The How and Why of Restructuring Your Struggling Startup

When your startup isn’t doing well, it can be easy to throw in the towel and go down with the ship. However, a good entrepreneur knows that pivoting and restructuring are integral parts of any startup success story. A new plan could make all the difference in attracting customers, acquiring capital, and getting your brand out there.

However, before you take the leap to restructure your startup, take the time to consider the reasons why you are making this change.

Why Restructure

Restructuring is never the goal when it comes to the idea stage in your startup. But it can be just as, if not more important than the original concept. Adapting to the market is a good trait and your startup will be better for it. Make sure you are doing it for the right reason though, otherwise you could end up with a pivoted product and no market to sell it in.

Here are a few viable reasons to restructure your startup:

Your Location Has Become a Burden

Sometimes a company might be experiencing a drop in revenue because of something as simple as location. By moving the business to a new location, it may be possible to resolve the problem. This might be particularly applicable for a retail business. Perhaps, for example, the neighborhood has changed because a large mall has shut down and people now prefer to shop in another part of the city that offers more shopping options.

Still, changing locations is not easy, particularly if a company has been in a certain geographical location for a long time. Fortunately, it’s possible to efficiently manage people and asset data by using an asset and move management software solution like Asure SmartMove, which provides a way to figure out everything from metrics to interactive floor plans to logistics.

You’ve Lost Key Members to Competitors

There could be any number of reasons why there is a “brain drain” and people are joining another firm in the same line of work.

Perhaps the new competitor offers better salaries, perks, and employee incentives like paying employees to upgrade their knowledge and skills. They could have a better corporate culture.

However, in a large proportion of cases, high turnover is due to low morale rather than a new competitor raising the bar on employment standards. Low morale could be due to a change in management resulting in lower commissions, destructive feedback, broken promises, and favoritism.

Whatever the reason, it has to be discovered and appropriate steps taken to correct it. Why is there an increase in turnover? What changes must a company make to increase employee loyalty?

How to Restructure

Now that you have determined your startup is in need of a restructuring, it’s time to get your hands dirty and dig in. There are two primary means of restructuring a startup and deciding which one take to is almost as important as the decision to restructure in the first place.

The first is in a reactive way. This method of restructuring is focused on reacting to the market and customer need. trying one thing after another, desperately trying to figure out why there is a high-turnover, why customers are no longer buying as much, or why sales are noticeably falling every quarter.

The second is in a proactive way. This method of restructuring is focused on noticing what is not working before it creates a problem. The key is to create strategic meetings to figure out why the system is broken and how to fix it. This method of restructuring is significantly more practical and can lead to startup success much faster than just reacting to problems.


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Written by:
Ryan Kh is an experienced blogger, digital content & social marketer. Founder of Catalyst For Business and contributor to search giants like Yahoo Finance, MSN. He is passionate on covering topics like big data, business intelligence, startups & entrepreneurship. Follow his latest posts on Clear World Finance and
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