How do you know your business is failing? Here are some tips to guide you:
No new customers
As the CEO, you should constantly be talking to potential and new customers. If this has not happened, it either means that your company is not competitive enough in the market or your employees (including you, the boss) are not pulling their weight. Either way this is a huge problem and it could mean that your company could fail unless you can find customers in order to continue to generate revenue.
No public exposure
If your community doesn’t know you exist, if you are not listed as a resource in companies in your industry, if your friends and family are not promoting your business to create awareness to draw customers, then your business will be invisible, and it is a sign that something is seriously wrong. In other words, your business should have some exposure, no matter how little to attract your target market.
Repeating mistakes
CEOs and entrepreneurs do not do this on purpose, but if you keep making the same mistakes without realising it, then your company is not doing well. You may think you have solved a problem only to see the exact same outcome time and time again. Whether it is discovered by analysing data or through clients’ responses, this is a red flag. If you haven’t been able to figure out why you are making the same mistakes, it likely means your business is on its last legs.
Piling unpaid bills
A successful company is able to pay its bills on time. This should be priority for a business and if you cannot pay your bills with the ease you did in the past, your business could be in trouble. Although it does not always mean your business is about to fail; however, it may mean that your company is cash strapped with little or no inflow of revenue. This is a serious issue that needs immediate attention as CEO.
Complacency
If you look back on the previous year and realise that you have not changed anything, say introduced an improved product or service, including the time your company was doing well, then your business is probably struggling. Even top companies have to innovate in order to keep moving forward. Complacency is one of the worst things that can happen to a company.
High employee turnover
If your employees are not happy, they will leave, and then you would likely have to spend a lot of time training and interviewing new employees only to have them leave again. It is a vicious cycle and a huge warning sign that your company may be in trouble.
Heavy debt
If you are neck deep in debt, it might be a sign that your business is on its last legs. Some debt is necessary, but when it is excessive, it prevents you from turning a profit, which is the objective of your business. At this point, you should ask: if I didn’t have this line of credit, will my business survive?
No revenue and profits
You have existed for a few years and not generating revenue and profit. Granted that it takes three to seven years on average to become established; however, if after that period, your income is still a flat line (and continues to be so despite innovative interventions through customer feedback to improve on your products and services), it might be time to face the unsavoury fact that your business is failing.
We hope that you find this thought provoking and useful. Next week, we shall talk about how to save a failing business.