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Have you ever struggled in business? Almost every entrepreneur has at some time or other – and it really sucks! As entrepreneurs, we take the risk of going against the grain, being different to the masses and following our dreams. Yet for most of us, this decision only results in pain, both financial and emotional. At times, it seems that the entire universe is conspiring against us.
I know I’ve been there.
When I decided to open up a pizza restaurant a few years ago, one of the most stupid decisions I ever made (a decision that was driven purely by my ego and greed) we struggled to get customers in the door. We seemed to be working so hard to pay the rent and to pay our staff, only to have very little for me and my business partner to live off. It was a terrible time.
So what did we decide to do when times were tough? We decided to cut prices by 10% thinking that would do the trick. And what did that do? That just dropped revenue by 10%. So now we were struggling even more – it became all too much for my business partner who one day stole the remaining $20,000 I loaned to the business and skipped town, leaving me to face the firing line.. This was not a happy time at all but one in which I learned several lessons.
As entrepreneurs and business owners, the majority of us believe that if we drop our prices, everything will be ok – yet, this is rarely a sustainable way of doing business, especially since our original prices are often not that high to begin with.
The main reason we think that lowering prices is a solution is because even though we are business owners, entrepreneurs and producers of products and services, we think like consumers. You see, as consumers we are often conditioned to look for the lowest price so many entrepreneurs sadly think lowering prices is the way to line their pockets.
Here’s the truth – lowering prices will NEVER make any long term positive difference to your business, especially if not enough people know about your product or service in the first place. That was the case with my pizza store. I opened it up in a small country town with a tiny population thinking that my business partner and I could grow this into the next big multinational pizza franchise. I’m not sure exactly where my head was at, but it certainly wasn’t anywhere intelligent – that’s for sure. Opening up the restaurant in a bad location placed at a disadvantage to start off with and then lowering prices only killed us off completely.
So how can you turn around a struggling business? There are only two ways – you need to sell and educate your way out of a hole! That’s it – these are the only two ways to get off struggle street. For example, if you have a great product but you can’t sell enough, don’t lower your price – instead look at your marketing. What can you do differently?
One of the key things to ask yourself as well is whether there is actually a market for what you have to sell. Most of us go into business thinking we have this great product or service that people need. Yet, rarely do people buy what we think they need – instead they buy what they want. So when you’re going into business or if you have already started a business that is struggling (like my pizza shop), do some research to confirm there is a market for what you have to sell. Then get some education about how you can tap into that market.
Invest in your most valuable asset which is your mind and your thinking. It is often said that to earn more, we must first learn more – and that is never truer than in business. The successful entrepreneurs and business owners really do think differently and it is their thinking that ultimately makes all the difference.
What are your thoughts? How would you turn a business around? I’d love to hear from you so please leave me a comment below and then please share this article on twitter and facebook.
To your success,
Niro
“Niro’s pizzaria…you’ll be motivated to buy our pizzas or we won’t take any money from you!”
GREAT story Champ! Highlights the passion that most entrepreneurs have when thinking about an idea…yet lack the knowledge and sometimes wisdom to channel their thinking into real money making initiatives.
How would I turn a business around? I’d start with benchmarking where the business is at vs where it should be in its industry and look at developing marketing initiatives…that don’t necessarily have to cost a lot of money. With the increase in sales I would use the capital to invest in more systems that would help achieve business goals.
Great post!
AJ~
This is a good post, I stumbled across your article while looking for some random stuff. Thanks for sharing, I’ll be sure to return regularly.
AJ, thank you for the great comment. The more successful entrepreneurs we have in society, the better off we will be – and to do that starts with changing the way we think. Your suggestion about how to turn a business around is awesome.
thanks, Niro
Hey Niro – great article!
Have heard many times now that business is 2 things: marketing and innovation. Seems to be in line with what you’re saying – just different language.
Didn’t know you knew anything about making pizza!
Adrian
Hey Adrian, marketing and innovation are indeed two of the keys to business. Yet, it’s something so many of us struggle with. Thank you for your comment.
Cheers, Niro