery clinic could ever teach me anything valuable.
I’ve been to Hollywood on holidays and the issues of body image are all too apparent to me. Anyway, this post is not about body image.
I ended up losing this business as a customer — not that I would ever have sold anything to them if it were up to me. I sat down one afternoon and thought about why we no longer did business with them.
That’s when I realized it’s not about your product or your website. All the issues with this plastic surgery clinic and a lot of other businesses I’ve dealt with stem from one thing. Let me explain in more detail.
Your Google Reviews say you’re an piece of work.
I looked up their Google Reviews and their customers said they were assholes.
They spoke down to clients, they didn’t deliver their clients what they wanted, they argued with their staff in front of customers and they treated people like they were nothing more than a dollar sign.
All I had to do was read their Google reviews to see that the problem wasn’t their product or their website.
Your clients tell you every day that you suck.
I asked the plastic surgery what their clients said.
Many of their clients told them that their services sucked and they would prefer to go to places like Thailand where they could get a better product at a much lower price.
The business owner made the mistake of thinking it was their product that was the problem and that a new website will tell clients a different message.
That wasn’t it.
You abuse your staff and they consistently leave.
I spoke with many staff that worked for this business.
Every single one of them hated the company and were not afraid to say what they thought of the business owner.
The business owner would sit outside on a nice sunny day and look across the street at all the yachts and the people boarding them.
They’d sit there and think that every lead they got was going to take them one step closer to owning their very own yacht.
“If only I could deliver more boob jobs, maybe I could have one of those,” they thought quietly to themselves hoping that no one else could hear how ridiculous this sounded.
I can remember multiple times being on the phone to the business owner and having one of their staff burst into tears halfway through the call.
The first time it happened I didn’t think much. After the third time, I got the message. During the short time I dealt with this business, people consistently left. If you made it to the six-month mark, you were some sort of hero and would probably be given a free surgery to say thank you for your work and make you feel worse about your own body at the same time.
It was free noses and boobs in return for daily abuse.
The problem still wasn’t the website all the product.
You don’t solve real problems; you solve your own problem.
A good business solves a problem.
That problem typically affects human beings and solving it is how you make money in business. Solving problems can start out with a problem that affects you, but at some point, you’ve got to start solving that same problem for other people/businesses.
This owner of this plastic surgery clinic was only trying to solve their own problem which was making more money to buy fancy items like yachts.
Only solving your own problem is not just selfish but bad business.
Good business is solving a big problem or lots of small problems for entire strangers who you don’t know thus doing something valuable for the human race.
Solving only your problem will make you poor.
The problem still wasn’t their website or product.
Creating more problems.
Everything this business owner sold created more problems.
They’d film videos to purposely make people feel like their body wasn’t perfect.
They’d write articles suggesting that everyone needs botox to feel young.
They’d take photos of men and women who were supposed to be perfect so that young people would dream of looking like them.
Not only was their business not solving a real problem; it was also creating more problems every day that it existed.
If your business creates more problems than it solves, you’re in real trouble.You need to take a long hard look at the business and become obsessed with doing everything you can to change it — and do so damn fast to limit the whirlwind of problems you’re creating behind you.
The heart of the problem.
It’s the business owner.
The business I mentioned will fail. That part is certain. The problem with the business is not the website or the product.
The problem is the business has no heart because the business owner has no heart.
You cannot focus on your own selfish desires, create really bad problems in the world, treat other human beings like garbage and expect to go buy a yacht and live happily ever after. It just doesn’t happen like that.
Whether you are a plastic surgery clinic like the one I described or a solo entrepreneur, the problem with your business is you.
Fix the problem of YOU. You can’t get away with being horrible forever.
Being horrible is bad business.
Being respectful, kind and valuable is the final answer to the problem with your business.
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Everyone Wants Sales Leads But No One Wants To Sell
Sales leads are the lifeblood of any business.
Without leads, your business doesn’t make money. That’s why many businesses treat leads like the most valuable resource in existence. Leads are a topic that never goes away and you can never have enough.
Sales leads are the cause of so many disputes in business.
We have it all wrong, though.
Having something to sell is the real answer.
Knowing what you’re selling.
Many companies don’t know what they are selling.
They think they’re selling products or services that magically turn into revenue and light up your accounting software with lots of green, shiny graphs.
Until you know what you’re selling, sales leads won’t help. Getting more sales leads, increasing your Adwords spend, buying more Facebook ads, doing more networking events, printing more t-shirts and producing more ‘content’ for your blog will not help.
You’re not getting enough leads or closing the leads you have because you’re not sure what you’re selling.
Are you selling to humans?
Go and Google ten company websites. Pick any ten.
You’ll notice one thing: more than half the websites don’t sound like they are selling to humans.
There’s no human language, very little content created by the people that work at the company, zero compassion and not a lot of humility.
Most websites are designed to sell to robots that can’t stop looking at their smartphone. That’s not us. We’re human despite our phones changing the way we live.
Humans look for thoughtful businesses.
Humans look for solutions to problems that are not being solved.
Humans like a business to stand for something human.
How you sell matters.
Selling like you’re in the office with The Wolf Of Wall Street Jordan Belfort will not help you sell.
How you sell matters just as much as what you sell.
The process you put a client through has to be simple, thoughtful and in their best interests (not yours).
That last point is crucial. Many businesses exist to serve the board or shareholders, but they do very little to help people like you and I live a better life and do our best work.
The values of your company and what you stand for effect the leads. Before anyone ever becomes a lead in your sales funnel they are a person or a group of persons (a business) with a problem.
Many people never make it into your sales funnel because how you sell what you do is wrong.
Paying for more leads is not nearly as powerful as changing how you sell to the leads you have.
Loving the people who do the selling.
Leads are only half the puzzle.
The bigger question is who is selling to the leads? Does your business treat those people who call your leads well? Do the people who call your leads even care or are they after nothing more than a pay cheque?
These are the unanswered questions that get lost in conversations about why your business needs more leads.
More leads won’t help if your salespeople burn them or don’t know how to convert each lead into a customer that becomes a raving fan and introduces more people (leads) for free.
Treat one lead really well.
I had a sales guy that used to work for me. He treated one lead in Queensland, Australia really well. He spoke to him every day. He knew a lot about the persons family. He even went to the leads barbecue.
That lead was so impressed that he referred several hundred (that we could track) leads to our business. Treating one lead really well is far more powerful than buying more leads who don’t care about what you do.
Digital marketing has become a drug that every business thinks they need.
If only the business world knew the power of one lead.
The good cause factor.
Your business may do something simple like mow lawns.
That may not sound like a life-changing business that can take this lead advice I’m giving onboard. “My business is simple,” you say to me.
Well, I’d challenge that. Any business can have what I call the ‘Good Cause Factor.”
Let be give you an example. The local butcher down the road from me has a BBQ every Saturday afternoon where they invite the community to come and eat some food for free. Everyone is welcome including the few homeless people in the area that never buy any meat from their business.
People stand out the front of that butcher and talk about things that are happening in the community. This Saturday ritual has become a place where business ideas have flourished, homeless issues have been discussed and people who were lonely and possibly suicidal, decided to live for a bit longer.
The last part is the most interesting. In my community here in suburban Melbourne, there is a large group of people that suffer from mental illness. When I went through my own battle with mental illness, I went to the local town hall where people gathered who suffered from the same condition.
It was that event every Wednesday that helped me become a different person.The loneliness and the isolation I felt were cured by the simple act of connecting with other people and having the guts to talk about the demons I was facing.
These same people go to our local butcher on Saturday and eat at the free BBQ. The butcher is thoughtful and they know that they are doing something far more important than selling meat; they’re selling connection to the community, and a possible solution for isolation and loneliness that leads to mental illness.
So back to the point of this post, the community butcher is selling a good cause — an X Factor as some people would call it.
What your business does with its resources to help a worthy cause that affects humans like you and I is just as important as sales funnels, lead generation and your product roadmap.
Link your business to a worthy cause no matter how simple it is.
I lose my mind when people talk about lead quality.
The quality of leads comes down to the quality of people talking to those leads and what you have to offer. Even the coldest lead can buy from you if you know how to find their problem — which they may not know they have — and use your product or service to enhance their life.
Quality of leads is a myth. All leads are equal.
No matter what stage of the sales funnel someone is in, they can be converted by the right business, with the right message and the right intentions to serve rather than take.
More leads are not the answer.
I know you want more leads. We all do.
I’m telling you to think much wider and deeper than that. If all we had to do was get more leads and we’d become the next Bill Gates, we’d be all billionaires.
I could go and set up a business that does nothing more than generate leads and call my business the ‘Billionaire Factory.’ One, two, lead, wham, bam and now you’re rich.
Refine your business down to helping one lead.
Make that lead believe in you.
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