If you are a company director and you are concerned about the future of your company, then it really does pay to understand some of the key warning signs that you could be the owner of a failing business.
You Are Unable to Pay the Bills on Time
This may seem incredibly obvious, but it is important nonetheless. When your cash flow cycle slows down to the point where you are not able to pay any bills when they are due, you have to make sure that you look at the health of your organisation. Along with not paying bills on time, you may find that you have a huge range of issues, which range from angry letters from your creditors or even penalties for paying your tax late.
Your Customers Make Late Payments
If your cash flow is being slowed down because you are waiting for payments from your late customers then there’s a high chance that this will start a chain reaction which will then hit your entire company. Not getting paid on time can indicate a sloppy collection policy, or you may even experience general haphazardness, and this can interfere with the general operation of your business. One or two payments that are late is not problematic, but when it becomes a habit, you may find that something is not fundamentally right with your business operation.
Your Customer Service is Lacking
If you find that your customer service is just failing more and more by the day, then this could be a sign that your business is not doing as well as it could be. It may be that you need to try and boost your customer service skills or that your team need to know the value of caring for the clients who you do have. Either way, if your customer service is lacking then this would indicate that something needs to change on a deep level within your company. Communication is key when dealing with customers, so if you haven’t already, it may be wise to look into 3cx phone systems.
The Banks won’t Lend you Any More
When banks or other financial institutions see that your flow of capital is hit, they won’t have the faith they need to know that they are going to get it back. Lending is based on credit scores, sophisticated algorithms and information about the past lending history you have, it’s fair to say that they know when you can’t afford something. The last thing that you want is to see your company stunted in growth, but at the end of the day, it’s a sure sign that something needs to change.
Directors are Not Taking a Salary from the Company
When company directors or even company staff members are not taking a salary, this means that your company is not viable right now. If you want your business to have any chance of survival, then you need to make sure that you are generating enough capital to pay the key staff members of your company. If you do, then this will really help you out in the long run.