How to Turn Around a Failing Business

What I am going to share with you is what I learned from these experiences that led me to write a book called Small Business Turnaround, published by Adams Media.

The reason I am writing this column is because all business leaders go from hero to clown if they manage for any length of time. If your company is being rocked by storms, here are 10 steps to take so you can safely land on the beach.

1. Trim the fat. Take all of the company's expenses and create a spreadsheet to show how you are spending your money. Determine what you absolutely don't need -- then get rid of it. When I ran the magazines, I found out that we spent $5,000 in magazine subscriptions for 30 people. I reduced that to $250. The magazine used heavy paper like Business 2.0; I reduced it to Time magazine thickness, which saved $100,000 a year.

2. Get the word out. Develop a new business plan and give copies to everyone in the company. I mean everyone: from the janitor to the top leadership. Ask for their thoughts in writing. People want to know they have some control over their own destinies, so allowing them to provide input is important. One of our janitors in the mall I was running came up with an idea that saved us more than $100,000, and for a $2 million business, that was significant.

3. Cull your workforce. Make a list of the people you want to keep, and immediately let go of those who don't fit. A common mistake is to let people go in waves. When you do that, the best people leave because they don't want to be the last person in a game of musical chairs, and the worst people stay because they are either complacent or have no confidence that anyone else would want them. Every time I had to let people go, I assessed their skills and capabilities and contacted business associates to see if I could arrange an interview. You can't imagine what an enormous difference this makes to how employees perceive management.

4. Open the books. Anyone could see any financial information, except other people's salaries. I used to have a standing companywide meeting every Friday where I discussed our financial picture. One day, one of the employees stood up and said they all trusted me and that their time was better served improving and selling the product. Not only did this create great trust, but employees started recruiting other quality people.