Put aside any feelings of guilt when you buy a failed business. The results of an economic downturn often see businesses go from one pair of hands into another. You can’t afford to let guilt get the best of you, whether it’s simply because you have a special attachment to that business or because you found it at the right price; you have to immediately take action to get the profit margin to turn around.
Why Buy a Failed Business
As a result of the world economic crisis, many businesses have found themselves in financial straights, owing creditors too much as well as being over-leveraged. It’s important to remember that this doesn’t mean these are necessarily bad businesses; in fact, under normal circumstances they would be working at optimum performance, if they could pay off outstanding debt. This represents an opportunity for people like you who have the cash and guts to build an otherwise sound business back up.
Analyze the Four P’s
Before opening the business doors again, analyze the four P’s: Product, Placement, Promotion and Price. Evaluate other similar products or services on the market and how competitors are managing these areas in the marketplace. Change the way the product or service was marketed according to these needs.
Know What to Expect
One of the most important aspects of buying a failed business is knowing what to expect. Even if a business was doing well at some point in the past, you can’t realistically expect to jump back in at the same point, at least not right off the bat. Customers will often have found another provider. Besides, you must account for whatever the ending reputation of the closed business was, which could be good or bad.
At any rate, one of your first steps should be to build the business reputation back up. Start by posting signs saying “Under New Management” for general public to see, as well as posting a similar statement on the online website. Place these on doors, in news papers, local publications and even in radio advertisements if you like.
You also need to pay attention to the business’s online reputation. Search the business name on a search engine like Google to see if there are any negative comments. However, even if there is no negative online information about the business you might want to consider getting immediate online reputation help and build up the business reputation and branding of the company from the ground up. Most people will refer to the internet when looking for a business service before looking in any other media, and you want to make sure your company’s new look is noticed.
Getting Customers Back
Once you implement a reliable online reputation management process and adjust your product availability and service according to market needs, you need to contact the business’ previous customers. Write emails, send out letters, and even contact them over the phone to thank them for their patronage and to inform them of the new administrative changes.
The most important aspect of restarting a failed business is to look at the overall business with new eyes, add a new perspective, change the way things were done and create a new interest in the existing business.
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