You are not immune to failure. 18% of small businesses fail within their first year, and 65% shut down before their tenth year in business.
But if you’re saying to yourself, “My business is failing,” you’re on the right track. The first step toward reversing your business decline is to recognize that your business is failing. The second step is to pinpoint the reasons why your business is going down.
There are several reasons why thousands of businesses shut down every year, and some businesses experience multiple problems at once. Here are the main warning signs for why your business is failing.
Stalled Business Growth
You may experience moments where your business growth slows down or hits a plateau. It’s okay if you go through short-term slowdowns or plateaus, especially if you’re in a recession or unstable times.
However, if you experience a year of stalled growth, your business is not likely to succeed. You are also unlikely to succeed if you don’t experience sustained growth within a year of launching your company. You must reevaluate your situation and figure out what you need to do to start scaling a business properly.
Debt
As your business starts, you may take out a loan or lease to get equipment. It’s a common practice to take out a long-term loan, so don’t panic if you still have debt after a few months.
Debt becomes a problem when you have no clear way of paying it off. If you don’t have a path to pay back your creditor within a year, you must find a way to make a higher profit. An easy way is to increase your prices for the short term, giving you a quick influx of cash you can use to pay your creditor.
Falling Sales
Falling sales are an obvious sign that you have a failing business, though it’s not a perfect way to detect weaknesses. Your sales may fall because you are running a weak marketing campaign or have a lot of competitors. You may not be doing anything wrong, but your consumers may not want to spend money due to a recession or social turmoil.
Talk to your sales team to see how they are doing and what may be causing your falling sales. Find more customers by conducting market research on who you should sell your products to and running more advertisements online.
Your sales department may be doing well, but you may have higher costs and expenses than you did before. In that case, you need to reduce your costs by finding cheaper suppliers and ways of manufacturing your products.
Inferior Products and Services
Before you manufacture a product, you should conduct research on your competitors’ items. Your product should have a clear strength over its competitors, like helping your customers accomplish a task faster or for less money.
Be diligent with how you acquire supplies for your products and manufacture them. Purchasing low-quality products or rushing the manufacturing process can lead to defects that harm your products’ market potential.
No Clear Vision
A mission statement explains the purpose of your company and why you started it, besides making money. If your company makes toys, your mission statement can be about helping children and families create fun memories. If you don’t have a mission statement, you may find it difficult to attract customers and employees.
Low Morale
Low morale is a problem that requires your immediate attention. If you’re not creating a productive and respectful place to work, your employees will quit. Customers are inclined to leave if they hear that you do not respect your employees or give them the benefits they deserve.
Give ample paid time off to all employees at your company. Connect them to resources like mental health counselors so they can get assistance when they need it.
Each employee should have opportunities for promotions and bonuses. You should also pay for training, especially if you buy new technology for your company.
Lack of Control Over Your Company
Lack of control can be subtle or obvious. You may struggle to make decisions in a timely fashion, or you may issue orders that others don’t listen to. You may get into arguments with people on your executive board about what to do, or they may not provide enough input, meaning your decisions aren’t based on concrete evidence.
If you are indecisive or need help issuing clear decisions, you should take classes like Elite Mastermind to learn about leadership, entrepreneurship, and communication. You should also read books on running companies and attend conferences so you can connect with and learn from other business leaders.
If your executive board is inadequate, you should find new executives to join your company. Talk to your network and see if there are any qualified professionals looking for work. You can also make free job postings on LinkedIn, Indeed, and other platforms.
Why My Business Is Failing
“My business is failing” is something that nearly all business owners say. The main problem is a lack of revenue due to stalled growth, high debt, and collapsing sales. But bad products and weak company culture can create a failed business.
You must widen your market to attract more customers and sell more products. Give your company a reason for existing and give your employees reasons to work for you, like high-paying salaries.
If you keep studying business management, you’ll have a successful business in no time. Read detailed guides on running businesses by following our coverage.
