When you start a business, you do so with high hopes. You believe you can make your vision come to life and that you will be successful. Unfortunately, though, it’s not always that simple. A large number of businesses fail in their first year, and even those that are successful often have to encounter bumps along the way. If you’re going to be one of those businesses that makes it past the “bumps,” it’s important for you to recognize the signs of a failing business. If you know these signs, you can spot them easily if they start happening to your business and then develop a plan to get things under control while you still can.
Sign #1: You’re Not Drawing in New Clients
Having loyal customers who use your services or buy your products again and again is great. However, just because you have a loyal fanbase doesn’t mean you could or should rest on your laurels. If you’re not regularly drawing in new customers or clients, you’re doing something wrong, and it’s likely that failure is only a few steps away.
Take this sign as an indicator that you and/or your employees aren’t doing enough in the marketing department, and kick things up a notch. Develop new products or ideas or just some fancy new marketing to attract new clients and appeal to a wider demographic. You’ll be back on track before you know it!
Sign #2: Dwindling Sales
All businesses go through dry spells. Some businesses, in fact, have entire seasons where there profits are very low, simply because of the nature of the products they sell or the services they offer. A company that sells bathing suits, for example, is likely to notice a marked downturn in sales during the winter months.
If you don’t have this type of excuse, however, or even if you do, it’s imperative that you take action during periods when sales are low. Go after past due clients if you can and develop special offers or other creative marketing that can drive sales and profits up during these slumps. You can get through it, but it’s going to take some effort on your part!
Sign #3: You’re Falling Behind in Bills
Every business is going to have expenses, but if you’re having trouble meeting yours, watch out. Falling behind on your space rental, for example, or on supplies often means you’re not far off from total failure.
The second you notice any kind of problem with paying your bills, check in with your accounting department to find out what’s going on. The sooner you can get to the root of the problem, the more likely it is that you’ll be able to fix things and get back on track. Don’t delay though because, once you get behind, it’s a slippery slope, and it doesn’t take much to make things worse.
As you can see, businesses rarely just “die” out of nowhere. There are usually clear warning signs on the way to failure. You just need to be on the lookout for them and ready to take action as soon as problems start. If you can do this, you can save your business!