External causes are, generally, the easiest to find.
They fall into predictable and unpredictable causes.
These are things that have been growing over time and are now having sufficient impact to damage the health of your business. Examples include:
- Competition: common examples are:
- The damage done to small shops when a large chain store with the same products sets up nearby. Their greater buying power, and consequent lower prices, attracts your customer away.
- Increasingly common: an internet-based competitor takes off, and draws customers away, with bigger product range and lower prices.
- Technological and similar disruption: in this situation, the service you offer is being replaced with another technology. An example, is the evolution of music from vinyl to cassette to CD to iPod and now to streaming. Music stores have largely disappeared from our streets.
The “good” news is that it is fairly clear what is causing the problem. So, you can take informed actions to respond to those causes.
A major issue with these longer-term problems is that there is, probably, no going back to the old ways. You can take immediate steps to streamline your business as much as possible. But, the longer term scenario will have you “pivoting” and moving into a business sector with better odds of survival. Alternatively, exiting the business in a controlled manner.
These are things that you did not expect and generally happen with little or no warning. Natural disasters like flood, fire and storm damage are typical. Also unpredictable problems like Covid 19 are in this family.
Again, the “good” news is that the root causes of the problem are known so it is comparatively easy to decide on solutions to a known problem.
With unpredictable events, your business sector may spring back once the cause is removed. Your challenge in the next 90 days is to re-structure to last out the unfavourable conditions. Then wait for the market to come back and your business to resume.
What is The Problem to Fix?
If the root cause of your problem is external:
Give time to thinking what it is that you want to fix in the next 90 days of your Turnaround90 Campaign.
This is covered in the following topic on “Selecting a Problem to Fix“