Timing is crucial when you sense that your business is in trouble, experiencing a financial crisis or under-performing. It is important to act quickly and decisively to avoid even greater problems, such as filing for insolvency or bankruptcy and to avoid legal issues that may arise from trading insolvent or from unpaid taxes and debt. Acting promptly can also save your business from closure.
Your business will show danger signs that it is under stress. Do not ignore these early warning signs. In this article, we discuss the 8 signs that your business is in trouble.
1. Your sales fall below your quota or target. If you are struggling to find your next sales and have been experiencing several months of low sales, then you may not get the revenue you need to make profit or to merely break even. Having reliable sales projections and a consistent flow of sales is imperative to the growth of any business. Marketing and lead generation must be effective in order to ensure healthy sales and revenue. Lack of sales will inevitably translate to low revenue, low profit and an increase of debts to suppliers, financiers and the tax office.
2. Customer retention is low and you are unable to convert prospects. If you are losing more customers than you are gaining, then it is only a matter of time that you will have very few customers to get your revenue from.
3. Cash flow is inadequate. Cash is king. The ability to generate cash is an important key to business success. Without strong, positive cash flow a business will never thrive and grow. While it may be normal for some businesses to experience fluctuations, it is critical to be able to balance the high and low cash flow seasons. If cash flow continues to fall, then the business will not survive.
Some final words
Recognition of these early warning signs that your business is in trouble and the decision to act quickly and get the help you need can save your business. It would be helpful to partner with a professional and certified turnaround specialist who can work with you to achieve a successful business turnaround for your company.