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Here’s how to tell if your business is
headed for the undertaker.
Business deaths are rarely sudden. Like
lead characters on TV soapies, few small
businesses die overnight but are typically
drawn out affairs with lots of warning signs
on the decline.
So why do thousands of ventures collapse
every year across Australia, terminally
unprofitable and cash flow starved?
Rhondalynn Korolak says it’s prudent to
look out for early warning signs a business
is failing.
Business coach and founder of
Imagineering Now, Rhondalynn Korolak,
says it comes down to failure to detect
commercial illness early.
“Almost every business will experience
financial distress or pressure at some stage
and the key to survival lies in the owner’s
ability to diagnose problem areas and take
corrective action quickly,” Korolak says.
So what are the symptoms which, left
untreated, will prove terminal?
Here are six symptoms from The Sydney
Morning Herald of a weak business pulse:
No new customers
You started with gusto, networking like
crazy and marketing at every turn.
Business grew. Then you stopped hunting
jobs.
The earliest sign a business is failing is
when there have been no new customers
for six to 12 months, according to Iain G.
Mackenzie, author of business titles
including Results in a Minute.
“Existing customers drift away for a variety of
reasons over the years and if you are not
connecting with new ones you are already
going out of business,” Mackenzie says.
Prognosis: Can be treated. “Drop the
employee mindset ‘no, we have enough
business, I am busy enough, I don’t want any
more customers’ and start turning things
around,” Mackenzie says.
Haphazard accounting
Do you know how much money is in the
bank, moving in and out of the bank and
what you do that actually makes you
money?
If you don’t have your back office
paperwork in order, your biz is on a slippery
slope.
“Sadly too many business owners have a
head-in-the-sand approach to their business
numbers,” says Carl Taylor, founder of
Business Builders Academy.
“You don’t need to be a math whiz, you just
need to know which numbers are important
and what they mean.”
Prognosis: Good, if you act fast to engage
an accountant or do more DIY bean-
counting.
Dodge commercial rot by making sure your
business produces timely financial
statements and reports, invaluable quick
references for calculating and forecasting
your business’s all-important cash flow.
Serial price cutting
“Discounting is a major problem in small
business as everyone seems to think they
need to do it,” Taylor says.
“But they keep eroding their profit margins
until they just are not sustainable – no more
business.”
Prognosis: Curable if you can stop
competing solely on price, increase prices
and add value where possible. Expert and
excellent service goes a long way to
appeasing customers querying a price rise.
Debt dependency
Over-reliance on borrowed funds to pay
loans and meet other business costs
(wages, inventory, leases etc) means your
business is going to flat-line sooner than
later.
“If a business is experiencing difficulty
paying creditors and tax obligations and has
a continual need for capital injections and
loans because business is not generating
enough operating income internally – often
selling but not collecting payments quickly
enough and relying on credit cards to cover
this period – these are sure signs of
financial crisis,” Korolak says.
Prognosis: Certain death – unless you
reduce debt, immediately.
Inject your sick business with new life by
collecting outstanding debts, renegotiating
debts, contributing more equity via
partnerships or your own money, or selling
unused inventory.
Dysfunctional sales
Can’t convert a prospect to a done deal?
No repeat business? Sounds like sales
woes are killing your business.
Poor pipelines, problems converting sales
or trouble retaining customers can quickly
sap life from your biz, says director of
sales consulting/advisory firm Trinity
Perspectives, Cian McLoughlin.
Prognosis: “Death by a thousand cuts” if
business owners do nothing, McLoughlin
says.
“The good news is there is much a business
owner can do for low or no cost to remedy
these problems and the first thing is asking
‘where are we going right, and wrong?”’
High staff turnover
Losing staff hand over fist? Definitely time
to run an HR health check.
Every time an employee leaves it is an
intellectual capital loss, and often the loss
of customers in service industries including
hairdressing, dentistry and accounting.
“You have to teach someone all over again
and that takes time away from growing
business,” Korolak says.
Prognosis: Recovery likely if you fix
underlying workplace culture problems.
“If someone leaves you have to survive it;
you don’t really have a business if it is tied
to one person including yourself, and create
a culture in which people want to stay.”

Nice one

True talk

Nyc post

inspiring