Key Signs Your Company Is Facing Difficult Times
Just like people, every company has sunny and rainy days. A distressed business usually has a range of warning signs. The latter serve as special signals to take action immediately. Do you feel like your business is in big trouble? Has your company lost its reputation? Are your employees demotivated or even destined for career failure? In case you recognize the following warning signals in your company, make sure to act promptly in order to find and implement the right solutions. If you act fast, you will get your business back on track pretty fast.
High Personnel Turnover
If you’re constantly replacing your employees, chances are that you’re wasting precious days, having to spend a lot of money and time training new personnel. In order to cut personnel turnover, make sure to consider the following:
- Let your employees take part in business management. If you do so, you will get more dedication.
- Prepare a solid recruitment plan that clearly states all the requirements that your personnel has to comply with – flexibility to work within the deadlines, certain qualifications, ability to work in a team – and make sure to invest your time to ensure you hire the right people for your team.
- Ensure the business culture involves the rewards that your personnel expects to get.
- Be the number one choice. It is highly recommended to provide your staff with proper training and support, and the word’s going to be out.
Others Notice Your Business Fiasco
If your company reached this point, it is time to ring the alarm bell. You have to remember that people who are not into your business niche also notice if your ship is sinking. Investors, clients, and personnel can also notice what is going on in your business community and make decisions that are best for their career. Regardless of the measures that you take to improve the situation, make sure everyone is on your side if you are serious about your long-term success. In case the signs of your failure are getting more and more apparent, there’s a chance that you can’t bring your business back on track just on your own.
Your Business Has Too Much Inventory
Without a doubt, it may sound a little bit weird but even if you believe that your company is working well right now, having too much inventory is one of the warning signals that the door is about to shut for good. In case you start investing too much money in products, you risk ending up with zero cash needed to pay your bills and creditors. As a result, every other loss of inventory will turn into a gaping wound.
People Don’t Care About Your Business
Let’s face it – business owners like it when people rave about their work. In case no one is there to check and review your business if people have no idea that your company actually exist, and your family and friends don’t share your work via their social media accounts, something is just not right.
Online reviews should be of the utmost concern. The point is that reviewing businesses on the web is an integral part of our life in 2020. In other words, as your business keeps expanding its activities, you should start seeing more and more people reviewing it online. What is more, the business owners may be even asking for competent reviews. In case you don’t see your business reviews popping up here and there on the internet, the users may not have enough points of view on your product, and that’s trouble.
You Haven’t Talked to Your Potential Clients in Ages
Once and for all, you should speak to your new and regular clients constantly. If you haven’t talked to them in more than a month, it is the right sign that your business lacks what it takes to succeed in your niche, or your staff fails to do their job properly. Regardless of the reason, it is big trouble and it also means that your business is about to fail unless you, as the boss, can find large sums of money within the tightest deadline in order to change things considerably.
Your Profitability Level Is Beyond Low
If you encounter problems relating to your profitability – your company could be on the wane. In order to avoid this kind of financial disaster, make sure to begin to monitor your profitability. Besides, you will have to monitor issues on a regular basis, as well as take into consideration the following areas:
- When it comes to the field of sales, you have to make sure that you have the key measures required to attract and retain new clients, as well as to ensure all of them are winning.
- Gross profit margins – your task is to pay attention to your own costs and prices, as well as check expenses on a regular basis.
- Check the productivity level of your employees and your rosters. In this case, you have to ensure that every member of your business group is fully employed during their rosters.
- Are you providing any discounts? If yes, you have to be prepared that it will impact your profitability inevitably. It is important that you search for alternative opportunities to provide any extra options to your clients, like after-sales support or a price cut on the volume-based sales.
Your Best People Are Leaving
One of the most warning issues that you can notice in your business community is when the best people are leaving you. Employees that lack motivation or even worse, employees that are depressed about their current position are a serious sign that something is just not working in your business. If the members of your business community are unhappy about their place of work, this could signal about the following:
- You are not capable of paying experts at the current industry rate.
- It may indicate that higher managers fail to maintain an inspiring and attractive environment for work.
With the enthusiasm and drive being drained from your company, your personnel will definitely start hating their current place of work, which is not good. In other words, if you notice the most talented employees running away from you, your business is about to die.
You Know Your Clients by Name
It is a great idea to be aware of all the trends within the market. However, if you know every client by the first name, it is time to stop and reconsider your business. It is an alarming sign that you focus too much on personal relationships with clients that, in turn, hold your company together. It is time to recruit a professional team of sales experts, as well as hire a qualified person to interact with your clients. As a result, your clients will get used to communicating with a trusted person.
Complicated Financial Accounts and Systems
This one is related to low-quality record keeping. The point is that both confusing financial accounts and systems are always there together, and they cause the same trouble – business owners face inevitable financial disaster.
Without a doubt, your business is based on regular financial records. If they happen to be imprecise and poorly done, those records might also not exist at all. It is crucial that you, as the business owner, have to pay more attention to the issues in order to keep up with your current taxes.
If you fail to understand your business accounts, they are definitely too confusing and even complicated. Keep in mind that all these financial systems should be both efficient and simple to deal with. There is no middle way!
Poor system of record keeping is a window through which financial collapse can enter your business. From its first day, your company should have solid record-keeping and financial systems that, in turn, should transform as your company changes and grows.
At the same time, financial accounts can become tough when you fail to keep your operating costs separate from your funding. All these issues come hand in hand, as you can see. However, they tend to appear on opposite sides of the business scale. When the executives and accountants of your business fail to pay due attention to those sides, it’s real big trouble.
Your Company Is Complacent and Remains the Same
The bad news is that this is something that you and your partners may not notice until it is too late, and there is nothing that you can do about it. Just take a look back at the last year of your work. If you realize that nothing has been changed for ages, your company is definitely doomed. The thing is that even if your business seems to be in top positions, you have to seriously think about potential changes. Keep in mind that even the most successful corporations have to face changes and experience innovations to be able to make progress in the chosen fields. At the same time, it is complacency that can ruin your career and undermine your progress towards achieving sustainable business development.
You Can’t Pay Your Debts
If the debts of your company are mounting really fast, and you fail to pay them all – the time to search for the proper ways to restore your financial situation has come. If you need to boost your cash flow, here are some quick ways to work on it:
- Sell excess or old stock.
- Make cash flow forecasts every week in order to have a clear idea of what you have to pay for and when.
- Prepare solid procedures to collect debts from clients and follow them.
Watch Cash Flow Problems
If you began to use credit facilities more intensively, it is fair to say that you’ve got a problem. Negative cash flow means that your business is now based on money rather than on sales. The sum of money that you use may vary from month to month, which means you may not notice when the use of an overdraft facility reaches a critical point. In other words, if you start relying upon an overdraft facility more and more, your business is in trouble.
You Repeat Your Mistakes All the Time
The reality is that a lot of business owners keep making the same mistakes without even realizing it. If that’s your case, your business is not doing well. You, as the boss, may think that you have found the right solutions to your problems to face the same outcome that you’ve been seeing for quite a while. If you haven’t been able to find the reasons why you tend to make the same mistakes endlessly, chances are your company is living its last days.
Work Slows Down
Believe it or not, but time is one of the concerns when it comes to most failing companies. Your employees have fewer tasks to accomplish and more time off. Without a doubt, a slow working day is a nice surprise for every person. However, if your employees find themselves always focused on social media accounts all day long, there is definitely something wrong with your business. It is one thing to kill some time during the day, but it is no good when your employees do not even try to hide their favorite productivity killers.
You Fail to Pay Your Bills Within the Deadline
There’s an unbreakable truth – a successful business owner is capable of paying all bills within the deadline. In other words, it is your priority to organize your bills and keep track of due dates. In case you can’t manage all of the monthly payments within the due date, it means your business fell on hard times. The issue is quite serious, and it should be a source of some alarm. Your financial standing needs immediate attention!
Lack of Team Management Skills
A lot of companies tend to fail when it comes to proper management of corporate teams. Even though building teams is hard, it is the key to getting your company where you want it to be. Make sure to take your time to build and lead a team of professionals. As a result, they will raise your profitability and let your company gain momentum.
You Spend Your Vacations Up to Your Neck in Work
If you find yourself working twenty-four hours a day even during your vacation, it is a bad sign. You should spend your free time focusing on your rest, as well as recharge before getting back to work. We recommend beginning by taking two days off and seeing how things are going with your business during this time, while you are away. Do you think your company might encounter any failure while you’re on vacation? Make sure to build solid backup systems. In other words, you have to work up until you know you can have a couple of weeks of rest, and your absence is not going to ruin your business.
You Have Troubles with Loans
Without a doubt, your business cannot function properly and prosper without loans. But the reality is that if you experience problems when it comes to getting these loans because of disappointing numbers (that do not reflect your business success) you are definitely counting too much upon less trusted lenders. This, in turn, puts you in a very unfavorable position.
Get Back on Your Feet!
Now that you are aware of all the basic signals that warn you about the business troubles, we hope you have the courage to make serious decisions that should be made to boost your career. You may be the entry-level manager or the owner of your business – if you see the range of the warning signals, it is important to do your best to enhance your position within the market.
We recommend following these simple tips to ease the financial segment of your company, as well as get your business on its feet:
- Each week, make sure to devote some time to your financial records. Ensure to review each when you know you’re not going to be distracted.
- Ensure to have a solid filling system that will help you manage bank statements, invoices, and all the data that your business needs to function well.
- Train your finance management team. There are many different workshops and seminars that can help both you and your employees to understand the system and make it work better.
Whether you’re the owner of wine, publishing, custom writing, or any other type of business, the field is cutthroat, challenging, and competitive. Since the dawn of time, business owners have achieved high levels and fallen. Only very few companies have been around for more than two generations. Do you know what the lesson is here? Even if you believe that your business is stronger than ever, things may change in a flash. In order to remain competitive in a harsh world of business, you have to focus on growth, quality, and innovation.