Starting and running your own business will always come with its challenges, especially if you’re just starting. If you find yourself encountering more than your fair share of problems, it might be time to start thinking about whether you’re taking on too much and your company can’t support the load.
No matter how well things are going, there’s always room for improvement. You can solve most of these warning signs with a bit of forwarding thinking and a willingness to adapt and change. Don’t accept bad news as fate; instead, take control of your business by making small but impactful tweaks that will keep it moving in a positive direction. You can also opt for a reliable business consultant if your troubles seem insurmountable. Consultants can help chart a course through rough waters by offering guidance and insight into what changes should be made and why they should be made. They can also provide unbiased advice during times when emotions run high or people disagree on the best strategies.
Several entrepreneurs assume that the idea of business and success are synonymous, but that’s not true. Even if you have the best product or service in your niche, there are plenty of ways to fail — some are difficult to see if you don’t know what to look for. If you want to make sure your business has long-term viability, be sure to keep an eye out for these eight signs that your company is in trouble.
Sales are Declining
Sales are a company’s lifeblood. When sales are declining, your company is losing momentum. Many companies that have revenues of $2 million or more experience at least one-quarter of declining sales each year due to seasonal influences. Yet, if your annual revenue growth rate has dropped for two consecutive quarters and shows no sign of turning around—even after you’ve made changes to address customers’ needs—you might have a serious problem on your hands.
Cash Flow Issues
Cash flow issues happen when a company can’t cover its expenses from month to month. These problems are typically an early warning sign of impending bankruptcy. If your business can’t pay its creditors on time, you should make some changes now before it gets out of hand. Creditors have every right to be upset if they don’t get paid. They may even demand that their money be back immediately or give you unfavorable payment terms if they know there will be cash flow issues in future months. It’s bad for them and worse for you—and it won’t affect one area of your operations either: almost every part of running a business relies on cash flowing smoothly through operations.
Poor Employee Morale
Low morale isn’t always obvious, and a few disgruntled employees don’t necessarily mean bad news. But if you notice that a significant part of your workforce has checked out or are actively looking for work elsewhere, it may be time to investigate deeper. Take an honest look at what’s happening in your workplace. Are people genuinely passionate about their work? Or do they seem burnt out?
Negative Community Feedback
It’s important to listen to your community and hear what they have to say about your product. While many users will have positive things to say, some negative feedback might help you identify areas for improvement or new features you can offer. Keep an eye out for more than just one piece of negative feedback. If you notice multiple complaints across several channels, it could be a sign that something’s wrong with your product and not simply a matter of user preference.
Sinking Stock Price
Investing in a company is like buying a stock. If you own, say, 100 shares of Google stock at $600 per share, you’re worth $60,000. But if that value drops to $50 per share over months—or even weeks—you could be out hundreds of thousands of dollars without warning.
Lack of Leadership
If a company isn’t managed by someone with a clear sense of where they want to take it, it’s probably not on track. Without strong leadership and direction, employees will have no way to gauge what’s important and how they should be spending their time. If your business doesn’t have a good manager who knows what needs to be done, your whole team may be out of alignment with where you want to go as an organization.
Inability to Make Decisions
One of the surest signs your company is floundering is an inability to make decisions. Every company has its fair share of indecision, but when it becomes routine, you may be looking at a business that’s on life support. When managers don’t have direction from above or are unsure of what their customers want, they can become hesitant to implement new programs and tools. This hesitation can lead to poor decision-making and serious disruptions down the road.
Failure to Innovate
If you’re not willing to innovate, you’ll find yourself on a slippery slope. There are always new ways to do things, whether it’s packaging, delivery, or any other aspect of your business. You may want to go into autopilot mode and keep doing what you know works, but if your competitors aren’t innovating, and they surpass you, your long-term outlook could be dismal.
Even if your company seems to be doing well right now, it’s important to keep a watchful eye on whether things are continuing to progress. If you notice any of these signs, it may be time to reevaluate your company and make changes accordingly.