Indicators that Your Small Business is on the Verge of Falling
Often, a very thin line exists between a company that is falling and that one that is just experiencing cash-flow problems. Certainly, businesses do not collapse overnight. In many instances, there is usually a gradual decline in business activities. Even so, most small business owners miss detecting the failure symptoms until a business is unable to meet its obligations. Below are pointers to help you understand common signs that indicate possibilities of your business could be failing.
Inability to Pay Bills on Time
Every business incurs expenses that should be serviced for smooth operations. Such expenses are paid to property owners as rent, employees as salaries and wages, suppliers and utility companies. Mainly, it is normal for businesses to struggle to make occasional payments. However, things turn ugly when you start receiving payment requests from creditors in the form of threatening messages, phone calls or emails. This is symptomatic of a serious falloff of your business. Ignoring this type of indications may culminate into a huge problem that may lead to the closure of a business.
Lack of Social Media Presence
It would be very baffling to get a business that has no social media presence in this era. A majority of the market composition are the millennials who could easily be reached through social media. The benefits of having social media to any small business are immeasurable. Marketing activities and public relations become swift and get to the target audience. Due to the current market trends and patterns, any business without social media presence is lacking an essential success pillar. This implies that the total absence of a small business in social media should be taken as a major reason for the lack of and reduction of sales revenue.
High Employee Turnover Rate
While running a business, staffing proves to be one of the common problems that affect small enterprises. Therefore, staff turnover is unavoidable while running a business. Even some of the most successful companies around the globe lose and hire employees all the time. Nevertheless, high employee turnover is a sure sign that your business is not doing well. It displays a major collapse of the internal worker-employer relationship. There is poor staff morale and productivity is affected. More so, there are high costs associated with the recruitment and training of new workers.
Reaching Borrowing Limits
There is trouble if your small business has reached borrowing limits on services such as bank overdrafts and business credit cards. When your banker refuses to finance you on several subsequent occasions, you need to ask yourself why! The main reason is that they can recognize financial constraints in our small business that you have not been working towards solving. With such things happening, you should stand aware of the possibility of your business being at the edge of a cliff.
Failure to Pay Salaries
Struggling to process salaries and wages of employees is a major sign that the business is falling. A healthy business should be able to finance the salaries and wages of employees and give a fair return on investment to the owner. If this is impossible for a few months, then this is a sign that the business is failing.
Loss of Major Longtime Customers
Some businesses rely on a small number of key customers for most of its revenue. It can be real trouble if a business lost even one of such a customer to a competitor. That could be a suggestion that competitors are offering superiors products and services. It could also mean that your small business is not meeting customer demands. As a business owner, one should quickly identify the reasons why longtime customers are leaving. Afterward, one should make strategies on how to prevent further loss of customers. Nonetheless, this stands out as one of the major signs that your business is falling.
A Rise in Customer Complaints
According to various successful entrepreneurs, a significant increase in the number of complaints is a sign of the deteriorating quality of products and services. If not addressed, it could imply that the business is not doing enough to meet customer expectations. It is an early warning sign of failure that should be a concern for a small business owner. A decrease in customer satisfaction can quickly lead to a downtrend in sales and revenue. It is imperative to note that dissatisfied customers are no longer interested in buying form a business. Instead, they propagate negative experiences and information to others. Such complains show that the business is falling and stringent measures should be implemented as resolve.
If you feel like your business is falling, talk to us and explain some of the signs that may coincide with those above. Our experts are more than willing to take you through some of the best measures that you take to salvage your small business.
