Three Signs of a Failing Business
No one starts a business expecting to fail. As a matter of fact there is no part in any business plan outline that mentions what to do when the business starts to take a turn for the worse. Failure, much like opportunity, is much easier to see in the rear view than straight ahead. Most business owners are too emotionally invested in their idea to admit to themselves that their idea was not as commercially viable as it looked on paper or seen in their mind’s eye. Most of their customers see it before they do. There is a mantra in small business that your customers will give you everything you need to be successful; money, fair criticism, encouragement.
At what point should business owners recognize that their company is taking a wrong turn? Doug Cannon, Tarrant SBDC Business Advisor, points to the following red flags:
1. The business is having a lot of sales and coupon offers when they normally don’t. They try to cut prices and make up the margin on volume.
2. There is a noticeable drop in the quality of the product. Even if you think the quality is the same the customer notices.
3. Customer service begins to suffer. When the business is stressed it is most evident in the customer service.
These are by no means the only indicators, but typically the most common among failing small businesses. Once the downward spiral starts, it’s not easy to reverse. Aside from recognizing these common mistakes and choosing not to make them, the best approach is preventative. Start with a business plan that you continue to update as the business grows!
While there are lots of business planning tools and templates easily found with a single Google search, consider starting out with the following free options. First, visit the Small Business Administration website where you’ll find resources to create your business plan and a step-by-step tool that allows you to save as a PDF file and update it at any time. Next, head on over to SCORE where you can access numerous business plan and finance templates. Another option is StratPad’s downloadable easy to read business planning handbook.
In addition to having the right planning tools, you can also contact the Tarrant SBDC and request an appointment with a Business Advisor to review your plan.