According to the Chamber of Commerce, 18% of small businesses do not survive their first year. However, facing struggles in your business does not equate to failure; instead, it presents an opportunity for adaptation.

Instead of fixating on challenges or maintaining a forced sense of optimism, let’s reframe your business struggles as chances for growth. This guide will assist you in identifying common causes of business struggles and provide practical steps to get your business back on track.

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Common reasons small businesses face challenges

Understanding the reasons behind business struggles allows you to confront issues head-on. Here are the primary factors to be mindful of:

Cash flow issues

If you find yourself losing sleep over profit and loss statements, you are not alone. When your bank account is running low, collaborate with your accountant to identify new revenue streams or strategically cut costs.

Market fit challenges

Occasionally, enthusiasm for an idea can lead to overlooking proper research. If you are not observing the expected demand, it may be necessary to reassess your market fit. Through thorough research and innovative thinking, you can pivot your offerings, discover new audiences, or adjust your positioning.

Competition pressure

The ecommerce industry is saturated, and similar products often sell at lower prices. Instead of rushing to reduce prices, focus on highlighting what makes your business unique and enhancing those advantages.

Business model issues

Even brilliant ideas necessitate sound business models. If you are constantly struggling to stay afloat, it might be necessary to consider structural changes rather than quick fixes.

Identifying business challenges early on

If you are reading this, you have likely noticed some warning signs. In addition to financial indicators, watch out for these red flags:

Customer feedback

Negative reviews, while challenging to read, provide valuable insights into what drives customers away. Moreover, how you respond plays a crucial role—according to Podium, 56% of consumers alter their opinion of a business based on review responses.

Team morale

Your team can detect problems early on. If you observe disengagement or high turnover, seek their input through conversations or anonymous surveys. This demonstrates that you value their perspective while gathering essential insights.

Conversion rates

According to Dynamic Yield, the average global ecommerce conversion rate from November 2023 to October 2024 was 3.37%. Check your Shopify behavior reports to compare your store’s performance. Low conversion rates often indicate barriers preventing interested shoppers from completing their purchase.

14 steps to revitalize your struggling business

1. Change your mindset

Success is not solely about working harder but also about working smarter. Research indicates that your intentions and values influence your actions. By cultivating a growth mindset—believing that your capabilities can be enhanced through hard work—you will view challenges as opportunities for learning and improvement.

Here’s how you can develop a growth mindset:

• Learn from setbacks: Failures are inevitable for every business. Each failure teaches you what adjustments to make in the future.
• Remain adaptable: Plans rarely unfold flawlessly. Flexibility enables you to navigate unexpected challenges.
• Prioritize self-care: During tough times in business, it may be tempting to work incessantly. However, burning out will not benefit you or your business’s success.

2. Establish clear goals

With your mindset in a positive state, it’s time to turn your business around. Setting goals helps focus your efforts and maintain momentum during uncertain times.

Research indicates that goal-setting boosts motivation, self-esteem, and confidence. It also strongly correlates with success.

Start small. Instead of setting lofty goals that may disappoint you, break down significant goals into smaller, more achievable objectives and celebrate their completion. For instance, if your overarching goal is to acquire 200 email subscribers, your mini-goals might include:

• Sign up for email marketing software
• Create a sign-up landing page
• Develop your first email campaign
• Promote your list across your website and social media

3. Understand why customers are departing

While customers may explore other options, persistent negative feedback demands attention. Determine why customers are leaving, such as:

• Unsatisfactory customer service experiences
• Products not meeting expectations
• Unclear value proposition
• Aggressive sales tactics

Establish a feedback system with your existing customers. Tools like UserLoop or Fuzzy Surveys can help you gather insights and comprehend what customers truly desire. Utilize this data to enhance your products and marketing strategies to boost both sales and loyalty.

4. Identify your target audience

Your target audience comprises the group your marketing efforts are directed towards. Understanding whom you are trying to reach enables you to attract new customers effortlessly and bring qualified buyers to your store.

Take the example of cosmetics brand SUGAR, which spent three years defining its target audience. Founder Vineeta Singh stated in a Shopify Masters podcast episode that, “While we were running our ecommerce business between 2012 and 2015, we realized that there were a lot of millennial women who couldn’t find that perfect nude lipstick or a perfect red lipstick.” The brand identified its core buyers as:

• Indian women aged 20–27
• Living in metropolitan areas
• Heavy digital content consumers
• Inspired by global trends
• Seeking trends adapted for Indian preferences

This insight led SUGAR to develop its successful product: liquid lipsticks.

The durable formula was ideal for India’s humid climate and the specific needs of their target audience. SUGAR has seen significant growth, expanding from one ecommerce store to over 10,000 retail touchpoints and securing over $21 million in Series C funding.

SCORE

SCORE, a nonprofit organization that partners with the Small Business Administration (SBA), connects business owners with experienced mentors who volunteer their time to provide guidance and support.

Take action now

When your business is struggling, it’s essential to be proactive. Don’t wait for problems to escalate before taking action. Implement strategies to prevent further issues and address existing challenges.

Successfully turning around a struggling business can be incredibly rewarding. Every entrepreneur faces obstacles, and overcoming temporary setbacks is just part of the journey.

Remember, even if this particular business doesn’t succeed despite your efforts, the experience gained is invaluable. Many successful entrepreneurs have encountered setbacks before finding their winning venture. Persistence is key.

Learning from setbacks

Recognizing that your business is struggling is the first step towards improvement. While tough decisions may need to be made to keep your business afloat, remember that overcoming challenges is a natural part of the entrepreneurial path.

Whether you need to attract new customers or secure funding, taking the time to regroup and rebuild is a necessary aspect of developing a successful business.

*Shopify Capital loans must be paid in full within a maximum of 18 months, with two minimum payments required within the first two six-month periods. The actual duration may be shorter based on sales.

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