Ruta Gabalis, CEO at AeroBlue, is a business turnaround expert meaning she can find the root of your business’ problem and find a way to fix it. Usually however, there are five standard reasons businesses don’t make the cut.
Last year’s Black Friday sales were almost a non-event on the high street. Compared to the videos of crowds waiting outside shops in the early hours to get their hands on the first deals, retailers last year saw very little change in footfall to a usual weekend. The new year is always a quiet time for the restaurant industry, but it is growing increasingly clear that after the Christmas rush, many chains are feeling the pinch.
Although we are only at the start of 2018, a number of major high street names have announced closures. Almost 100 Prezzo restaurants will soon shut down, along with a number of their sister restaurants, ChimiChanga. Even having a major name attached to a restaurant hasn’t managed to salvage some businesses, with a number of Jamie’s Italian restaurants set to close and his steak restaurant Barbecoa going into administration. In retail, Toys R Us has recently announced its collapse while staff at stores including New Look, Marks and Spencer and Morrisons, amongst others, will soon face unemployment.
The failings of these big household names leave consumers and business experts alike querying what went wrong. It can also be unnerving for comparatively smaller, independent businesses to know that if chains like Prezzo are struggling, how are they expected to cope and what shortcomings should owners be aware of?
Ruta Gabalis, CEO of AeroBlue, is a business turnaround expert. By finding the root of businesses’ problems, she is then able to find ways to fix it. Here, Gabalis offers five reasons why businesses failed in 2017.
1. Incorrect locations
Unfortunately, high rent prices in England are driving out many big businesses. Jamie Oliver’s steak restaurant, Babecoa, fell into administration after just one year. New Look also faces a number of closures in order to use the money saved on rent elsewhere. Restaurants often fail in locations which either receive little footfall or sit in overcrowded areas. In such a competitive market, businesses need to stand out and offer a unique service and choosing the wrong location can be hugely detrimental.
2. Failing to keep up to date with customer demand
Failure to remain relevant and in line with what your customers want sets your business up for failure and stops once loyal customers from returning. Utilising social media will allow you to access feedback and view customers reviews quickly and in real time, allowing you make the necessary changes while being aware of your target audience.
3. Sticking your head in the sand
It is important to have some grasp or understanding of the administration and finances of your businesses so that you can identify where there are problems. All too often, owners will employ accountants and outsource certain financial tasks so may not be fully aware of what is going on at all times. If you are making rough estimates of what is coming in and what is going out, you will continue to leak cash and make the same mistakes. It is equally important that if red flags are spotted indicating the company is on the down-turn, enlist the help of a professional, don’t keep putting it off.
4. Poor marketing
In this day and age, it is essential to utilise all social media and print platforms to market your business, even if you have to outsource help to do so. Successful marketing gives your business the image it needs and appeals to your target audience. Poor marketing leads to business failure when people don’t understand what your business is about or does or when a business feels inaccessible.
5. Poor leadership
Business is full of leadership, from the CEO to floor managers. Poor leadership from above filters down and not only harms morale but profit. No one can keep on top of everything, so the collaborative culture within a business is vital. Employing people better than you can be scary but if you can put your ego aside, it might just save your business.