5 Key Warning Signs That Your Company Might Not Being Doing as Well as You Had Hoped For

 

 

 

As an Entrepreneur, you will have many challenges in start ups or even when your in the business for a while. Below we discuss key warning signs that you as an entrepreneur might not be doing well.

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1. Continual Lack of Cash Flow

If you’re noticing a trend of having to operate within the strict confines of an inflexible budget every month, this could be the first sign that the business is in dangerous territory. When your finances allow little margin for error, even one mishap could lead to a chain of events that results in late bill payments and/or the inability to cover essential operating costs.

2. Poor Client Retention and Customer Satisfaction Rates

 Instead of waiting until your company starts running at a loss, it is wise to take a proactive approach in boosting client satisfaction rates and improving your outreach efforts. Be sure to ask for input and heed the recommendations of your customer base on an ongoing basis. It’s also wise to utilize multiple advertising venues and network with relevant business in your region or niche. If you haven’t yet established an online presence, then doing so would be a good starting point.

3. Consistent Inability to Meet Financial Obligations

If the business is repeatedly in the position of making late payments and is being pressured by bill collectors and creditors, then not only is your company not doing as well as you’d hoped for, but it may literally be on the verge of being taken to Court. Even if you’re able to continue operating with delinquent debts, you won’t be able to avoid the damage incurred on your business credit rating, which will drastically inhibit your ability to obtain crucial financing in the future.

4. Expensive Investments and Nominal Returns

If you’re having to spend thousands just to see returns of hundreds this could be a sign that your business is teetering on the brink of insolvency. Even if the situation is currently profitable, with such large investment requirements it is only a matter of time before operating expenses become overwhelming. Ideally, you should be generating a net income that is equal to at least 2-3 times the amount of money that you’re putting into the business.

 5. Struggling to Stay Competitive

Regardless of which industry you operate in, there is sure to be other companies that are providing similar offerings. If you’re noticing that your competitors are consistently attracting more prospects and/or you’re struggling to keep the clients that you have, then this could be a sign that you need to do some immediate competitive analysis. The equation is simple – if you’re unable to cater to a decent share of the market then eventually your business will go under because your competitors will be in a better position to lower their prices and provide a more optimized range of products/services.
Your goal is to separate yourself from the competition by ensuring that you’re providing unique value. Take a close look at the practices and features of your leading competitors, and instead of trying to duplicate their success focus on going above and beyond what they have done. This may require additional effort on your behalf, but in the long-run it will ensure that your business is able to remain a sizable presence in its industry.