Many business owners find themselves in a state of crisis at some point in their journey where they have to contemplate whether or not their business can be saved. One of the hardest aspects of saving a struggling business is being able to remove yourself from the emotional process in order to see the reality of things with a clear focus.

If you’ve found yourself and your private practice in this situation, here are six steps to help you come out the other side.

 

#1. Business leaders provide calm leadership, not escalating anxiety.

This seems obvious enough in theory but the practice is harder. If you are the owner of a distressed practice then your job is to keep the team calm and focused. The natural tendency to pass on your fear and panic has to be stemmed. If your team take on your fear then inevitably their own anxiety will rise. That will open the way to fears about job security, poor work performance and generally it will make an already bad situation much worse. This anxiety may push them to jump ship which could be the last thing your practice needs while navigating through its challenges.

This isn’t about painting an artificially positive picture of how things are. Rather, it is about giving your team confidence that while things are tough, you have a plan and the skills and you’re going to get everyone through it so long as they all pull together. Be a leader now more than ever.

 

#2. Keep your mind open to all possibilities.

You might think you know exactly where things are going wrong. You might think you can pinpoint the precise moment in time or particular decision in which the boat started taking on water. Chances are you might be right but remember you’re under pressure and things are running against you at the moment. This is not the time to lean on what you think you might know about how things turned bad.

What is essential in saving a struggling business is that you move yourself to a space where you can think and see clearly where the problems might be. Put aside the ego for now and really review the way your practice is operating and get to the heart of the problem.

When you see the problem as being something overarching like “low appointment volume”, it will seem almost impossible to come up with a solution for that. This is because what you have actually identified is one umbrella problem under which there are many smaller problems. When you more deeply and objectively analyse the situation, you might well come to see that appointment volume is low – particularly your GP referrals. That is a much more specific problem you can tackle.

 

#3. Focus on cash flow planning.

Cash flow planning is critical in any business but especially when there isn’t enough to go around. This task isn’t difficult but you may want to brace yourself in case things are a bit worse than you’ve been telling yourself so far. Plan the next 6 months of cash flow and do it now. Do it thoroughly and accurately and look for the weak points.

Cash flow planning needs to be as accurate as possible given what you know about forecast appointment volumes, contractor costs, admin costs, rent, etc. If this isn’t your area of expertise then get someone who knows what they’re doing to help you out. Cash flow planning to turn around a struggling business needs to be as conservative as possible and so it means a clear head and following a process are essential.

 

#4. Cut unnecessary costs.

Having done the cash flow, you will now have some idea of where you are cost heavy and it’s time to stop procrastinating about this. Look at ways to reduce your weekly and monthly outgoings. Consider everything as a possibility – can you offload any non-essential expenses?

It is also during this step that you carefully consider which team members are essential in the next 12 months. Are some willing to move to part-time instead of full-time?

Cost cutting isn’t easy but it really should be a regular part of the cycle even in a healthy business. Remember the goal is to survive and come out stronger for it.

 

#5. Prioritise payments.

During the cash flow and the cost cutting exercise, you need to make a priority list for creditor payments. Any bill that if left unpaid will shut down the business needs to be dealt with first. You may not be able to pay them all but we will deal with that in the next step. For now, making a list of the priority payments is critical.

 

#6. Communicate with your creditors.

With your list of priority payments in hand, it’s time to communicate the situation with your creditors. Perhaps not the full depth of the problem, but letting them know that things are tough and that you need their support and understanding will actually help in most cases. Your creditors have an interest in seeing you survive. You are a customer for them and in the long run, if they can give you time or a payment arrangement then it will work out for both parties.

Importantly, it is always a good idea to communicate with your bank if you owe them money and you’re feeling the strain, while understanding that a bank is unlikely to just let you out of an arrangement. Advising a commercial lender that your business loan repayment is going to be late is also the responsible thing to do and they will work with you to a point. It’s a good idea to get some in-depth advice about how to handle this stage.

 

Overall it’s important to remember that saving a struggling private practice, much like any other fight for survival, is absolutely dependant on your ability to resist panic and impulsivity. But also keep in mind that fresh thinking is your secret weapon here. As the old saying reminds us, “we can’t solve any problem with the same level of thinking that created it.”