There are a host of reasons why a business may be failing: insufficient marketing tactics, a lackluster service, economic or social circumstances (such as COVID-19), or otherwise. Recovering a failing business is an art within itself.
Course-correcting what’s gone wrong takes strong business acumen and experiencing. But beyond just recovery, growing a previously failing business takes true innovation and perspective.
Adam Jacobs both recovered and grew a previously failing business: Bubblegum Casting, a prestigious Australian talent agency. While some entrepreneurs and investors take over failing businesses to make money, the motive was entirely different for Jacobs: his younger sister had been one of Bubblegum Casting’s top stars before she passed away. His decision to purchase Bubblegum Casting was a tribute to her.
However, it wasn’t at all easy. “When I took over the business, its yearly profit was only $28,000,” Jacobs confided. But over time, Jacobs not only fully recovered the business, but grew it into the talent agency empire it is today, which has extended out in a spoked wheel model to several other companies, including a photography studio and another talent agency.
We sat down with Jacobs to learn more about his best tips for transforming a business that’s in dire straits into a profitable force — which may become particularly helpful in today’s current business climate, where company turnover will be high.
1. Depend on your business experience
Going into a failing business, there is one advantage that you’ll have: a third person perspective, rooted in your own business experience. “As much as I’m proud of what I’ve been able to do with a previously failing business, I would never advise anyone without business experience to take over a failing business,” Jacobs warned. Rather, his own background in business development and startups helped him to understand where the business could improve, and what had gone wrong.
Wherever potential improvements are glaring, get to work. Is it in the previous business model? The company’s standing and reputation? When you first take over a business, you’ll have an outsider’s perspective that will quickly dissolve once you get involved and get too close to the operations. Take a full 360 degree review at first.
2. Have a compelling vision of where you want the business to go
“You have to start with a vision of what you want for the business, then work backwards,” Jacobs advised. This is no different than if you had started the business on your own. Every entrepreneur has a clear vision of the business’ ultimate success that helps to steer operations and the initial plan. “Decide what you want from the business, and what it would look like if it fully succeeded and became something even bigger and better than it was before,” recommends Jacobs.
3. Implement systems and processes
Business is really just about implementing the proper systems and processes to get it from point A (where you are currently) to point B (where the vision of the business is). These processes are played out through the daily operations. “With Bubblegum Casting, all it required was the implementation of a few systems, and we generated $28,000 in profit the first month — the exact same amount that it had generated over the course of the entire previous year,” Jacobs confided.
Build out efficient processes that can start bringing money back into the business, and quickly.
4. Look for all potential growth opportunities
Once the business has been recovered, it’s time to grow. For Jacobs and Bubblegum Casting, this meant looking for other opportunities to expand. “Now, we have several offices in the major Australian cities: Melbourne, Sydney, and Brisbane. We have a photography studio, another major talent agency called Hunter Talent, and an online children’s clothing brand called Byron Babies,” Jacobs shared.
Where are the growth opportunities for your business? This could be in partnering or spinoff companies, but it could also be in new offerings that logically align with what your business currently offers. This bolsters your company’s reputation and standing in the public view, and creates new revenue streams.
First things first: get the business back up and running and profitable. But, thinking ahead to a vision with more growth opportunities may be a good first move. From there, you’ll be on the path to recover and grow a failing business like Jacobs did with Bubblegum Casting.