No one wants to think the worst, but if you see signs that your business may be heading downhill, you need to get a move on and seek professional help. Running for the hills could be one of your options, but you need to face this difficult time head-on to prevent further losses.
Akin to having an illness where a patient goes to a specialist to have a better understanding of their condition, you, as a business owner, should consult a professional to find out whether your business is healthy or not. This way you can start thinking about your options. It might be one of the most difficult realities to accept but knowing what to look out for can make a world of difference.
If you think your business is in trouble, there are signs you should be on guard about:
1. Dwindling sales
There are several factors contributing to low sales, but if this has been going on for some time and the business does not have the necessary cash flow to sustain itself, it can be quite alarming.
2. Company bills are not paid on time
When the cash flow slows down and you are unable to pay bills when they are due, the business might be heading down a dark path. If your debts are growing and you’re juggling your cash, chances are you will lose your important suppliers, or be required to go on a cash-on-delivery basis, which could have an impact on the business.
3. Salary raises and staff promotions are a thing of the past
If you’re finding it hard to reward your top employees by way of a salary raise due to insufficient funds, you might lose them sooner or later. This means you will have to hire new staff to train and before they get up to speed, the efficiency of your business may have already suffered.
4. Layoffs and pay cuts
Having to let go of your employees because there are not enough funds to pay their salaries means you are putting an effort to save the business by holding on to your remaining financial resources. This is a short-term solution but one that stunts the company’s growth by getting rid of your most valued resources – your people.
5. No more freebies
If you can no longer offer your staff the incentives they used to enjoy to keep them motivated, it likely means your business is not making enough money to support those kinds of benefits. Given that motivated employees and productivity have a direct correlation, this is not looking great for the business.
6. Sudden slowdown in operations
A sudden slowdown in operations could mean there simply isn’t enough money to get things done in the way they should be, or customer demands have also gone down. Either way, these are not affirmations of a healthy business.
7. Projects are delayed
There are several contributing factors to why a project gets delayed or postponed especially in the post-pandemic times where supplies can get scarce. However, if the delay is due to financial constraints rather than supply issues, this is another sign your business is headed in a negative direction.
8. Hiring freeze
A sudden stop of new hires can be a sign that the business has stopped growing and that means there isn’t enough income to bring on new staff.
9. Employees start to leave
When longtime employees holding key positions start to leave, this could be a sign they no longer see themselves growing in the role. This is the time when you start asking yourself what their motivations are for walking out and how this impacts your business.
10. No long-term business plans or goals
A healthy business is always on the lookout for opportunities to grow and constantly strives to meet its customers’ needs. If you feel like your business has become stagnant, has stopped planning for its future, and makes decisions based on the successes of the past, then it might be failing.
If you’re a business owner, a director, or a shareholder of a company, a proactive attitude at the onset of an issue could save your company from falling off the cliff. Having the “she’ll be right” attitude won’t cut it in this situation. Ignoring the signs might spell disaster for your business. You must muster the strength to look at your options before you get dragged down deeper.
PKF Corporate Recovery & Insolvency is a specialist insolvency, restructuring, and turnaround firm which can help you survive financial difficulty and assist you with the best solution possible based on your situation. Know your options and make an educated decision for your business. Call us now on +64 9 302 0521.
Learn more here: https://www.pkfcr.co.nz/
By: Diana Subido – PKFCR Team Administrator