Many businesses close up shop due to financial problems. In the hustle of operating a small business, it’s easy to ignore warning signs pointing to the company being in financial trouble. Rather than writing off red flags as something else, it’s vital that you recognize the problems and address them early on. The following are four warning signs that indicate your business may be in financial trouble:
- Sales Have Slowed Down
Most businesses have cycles so there are times when sales slow down. But if your sales have been slow for quite some time, and growth has been non-existent or even on the decline for a significant period of time, this is more than just a “cyclical problem.”
- Constant Problems with Cash Flow
You are constantly behind on invoices and late paying your bills. Your expenditures exceed incoming revenue. It’s a struggle just covering overhead, like payroll and rent. If this sounds like your business you’ve got a cash flow problem.
- Unhappy Customers
If you are getting a lot of negative online reviews, customer complaints, or an increase in refund requests, this is a strong indication that you have a serious problem with dissatisfied customers. This is not something you can afford to ignore. Unless you resolve the issues that led to the negative reviews you’ve received you will lose existing customers and new ones will be few and far between. Consumers have many choices and they will not flock to businesses that do not place customer satisfaction as their top priority.
- Business Has Lost Momentum
Are you continuing to attract new business? Do you get referral business from existing customers? Have you stopped hiring when someone leaves or been forced to cut back on employees’ hours? Are you making any changes to your products and/or services to provide customers with what they need? If you answered “no” to most of these questions it indicates your business is stagnating with little or no forward momentum or chance of growth.
How To Turn Things Around
If you recognize any of the signals that your business may be in financial trouble, you need to take immediate action. Look objectively at your business and its practices and determine which areas you need to address. Here are some steps you can take to turn things around:
- Bring in a reputable outside business consultant, like a financial planner or an accountant. Let them make an objective assessment so they can make the right recommendations for getting you back on track. Vow to never repeat your mistakes by aggressively implementing better business practices to revitalize your business.
- Communicate with your employees. This will give you insight into what they’re hearing from customers so that you can better address the issues. You also want to find out from if there are any morale problems and what you can do to change that to ensure employee retention.
- Evaluate the comments you’re getting from customers and employees. Find ways to mend fences while incorporating new practices to keep these problems from recurring. You may have to change all your processes and implement new procedures for handling customers. Provide training so everyone is up to speed on how they should treat customers and resolve any issues.
Seek out short term business funding
- While you’re working on the above points to turn the business around it may be beneficial to secure a short term business loan. This can provide you with some breathing room while you work on fixing the issues within your business.
If you’re looking for some funds to tide you over through some slow times in your business Unsecured Finance Australia can help with a unsecured business loan, have a chat with our team today.