Your business doors are still open and while there have been a few setbacks, you’re fairly certain that your business is doing well. You shouldn’t have to wonder if your business is safe, you should know. Look for these five warning signs of a failing business to know whether your company is safe or if it needs a few changes.
1. Late to Pay Bills
Although it is normal for businesses to be late on an occasional payment, if you are consistently getting threats from creditors then your company is probably facing a cash flow problem. Your business needs cash-flow to properly pay for bills. Make sure that you’re collecting at a reasonable time or you won’t be able to pay your own creditors. Missing payments can be deadly to a company and can easily lead to closed doors if your creditor decides to take serious action against you.
2. High Turnover
If your employees are constantly leaving it can lead to low productivity and higher training costs. Your employee turnover is a definite indicator of the success of your business. Your employees may be facing factors such as low pay, ineffective management, and poor working conditions that can easily be remedied and increase the productivity of your team.
3. No Feedback
Customers need to be talking about your business. Valuable feedback and free advertising can easily be gained from your customer’s word of mouth; if they aren’t talking, it’s a sign that they might not be impressed with you. Make sure that you allow your customers to provide reviews and voice any concerns so you can properly address them. One way to receive feedback from customers is to provide a form like Electrical Wholesale does on their contact page.
4. Low Sales
You must be hitting your projected goals, especially in sales. If your sales are lower than your projections, or just lower than the previous year, you need to find out what is wrong or you will have trouble paying bills in the future. Low sales are an especially time-sensitive problem as bills arrive and you need to be prepared to pay them.
5. Same Mistakes
There will be times when you think you’ve solved a problem only to have the same issue occur again in your business. If you constantly have the same problem, it is a sign that your business is not doing well. It could be that you were unable to collect data and use it in a meaningful way or maybe the issue was not fully understood. No matter the circumstances, if your business is suffering and it affects customers, they probably won’t want to deal with the problem anymore. Be sure to address each mistake and see that it doesn’t happen again.
Low sales, high turnover, no feedback, late payments, and mistakes, are all signs that you have some work cut out for you. With any problem, if you catch it early on, you’ll be a lot better off. Make sure you keep these warning signs in mind as you provide for your business.