What are the signs your business is going to die sooner or later?
In recent and primitive time, a lot of businesses slipped into the creek bank and this has caused a rapid downfall to such businesses. In our society today, many businessmen and personnel exist but only few always stand out with business that will never die in the long run.
Apparently, it is normal for a business to grow, but it becomes a greater credit to the business owner when the business attains a level of long lasting success; not just a temporal one.
Now; from my recent discoveries, I have been able to note that one of the major reason why most of these business fail is not because they lack strategies or poor management schemes.
But the simple reason why you see some signs that your business is going to die or failed, is probably because of your (the Business Owners) inability of discovering their mistakes and licking holes. Yeah, the sole reason is evaluation.
Their business will certainly go bankrupt if they don’t do a regular evaluation. On this context, evaluation here means checking and analyzing their business regularly so as to correct any mistakes nor weak points.
So, any business that doesn’t do proper and regular evaluation may not likely know when their business is falling or growing. Always take note of this and buckle up.
Although it is very rare for a business to die, so it is rarely sudden. Few small businesses die overnight but are typically drawn out affairs with lots of warning signs on the decline.
With all these ideas and lots more, then why do many ventures and businesses die every year and almost in every country around the world?
One of the popular quotes of Rhondalynn Korolak I’ll never forget in a hurry states that “it is prudent to look out for early warning signs a business is failing”.
In addition to that, He (Rhondalynn Korolak) also said that “It comes down to failure to detect commercial illness early“. Rhondalynn Korolak is a Business coach and founder of Imagineering Now.
Moreover, almost every business will definitely experience some bundles of financial distress or pressure at some stage and the right keys to survival in this very situation lies in the ability of the owner to diagnose problem areas and take corrective action quickly.
Having spoken much on this, here are the possible signs to know that your business is going to die.
Signs Your Business Is Going To Die
1. Steady Price Slashing:
This is the first of the 6 signs your business is going to die, if care is not taken now. According to Taylor, one of the reputable influencers states that “Discounting is a major problem in small business as everyone seems to think they need to do it”.
But they keep eroding their profit margins until they just are not sustainable (no more business). When you notice this or probably have been doing this, note that your business is at the verge of dying.
Expert and excellent service goes a long way to appeasing customers querying a price rise. Now this very situation could be curable if you can stop competing solely on price, then increase prices and add value where possible.
2. Debt Dependency
Another reason why your business is going to die is debt dependency. Being over reliance on borrowed funds to pay loans and meet other business costs (Leases, wages, inventory etc.) simply means that your business is at the state of dying sooner enough that you can think of.
If a business is experiencing difficulty paying creditors and tax obligations and has a continual need for capital injections and loans because business is not generating enough operating income internally, you are always selling but don’t collect payments quickly enough and relying on credit cards to cover this period; these are sure signs of financial crisis.
Now you can make a change so quickly without any hesitation whenever you notice this in your business. You should inject your sick business with a new life by collecting outstanding debts, renegotiating debts, contributing more equity via partnerships or your own money, or selling unused inventory.
Yeah, that’s the only remedy for such situation. You get rid of this by reducing debt, immediately.
3. No new customers
According to Mackenzie G. Iain (author of business titles including Results in a Minute), he stated that “One of the earliest sign a business is failing is when there have been no new customers for six to 12 months“.
In addition to that, I’d start by saying that “existing customers drift away for a variety of reasons over the years and if you are not connecting with new ones you are already going out of business”.
Read this article on how to track your customer impressions and likes using digital tools. These tools will help you better understand how to retain existing customers and gain new ones.
4. Haphazard Accounting
Be reminded that if you don’t have your back office paperwork in order, it simply means that your venture is on a slippery slope and it will soon slip in.
Sadly too many business owners have a head-in-the-sand approach to their business numbers, says Carl Taylor, founder of Business Builders Academy.
Listen, this can be corrected if you act fast to engage an accountant or do more DIY bean-counting. You don’t need to be a math pro, all you just need to know is which numbers are important and what they mean.
Here are the biggest financial mistakes you need to avoid in your business, if you don’t want it to die sooner or later.
5. High Staff Turnover
Every time an employee leaves, it is an intellectual capital loss, and often the loss of customers in service industries including hairdressing, dentistry, and accounting
“You have to teach someone all over again and that takes time away from growing business,” Korolak says.
All you need to do when someone (employee) leaves you is to survive it and forge ahead with life. You don’t really have a business if it is tied to one person including yourself, and create a culture in which people want to stay.”
So try to work over this very problem so as to avoid seeing your business dying sooner.
For quick head up, check out these qualities of a successful and strong team in businesses
6. Dysfunctional sales
Cian McLoughing said Poor pipelines, problems converting sales or trouble retaining customers can quickly sap life from your business and this one of the most important things you should fix very quickly.
Whenever you provide unclear service of sales, clients and customers will begin to see your business or startup as an unserious kind and, this is really a pinch to your venture.
Rounding Off – 6 Signs Your Business is Going to Die
What are you going to do now? I’m sure that having known all these 6 signs that can quickly trigger your business’ failure, you’ll always endeavor to analyze your business on daily basis to know its capacity and functionalities so as to avoid crashing.
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