As a small business owner or entrepreneur, you’ve likely run into your share of naysayers. “Hope you enjoy working 80-hour weeks…”, “You know most businesses fail in the first 5 years…” The list goes on.
As such, when you do encounter some tenuous times, it may be easy to let your mind wander. There may be voices saying that the end is near. Take heart.
Some of the most household names in the business world–Apple, Ford, Netflix, Starbucks–encountered that same moment themselves. With bold leadership, strategic vision, and cash flow discipline, they were able to quickly abate a financial decline. Keep reading for more insight on how you can do the same.
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Apple: Trusting Visionary Leadership
Apple reached a market capitalization of $2 trillion in 2020. The first company ever to do so. But there was a time when their solvency was much in doubt.
Caught up in the computer boom of the late 90’s, Apple was quickly losing market share to Windows. Its attempts to regain customers by launching new product lines only led to confusion. A string of poor management decisions almost led to the modern-day juggernaut’s bankruptcy in 1997.
Saving Stroke: The company brought back CEO Steve Jobs. He quickly simplified the product line and cut waste. He secured a key investment from Microsoft to help launch the breakthrough iMac, paving the way for the iPod and iPhone era.
Ford Motor Company: Surviving An Industry-Wide Malaise
There are few brands that transcend product lines quite like Ford.
Even born-and-bred city dwellers can’t help but envision a pickup truck on a dusty road when they hear the name “Ford” whispered.
But even this stalwart brand wasn’t immune to far-reaching market hardships. In the mid-2000’s, declining auto sales and high labor costs created unprecedented challenges for the seemingly untouchable automotive industry. When the 2008 financial crisis struck, Ford seemed destined to follow its rival GMC into bankruptcy.
Saving Stroke: Ford mortgaged nearly all company assets to secure $23 billion in liquidity. This bold move gave Ford enough cash on hand to keep its head above water until the bad market conditions corrected.
Netflix: Pivoting Quickly To Avoid Crisis
Netflix is the modern-day synonym for a quiet night in. Chilling, if you will.
But for those of us old enough to remember its days as a mail-in DVD provider (fun fact: it actually did keep mailing DVDs until 2023), the company narrowly dodged catastrophe. And Gen Z’s favorite euphemism would have never come into existence.
In 2011, the company attempted to brand its DVD service as “Qwikster” and keep Netflix as its digital content platform. The move would require subscribers to create two different accounts (and receive different bills) from each platform.
The backlash was swift and significant. Some 800,000 subscribers defected. The company’s shares dropped by 75%. Licensing costs went through the roof.
Saving Stroke: The company slowed investment in its DVD segment and zeroed in its focus on original content creation. Shows such as “House of Cards” were viewed as too good to miss, and they could only be seen via a Netflix subscription. The company became the pioneer of streaming original content (rather than a distributor of other companies’ materials). They quickly gained back their lost subscribers. Many times over.
Starbucks: Pumping The Brakes On Overexpansion
Starbucks is the company that brought “bougie” to the masses.
Few can afford an annual membership to their local country club, but most can throw down for a $5 PSL (pumpkin spice latte) at their corner Starbucks.
As ubiquitous as Starbucks are today, it’s hard to believe that they almost sunk themselves by trying to grow too fast.
Overexpansion in the mid 2000’s led to poor customer experience. The brand had become diluted. When the aforementioned financial crisis of 2008 struck, same store revenues started to decline appreciably.
Saving Stroke: A renewed focus on the customer. Howard Schultz returned as CEO and promptly closed underperforming stores. He retrained baristas to make a Starbucks visit a one-of-a-kind experience and re-focused the mission on crafting a quality cup of coffee.
Notice A Pattern? Cash Discipline Spurring Change
Although the saving stroke differed for each of these companies at the surface level, there were common themes among all. They were bold. Focused. Strategic. Guided by strong leadership.
And they got decisive with their cash allocations.
At the heart, each of these companies figured out how to solve cash flow problems. They identified the leakage. They cut out the waste. And they took action to drive a remedial revenue burst.
This improved cash discipline helped them quickly turn around their fortunes, paving the way for them to grow into the behemoths they are today.
Where There’s A Will: Turn Around Your Company’s Fortunes Today
If you’re facing challenges with your business, you’re in good company. Some of the world’s leading mega-caps were in the same place at one point. With bold vision and disciplined fiscal policy, they were able to quickly reverse their fortunes and navigate to prosperous financial times. For more of the latest trends in business and entrepreneurship, explore the content at Bit Rebels for additional thought leadership!
Author Bio: Sam Willis is a freelance writer that loves sharing his knowledge and expertise in engineering, construction, and business. He lives in Atlanta, Georgia where he enjoys spending time with his wife and family in his free time. Sam’s work as a freelance writer can be found on Building Product Advisor, a construction industry resource site.
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