Warning signs can be useful to avoid business failure provided you act on them without delay.
The following are some warning signs you might come across:
- It’s getting increasingly more difficult to pay creditors.
- Legal action has been threatened.
- You are regularly “fire-fighting” cash problems.
- You are falling behind with payments to the Collector General.
- You are not controlling your expenses.
- Your sales are decreasing.
- Your customers are not paying you on time and late payment issues are increasing.
- You are having to give large discounts just to get paid promptly.
- You are continuing to deal with loss making customers.
- Your credit control policy is not-existent.
- You are always at your overdraft limit.
- The bank insist on personal guarantees or want to increase personal guarantees.
- The bank are decreasing the overdraft and refusing to provide a loan/extend credit.
- Your bank is getting concerned and pressuring you for information and action.
- You and your management team are not performing well either individually or collectively.
- Your business planning is poor or non-existent.
- Staff meetings are not held regularly.
- The books and records are not up to date and you have limited or no up to date financial or operating information.
- Your obligatory returns are outstanding and you are paying interest and penalties.
- Your product/service quality is deteriorating.
- Your staff are leaving.
- You are not keeping up to date with market changes.
- You are putting your own or family funds into the business to keep it going.
- You are not in contact with your accountants to see what advice they can give you.
- You are not dealing with problems when they arise.
Very simply identify your problems, decide on how you are going to deal with them and review your actions weekly if not daily. Getting advice can also ease the stress you are under and can help you considerably.