Especially if this is your first business venture, you may not be prepared for the first signs of trouble on the horizon.
But when you do spot them, you need to know how to act. One of the leading causes of start-ups crashing and burning in their infancy, has been from entrepreneurs not heeding the signs and changing course of the ship, when they see an iceberg approaching.
- YOU HAVE NO ACTUAL MONEY
Probably the biggest warning sign of them all and the one that should be so obvious to spot. And yet so many companies and new businesses simply fail because of a cash flow crisis.
Managers and owners can often bury their heads in the sand and point to orders and sales coming in, but if that is not translating into actual currency in your till, then it’s all for nothing.
If you have got a cash flow problem, then you really need to take steps NOW to identify the cause and thereby work out the solution.
Do you need to get more proactive with clients who don’t pay or consistently pay late? Do you need to look carefully at your outgoings and see if you can save money on your rent, utilities, transport etc.
Whatever needs doing, it is down to you to find it out and then sort it out PDQ. Because no one else is going to!
- YOUR SALES ARE SHRINKING
The causes of this could be manifold. But if you believe that your actual market size is shrinking, then you need to take action now.
Your business may need to diversify and take another path in order to keep going.
The world is constantly changing and businesses that aren’t prepared to adapt to the new, will die.
It’s brutally simple. If your services are operating in a crowded market or there is simply less demand for them, it might be time to branch out and think about something new to offer.
Ultimately your business needs to do more than undercut your competitors. It needs to offer something else as well. Find your unique selling point. If it is no longer unique, add to it so that it is.
- YOUR MANAGEMENT TEAM NEEDS TO BE ROCK SOLID
The team that you surround yourself needs to be the absolute best it can be. And when you are running your own business, this can be a tough call.
Our successful entrepreneurs have all had to make heart-breaking decisions when it comes to staff members. But think on this, saving one poorly performing team member from redundancy may come at the expense of the entire business collapsing.
We have lost count of businesses that failed, because of some poor management choices and often those managers were the close family members or friends of the owner.