10 Signs That Your Business Is Heading For Trouble
Running a business is hard work. There’s never a time when there’s nothing to do. So, it can be hard to stand back and get some perspective on whether or not you’re on the right track. If any of these tell-tale signs ring a bell, then stop, take a moment and think about where you’re heading.
1 One client could sink the ship
If your business is overly dependent on one big customer, it’s not really your business – it’s theirs. You’re at the mercy of their decision-making rather than your own. Take a look at your customer mix, if more than 60% of your income comes from one client, you need to get your thinking cap on to reduce your dependence on them.
2 One employee could sink the ship
Is there someone in your business whose mind is the resting place of your most valuable business information? If there’s a key person in your company, you need to take steps to ensure their work is shadowed and their knowledge is captured.
3 There’s a hole in your bucket
Winning new customers is expensive. Even if you don’t spend vast sums on marketing, there’s always time gone into securing a new deal. If new customers slip through your fingers, by not staying with you for long enough to make a profit, you’re throwing good money after bad.
4 There’s only one tap running
How do you generate new customers? If you’re mostly or wholly reliant on one source of new business, then there’s cause for concern. Imagine that tradeshow stops running, your telemarketer goes off ill, a key referrer goes out of business or your Adwords suddenly jump in price… Whatever the source, having just one is a risky strategy. You don’t want your business drying up because someone turned off the tap.
5 Busy doing nothing
How much does your business earn for every hour you and your team put in? Understanding what people are doing with their time is essential to maintaining profitability. Are you using expensive people to do cheap jobs? A little analysis of what people do with their time can help you make sensible decisions about training needs, job allocation, and outsourcing.
6 Busy doing anything
Are you doing the right kind of work? Lots of small businesses keep themselves afloat by being a bit of a ‘jack of all trades’ – but this can mean that you end up becoming known for the kind of work you don’t actually want to do, or isn’t particularly profitable. If you can’t describe the wrong, and the right, type of work for your business you’re unlikely to be able to find more of the latter.
7 No numbers or know your numbers?
I know, I know – you’re a creative soul… But are you paying the bills? Getting on top of your numbers is essential in addressing all of the points above. If you can’t immediately bring to mind your business’s vital statistics, then you can’t make informed decisions.
8 Yo-yo new business dieting
Is marketing something you do if and when you find the time? Many small businesses find themselves head down delivering client work, and whilst doing so they don’t find time to promote their company. This means that when one project is finished they hit a dry patch. It’s the marketing equivalent of a yo-yo diet, and is about as good for your business health as it would be for your body. If you find yourself staring down an empty sales pipeline each time to lift your head to breathe… then you need to work on finding a low level set of marketing techniques that just keep going come what may.
9 Duvet days
A sure fire sign that something’s not right is a spike staff sickness. They could be working too hard, demoralised by work they don’t enjoy, or they could be bored of twiddling their thumbs as they wait for the next project to land. Either way, if a few of your team start going off sick, it’s time to ask some questions about how your business is running.
10 Got that Monday feeling?
Now, it’s not scientific, and I can’t put a metric on it… but if you, the business owner, hate Mondays more than you used to, there’s something wrong. Running a small business is hard work. But, if you get it right, it’s also exciting and rewarding. If you’re not feeling this, it’s time to get some perspective.
Recognising the warning signs enables you to do something about them. So, if any of these look familiar it doesn’t mean you’re on the inevitable path to failure. It means you have the power to change it. The business-owner who is able to acknowledge and address a tricky issue is in a much better position than the one who can’t – or won’t – see the signs.
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