Everything you need to know about insurance basics, like coverage types, limits, cost and more.
Getting Your Struggling Business Back on Track
4 steps to recover from financial struggles and get back on track.
Today, business is booming for Company Folders Inc., a nationally renowned custom folder publishing firm in Keego Harbor, Michigan. But that wasn’t always the case.
In March 2012, the company was teetering on the brink of bankruptcy.
“Our entire marketing plan was based on driving traffic from Google to our site,” says owner Vladimir Gendelman. Then the company was penalized by Google for using over-optimized links. “We lost 74 percent of traffic and were nearly wiped off the face of the Internet,” he says.
Within six months, revenues plummeted 50 percent.
But it took swift action, planning and resolve to turn the company around and enjoy the success it is experiencing today.
Following are the steps that Company Folders and thousands of other businesses have taken to make a comeback from financial dire straits.
Seek counsel. Gendelman didn’t take the option of bankruptcy lightly, and consulted with a bankruptcy attorney, who offered different options. “I could stop the operation and the debt would be forgiven, or we could restructure and shave off the debt and start new,” Gendelman notes.
Increase cash flow. Without cash, your business can’t operate. Gendelman got funding from a bank line of credit, as well as a generous sum of money from friends and family.
“When things are good, open a large credit line, keep it in good standing and go back to the bank every 6 to 12 months to have a conversation about raising the credit line,” Gendelman advises.
While it may cost you money to keep the line of credit open, you have a totally different position when you have money backing you, he says.
Rely on your team. “We talked about our issues, brainstormed ideas, and figured out how to be a meaningful company to our B2B clients and core roster of designers,” says Gendelman.
That meant investing in educational resources for team members and never missing a payroll.
Re-establish your brand. “The most important thing is to stop what you’re doing and start doing something else,” says Gendelman. First they identified that their core client was graphic designers who put folders together for other companies. Company Folders would help them do their job better and more efficiently by starting a blog that offered tricks, tutorials and informative articles. They also launched a folder design gallery showcasing the work of designers around the world and creating folder design templates that would save them time on a job.
“A lot of these things were super expensive, but it was the right thing,” he says.
Since then, revenues have increased by 128 percent from 2011 to 2014, and Company Folders made the Inc. 5000 2015 list, a grouping of the fastest-growing private companies in the United States.
Company Folders’ experience proves that no matter how challenging times may be for a small business, there are lessons to learn and actions that can spark a turnaround.
“The biggest lesson for me was to diversify,” says Gendelman. “Now that we have multiple streams of income through marketing, if something happens, it would be bad, but not devastating.”
Related Topics: Business Growth , Finance