Tuesday, February 28, 2012

8 Signs That Your Business Is In Trouble

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.
4. You are unable to convert accounts receivable and inventory to cash. Check the credit terms you are granting for your accounts receivable and check the quality of products being delivered to you. You must be able to convert these promptly to cash as this can also affect your cash flow.
5. Your employees are unhappy and lack motivation. Most employees can sense that the business is in trouble. It can start with salary delays or cutting off of bonuses and benefits. If employees sense that the culture, environment and atmosphere of the company have become bleak, then this will have a direct impact on their productivity and quality of performance. Without the results you are expecting from your staff, your business will suffer.
6. Upper management cannot communicate with the staff. When there is breakdown or failure in communication, management will not be able to identify conflicts in the everyday operations of the business. When conflicts are not identified, they will not be addressed or solved.
7. You dread going to work every day. Your passion for your business is gone. You are always exhausted but you feel that you can never take a vacation because business functions solely depend on you. If your business depends on you alone, then it will never grow further from that. You must have effective management and best practices in place so that even if you are away, you can be certain that your business is healthy and growing in revenue.
8. Your company is just barely surviving. The growing number of unpaid suppliers, outstanding receivables and low number of sales can take their toll on even the most steadfast business owners. Your business is not built to just "survive", it is meant to grow and prosper.

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