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How to turn a business around
I just bought a well-established, well-known brand in Ireland. Though the company has been around for 40 years, for various reasons it is no longer making a profit and turnover has collapsed. However, in my opinion, the brand still has value. How can I capitalise on this while I’m trying to increase turnover in order to pay the creditors?
Anna Keely, Dublin
The appeal of taking over a company is that it already has an established customer base, and the new owners usually see opportunities for innovation and expansion. In your situation, Anna, you’ll need to look at the reasons the business faltered, and decide what its assets are in addition to the brand name and whether you can salvage them.
Here are four common problems entrepreneurs and managers encounter at established companies, and how to start turning things around:
1. The company offers a brand name rather than value
A business’ long history is meaningless if it doesn’t provide the best-designed, most reliable products or services at competitive prices and back up those offerings with the finest customer service. In these fast-moving times, longevity is more the exception than the rule.
According to a 2012 study by Richard N Foster of Yale University, the average life span of a company listed in the Standard & Poor’s 500 index has decreased to just 18 years, from 61 years in 1958.