If you have tried to start a business, only to have it fail, this can be a huge disappointment, and many people need some time off to get their finances in order and to re-group. However, once the initial shock wears off it's time to start making some big decisions, and with eight out of ten businesses failing within 18 months, there are a lot of people out there who will be wondering where to go next. Here are a few things you'll need to consider if you want to resurrect your business, so you can figure out whether it's a solid plan.
What's the real reason your business failed?
Simply “not making enough sales”, or “losing a major client” isn't enough of an explanation for why your business failed; you also need to look behind the reasons that this happened.
- Not having sufficient cashflow
- Inefficient production methods
- Wrong location
- Lack of investment in sales and marketing
- Growing too fast
While looking at accounts and reports can be important, it's also essential to seek the right advice, and many people have a mentor or other expert on hand who will have no doubt worked in different businesses and will have a wealth of useful information for you. They will be able to identify not only what went wrong, but how you can identify these problems in future and work through them.
Rebranding and a fresh start
For a fresh start, rebranding can really help a business, and if it has failed in the past then this can help you put the bad times behind you. This can be on a small scale, for example by getting a new logo, or you could arrange for an office fit out and a whole new look to get you in the right frame of mind to restart operations. Rebranding a failed business can sometimes help as it means:
- You can reach out to old customers with a new campaign
- There are no negative associations with the old name and brand
- It means a new strategy and ways of doing things
- You can reflect changes in the products or services you offer
A professional rebrand can often help you to move forward with your business, and shows that you have learned lessons from your past endeavours and are looking for new markets.
If you have had a business that has gone bankrupt, then it's essential that you check the conditions of your bankruptcy agreement or other debt plans to see if you are allowed to start a new business. For example, directors who have been disqualified can be banned from acting as a director for a certain period, or even for managing or promoting a firm, and so you'll need to be sure that your new business isn't breaking any laws.
Getting new employees in
An injection of fresh talent can be just what your new company might need, but beware of hiring too many people early on. Decide where your priorities lie as you start up your new business, and make sure you hire people who have worked with fledgling firms in the past, as they will have the kind of skills needed to build things up again.
Will you get financing?
A big consideration for those who have owned failed business ventures is their finances. Having the experience of running a company obviously works in your favour when it comes to business finances, but the way things wound up will need to be discussed. If you were able to walk away without any debts, or have since paid them off, then it may be easier to get financing, so staying on good terms with your bank is a good idea.
Re-starting a business that has previously failed is a lot different to starting from scratch, but in some ways it can be easier. You have already made mistakes in the business world, and this is the time to put them right. If you decide to bring your business back then it's a good idea to take a long, honest look at what happened before, with someone giving an objective opinion if possible, and to work on things from there. This will allow you to move forward and once again take on the business world.
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