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Simple Ways to Determine if Your Small Business is in Trouble

Every small business is bound to see ebbs and flows. These could be due to seasonal changes or the ties of a business’ product or services to varying seasons. There are many reasons why a small business may see increases and decreases in cash flow throughout the year or over several years. However, it is also important to know the signs that your small business isn’t simply in a “slow” period, but that the business is trekking towards ultimately failing. Here are the key signs that will help you realize when a small business is not sustainable.

Sales Are on a Steady Decline

This one is obvious. In order to stay viable, your small business must be turning a profit in order to stay open. It is important to be consistently tracking each and every sale, as well as overall sales volume, extremely carefully to determine if sales are in a slow period, or if sales are becoming extremely stagnant, to noticing when sales are truly on a decline.

You Are Losing Key Employees

While some employee turnover comes with running any small business, losing key employees (especially ones who have been with you for a long time) is a huge cause for concern. Additionally, pay attention to the reason that employees are leaving. It could be as simple as a need for more ergonomic desk chairs, or something more complicated that needs to be addressed.

Employees are Struggling Financially

The most common reason employees leave a company is because they find a similar job elsewhere with better pay. Take a look around to size up the financial security of your employees and determine whether or not they are earning enough money. Finding out an employee is consistently utilizing cash advance loans to pay for groceries in between paychecks is a good sign he needs a raise. Otherwise, he may soon be headed someplace else.

Your Website Traffic is Down

It is absolutely essential to closely monitor your website traffic volume as well as key statistics, such as how long people stay on your website and how many pages they view before leaving. Even if your company does not have an e-commerce component, most people in the digital era will vet a company online prior to making a visit or a purchase decision. This can be easily done by utilizing free software like Google Analytics.

There is No Buzz Surrounding Your Business

There should always be people talking about your business. This can be in a wide-scale component, such as having press releases being published or people approaching your team members to discuss your business. It can also be as simple as individuals leaving positive reviews on social media sites or on sites like Yelp!

You’re Borrowing from Peter to Pay Paul

This is one of the biggest signs that show when a small business is no longer sustainable. However, it is also one that most frequently goes ignored. Actions such as using one card to pay off another, or needing to wait until the very last day to keep the lights on may seem like little things, but they are definite signs that your small business is in trouble.

You Have Less and Less Competition

While you may initially read that sign as a positive thing, it most surely is not. If the market for your product or service is growing in demand, you should be seeing more competitors pop up, rather than competition dying out.

These signs are all surefire ways to know when your small business is in trouble. However, there are ways to turn it around, even after you notice these symptoms within your small business. There is a wealth of resources that outline specific instructions and best practices on how to keep a small business from closing. By paying attention to these signs of turmoil, you will be better equipped to get ahead of the issues and to right the ship to success for your company.