As a businessman or businesswoman, how can you tell if your business is dying? What are the signs that your business is dying or going out of existence?
Running a successful business model that stands the test of time, is one of the most demanding exercises ever known to man. From ancient times, when humans began to do business, up until present day, businesses – whether small, medium or large scale – have experienced the two phases: failure and success.
Many businesses that are thriving today were once on the verge of failure and bankruptcy. But by careful application of some business strategy, the management was able to revive the dying businesses and get them back on track.
Everything that determines whether a business succeeds or fails is largely dependent on the amount of physical, emotional, psychological, mental, and most importantly, financial work put into it. Each of these activities demand a high level of exercise and consistency in order to achieve results.
At any point where the above is lacking, it begins to pose a threat to the growth of such business. It is thereby imperative to pay attention to every little detail and work hard to nip whatever deficiencies in the bud before the situation becomes irredeemable.
Are you a business owner, a startup founder, a manager, or an employee who is worried about the declining state of the company/business? Are you wondering if your business is dying, or merely facing a normal economic downturn? This article will explore twelve (12) signs to show that your business is dying, providing practical insights on how to evaluate your business, and revive it.
Let’s take a look at 12 signs that your business is dying.
1. Inconsistent funding: For humans to survive each day, they need food and water. When this is lacking, it causes a breakdown in bodily function, which can result in unproductivity. The same applies to business. In order to sustain a business and keep it moving, there must be consistent cash flow. If there are no funds to keep the business afloat, or there’s an inconsistent supply of funds, it is a good time to know that the business is on the brink of death.
2. Poor sales: Every business is majorly concerned with making sales, because every business is built on a consistent sales funnel. Sales bring profits, and profits determine the success of a business. When sales are poor, the business is threatened, and if nothing is done about it, it is likely for the business to die off in no time. As a business person, when you notice a consistent decline in sales, watchout, because it may be a clear indication that your business is dying.
3. Poor accounting: It is one thing to have the funds to run your business, or even make great sales on a daily basis, but everything comes crumbling down in seconds if you cannot account for what goes in and out of your business. Know the numbers, understand what they mean and account for them. If possible, get an accountant.
4. Fund Mismanagement: Mismanagement of funds is one reason for, and sign of a dying business. When funds meant for running a business is being diverted into other things, it means the business is on the brink of decline. And sooner or later, it will die. When the funds for a business are mismanaged, it is a clear sign that calamity is right at the doorstep. When funds are not properly managed, the business purpose becomes defeated.
5. Debt: A business that is dependent on borrowed funds to pay salaries, loans, tax, goods, etc., will not last. When your business begins to depend on debt to run, it is only a matter of time before it packs up. When a business starts running on debt, it’s a clear indication that its end is near.
6. Poor reviews/testimonials: What are people saying about your business? Every business thrives on the good reviews of their customers. When the testimonials about your business are constantly negative, it is a sign that people are not satisfied with your services, leaving you with two options: either improve upon your products/services, or get ready to pack up!
7. Loss of customers: Every business occasionally experiences high and low patronageL. But losing customers on a regular basis can affect businesses drastically. When you notice a fall in the customer flow or number of followers, you do not need anyone to tell you that your business is on the brink of collapse. According to an article by Forbes, if groups of people are leaving your business, then check yourself!
8. Lack of innovation: Every business needs to evolve for it to reach great heights. When your business model lacks consistent, creative and innovative ideas, it is likely to remain stagnant, and when businesses stay stagnant, they die off in no time. When a business isn’t improving upon their products/services, they will become stagnant, and decline. When you see a business that is stagnant, then you can be sure it will fold.
9. Incompetent and Poor work force: A functioning business model is as good as the labour that goes into it. When the output from employees is consistently poor and nothing is done about it, the business is only one step away from crumbling. The key is finding out why it is so, and addressing it immediately. Poor work input will result in substandard products or services, which will eventually result in poor patronage and reviews, which will then spell doom for the business. When you notice a drop in value and quality in a company’s products or services, don’t be surprised if that company goes out of business.
1o. Loss of focus: Before starting out a business, there are achievable set goals that help the business stay on track and measure progress. A loss of focus on the business’ goals can jeopardise the business in the long run. When you begin to lose focus on your goals, restrategise.
11. Overexpansion: Expanding a business is not entirely a bad idea, but there must always be a need for it and must meet the demands of the market. When you see a business creating lots of branches or expanding too fast, watch it. Business expansion is sometimes not an indication of growth. A business that expands just for the sake of it will lose momentum with time and could die a natural death.
12. Late payments from customers: Of course, you want to have lots of orders which is good for business, but it becomes a problem when customers do not pay on time. It affects the cash flow, and subsequently the business. It is important to put stricter payment policies in place to avoid disaster. Many people have gone out of business because they were running it on credit. People patronize them, but do not pay. Do not be too eager to make sales to the extent of selling substantial amount of goods or services on credit. Minimize selling or operating your business on credit
All the signs mentioned in this article do not outrightly kill the business from the first day they surface. Businesses die when these signs are not given adequate attention and left to linger on far more than it is necessary.