When you were an employee it was easy to see if you were working for a failing company, but as a company owner it's much more difficult to admit. CEO's and entrepreneurs are always full of creative ideas and passion, but this can unfortunately lead to many false assumptions and mindsets. You have to be sure you're realistic about your business if you want to succeed overall, and sometimes this means taking the warning signs of a failing business seriously instead of holding on to hope.
8 Signs That Tell You Your Business is Officially Failing
Although you may not be able to admit that your business is failing, there are warning signs that should help tell you it's time to move on to your next project. It's OK to have a failing business--Henry Ford did it, so did Donald Trump, and many others--but it's not okay to keep that business going just because you're hopeful. If you see several of following warning signs, it's probably time to pack it up:
- You haven't spoken to a potential customer in over one month.
You should constantly be talking to potential and new customers even as the CEO. If this hasn't happened, it either means that your company does not have what it takes to compete in the market or your employees (or you as a boss) are not pulling their weight. Either way this is a huge problem and it means your company is on it's way to failing unless you can find a lot of money in a short amount of time to make serious changes.
- No one is talking about your business.
This goes along with the last point. If no one is reviewing your business, if your community doesn't know you exist, if you aren't showing up on resource lists if your friends and family are not mentioning your business when appropriate, something is seriously wrong.
Particularly concerning should be online reviews. Reviewing businesses online is the norm in 2015, so at the very least you should start to see more and more reviews as your business continues to evolve. You may even be asking for reviews, which you can learn more about here. If you're making the effort to try and improve your reviews and they still aren't happening, people may just not have a strong enough opinion, and that's a big problem.
- You keep making the same mistakes.
CEOs and entrepreneurs don't do this on purpose, but if notice that you keep making the same mistakes without even realizing them as they're happening then your company isn't doing well. You may think you've solved a problem only to see the exact same outcome that you keep seeing time and time again. Whether this be through Analytics or through client responses that keep sounding redundant, this is a red flag. If you haven't been able to figure out why you're making the same mistakes over and over again, it likely means your business is on its last legs.
- You're not paying your bills on time.
Plain and simple, a successful company is able to pay the bills on time. This should be priority for a business and if for some reason you cannot pay the bills you used to be able to, this doesn't mean you're in a slump. This is a serious issue that needs immediate attention and reflection on your part as CEO or manager.
- The business is complacent and hasn't made a change in months.
Again, this is something that can easily go unnoticed by a CEO until it's too late. If you look back on your last year and realize that you haven't changed anything, even when your company is sitting on top and seems to be doing well, your business is probably on its way to failure. Even the top companies have to experience change and innovation in order to keep moving forward. Complacency is one of the worst things that can happen to a company, which is scary because it's easy to miss.
- You have a high employee turnover rate.
If your employees aren't happy you're going to spend a lot of time training and interviewing new employees only to have them leave again. It's a vicious cycle and is a huge warning sign that your company is in trouble. There are several reasons why this may be happening--you're not giving raises frequently (or high) enough, you're not holding employee reviews, you care more about money that the well being of your employees, etc.--and unfortunately improving employee morale can take a long time to fix.
If you find yourself in this situation, there is a good chance you won't have the time or resource to dig yourself out before your company officially falls. You can learn more about boosting employee moral (before it's too late) here.
- Hiring freezes and employees playing musical chairs.
If you're finding that when one employee leaves you don't have the budget to hire someone new so you're putting extra work on a current employee's plate, you've got a big problem. The same can be said if you keep switching employees to different roles within the department (or even switching departments entirely). This is not the way to run a successful business and will cause you big problems in the end. This is also apparent to your employees, which goes along with the last point and also brings us to our next point.
- Others are noticing that the company is failing.
This is the end-all-be-all for your company. Keep in mind that those who are not the CEO are also noticing if the business if failing. Employees, investors, and consumers can use some of the warning signs above to make decisions that are best for them. No matter what you do to keep your business afloat, you need everyone on your side in order to succeed. If these signs become too apparent, there isn't much you can do individually to bring the company back to life.