7 Distress Signs Your Business is Failing, how to turn it around
Running a business may not necessarily mean you are successful at it. Of course, everyone wants to succeed but no one wants a bad start. However, few businesses pack up without sending warning signals to the owner, meaning that very many show these warnings before going belly up. Here are 7 distress signals that your business may be failing and how to turn it around:
1. Having no competitive advantage
For any business to succeed it must have a viable edge that makes it different from the competition. This difference sets it apart from the entire stock. If your company isn’t offering anything unique, your business will definitely not stand the test of time.
Turning it around: You might want to get back to your drawing board by taking a second look at your business plan to help you figure what you will offer that will benefit your customers and differentiate you from your competition. This will endear you to a new and existing customer base and will keep them locked in because of what you are bringing to the table.
2. Dealing with cash flow challenges
When you struggle to pay your bills on time or have to engage in aggressive marketing and promotions to keep your business afloat, there might be need to re-strategise. Keep in mind that one of the most important things to get right in business is trying to manage your cash flow properly. Persistency in deficits over long periods can lead to serious issues such as business failure.
Turning it around: Never invest heavily into something you are not sure will work soon. In short, buying the inventory that you need for now is the way to go.
3. Increase in Customer Complaints
A substantial upswing in customer complaints concerning your product or services especially for lack of satisfaction is an early warning sign of potential trouble for your business.
Turning it around: An entrepreneur must find out why customers are dissatisfied and devise means to make the needed changes in the processes of his business before it goes under.
4. Compromised Feedback
Silence isn’t golden when it refers to the feedback channels in business. If your customers aren’t leaving reviews, talking or engaging you in any way possible, then there is already trouble. Since they are not communicating with you, they are very likely talking with your competitors.
Turning it around: Try to pay rapt attention to your feedback channels and understand why your customers are getting back to you about your service or product. Channel your thoughts to building a proper avenue where you can view and opinions of your customers. Social Media is making customer care seamless, why not tag along?
5. Decreasing Sales
Having declining sales and low patronage is one first clear sign that your business might be going under. When there is a drastic sales drop that is lower than your forecasts, or when the sales are lower than the previous year, you might have a problem. Sales are the lifeblood of most businesses. A sales drop could lead to the death of business especially if it has been struggling in recent times. For companies to succeed, they need to make sales.
Turning it around: The way out is by going through your processes and finding out what could be going wrong. Did you just introduce a new product? Are your new strategies not as effective as planned? Whatever the issues are, you must quickly find the means to turn the tide for good before your entrepreneurial boat collapses.
6. Loss of Important Clienteles
For small businesses that rely on a number of key customers for the larger part of its income, this is a grave sign that could lead to the business’ demise.
Turning it around: Identifying the reason for the loss of patronage from major customers and tackling the issues head-on is the way to go in order to prevent further losses. Also, there will be a need to reach out to the customers you have lost via any means possible.
7. When your projections are far off the mark
Forecasting, budgeting and even monitoring your bank history are good techniques and great thought tool for the entrepreneur to help him plan his business. But when they are a far cry from reality, it then behoves on him to quickly retrace his steps.
Turning it around: It might be a good time to jettison the spreadsheets and get a good accountant. Financial statements are better off in the hands of a professional accountant. Also, projections are not blueprints. Meaning that they can falter because they are not business intelligence tools.
ALSO READ: How To Successfully Define Your Business Strategy For 2019.
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