7 Steps to Fix Small Business Revenue Loss

Declining revenue can be tricky business and requires a bit of sleuthing to sort out what is happening. Generally speaking, handling shifting revenues and absorbing losses relates to cash flow management, priorities, strategy, and the internal and external environments of the business.

Don’t despair, there are solutions and decisions that can be made to weather the storm. It may simply be a situation to monitor after doing some research or changes may need to be made on a small to large scale. 

Remember. Change creates growth, it is a natural, innate cycle in business and economies.

I know it can be fearful and worrisome for business owners if revenues do not match expectations. Your first step in addressing the issue is to stop, take a breath, and do your homework. 

Homework means asking questions, getting curious and doing your research. You will be gaining new skills throughout this process and become better acquainted with the reality of your business and the options you have to shift things into forward momentum.

Let’s start with the basics.

What is Revenue?

Revenue means the gross income from the operations of the company. It is the money generated from product and service sales and investments. 

As a side note, capital income is different - it is derived from the sales of assets your company owns, such as commercial buildings, equipment and machinery. Capital income is more predictable, such as deciding to sell your office building or machinery you are no longer using. 

Revenue fluctuates sometimes a bit unpredictably, but there are a lot of mechanisms you can put into place to manage fluctuations and prepare for growth. Utilizing strategic cash flow practices in your business, plus having a good money management system in place will take a load of stress off your plate. 

If you work with an accountant, they will know how to interpret the numbers to date and plan for government taxation disclosures and payments. They can also identify cash flow patterns, the historical numbers that tell a story. 

Then go further. Ask questions. Listen. Your staff has intel whether they know they do or not. Your staff run the front lines of the business and interact with customers. 

Here are 7 Steps to Solve a Revenue Loss Problem

1. Meet with Your Numbers People

Talking with your accountant, business partners and financial managers at your company will provide you with an actual picture of what is happening numerically in the business. Initially, the balance statement and profit and loss statements will give you a current view of what is happening. These statements summarize what is outstanding to pay (payables) and receive (receivables) and what the company is worth (net worth). 

This part can be a struggle for business owners who do not pay attention to cash flows. The numbers tell a story, albeit, not always a fun one. You cannot get a proper picture of your company financially without being prepared to turn over all the rocks and what comes to light. Gathering data and meeting with an accountant or your financial team is the crucial first step. 

2. Meet with your management team

Ask questions - what do they see? If you are a solopreneur, this will most likely be you and your accountant. In a larger business, department heads such as marketing, customer service, human resources, operations and maintenance, and sales will give you insight into how those departments may be affecting revenue growth or decline.

3. Ask Yourself: How do YOU feel about the work you and your teams have been doing?

What have you noticed this past year, did you have a gut feeling something was off but you ignored it because you were busy? 

Look for signs - how is morale? Do people love coming to work, feel challenged and inspired, and care about the work they are doing and the impact it creates? Do you notice boredom, frustration, or complacency? Team issues, lack of training? Have customers been complaining and leaving, have vendors been increasing prices? When did you last raise your product prices, are you still meeting your customers' needs or are the demographics changing?

4. Is your company seasonal? 

Can you tap into off-season opportunities for new revenue streams? Companies in tourism, landscaping and farming will have their revenues affected by different influences such as the weather, which may not be an issue for an all-year operating business.

5. When did you last review your company vision, mission and strategic plan? 

Do you have a strategic plan you routinely assess? A company needs direction and working with data and vision, purpose gives your company life.

6. Do your research on an in-depth scale, such as completing a SWOT or PESTLE analysis 

What has been happening in the market? Local and national politics? Look at global factors such as supply chain issues, and new competitors.

This will tell you where your company is currently positioned in the marketplace and inform you of what areas you can leverage and areas to strengthen or overcome. Some projects may need to be shelved, others fueled with more resources, and innovation to recognize changing customer needs whether you are in the business of B2B or B2C. These frameworks will give you data to work with and inform your strategic plan.

7. Ask yourself how you are

Owning and managing a business takes energy. Have you been taking care of yourself with healthy lifestyle practices and activities that nourish your soul outside of work? Sometimes it can be very difficult to manage change and find solutions if the captain of the ship is running out of steam. Prioritize your well-being. 

Revenue changes are no one’s fault, owner or not. It can be stressful facing numbers that did not meet prior expectations, but it can get sorted out with help. Self-care is a non-negotiable for business owners as leaders of their companies.

It is important to note that running a business can be stressful. If you approach it like watching the stock market - pinning fears and anxiousness on one day or a very short period of time, this will be incredibly stressful and not help you. Declining revenues are due to multiple factors and influences, even when you are a solopreneur. Don’t let self-blame enter the picture.

Watch for patterns in the data, listen to trusted feedback, keep open communication with company departments, and know what is happening in your business. The patterns tell the story. The feedback from your staff and customers tells a story.

Each company is going to have their own revenue challenges and solutions. The more you know about your business, customers, market and employees you will be informed. Information is power and leads to productive decision-making. By following the 7 Steps above you will be in a very good position to make decisions to move forward and decide if you need to bring in outside help.

Don’t spend your time worrying and going in circles, tripping anxiety and sleeplessness. Get the facts, get support and problem-solve. You can do this!

Looking for insight and a methodical, informed approach to solving revenue problems?

Reach out to me today and let’s talk about your business.

I offer a free 30-minute consultation to get you started. Click the link HERE.