If your business is failing, it’s time to change your strategy and recognize the warning signs. You may not recognize them as a new business owner, so read on to learn about some of the red flags you should look for. Sudden loss of customers who are not coming back may be a sign that your business is in trouble. Carrying a high bank balance may also be a warning sign. In either case, it’s time to revamp your strategy and take action.
Sudden Customer Loss
Most business owners have a pulse of the business and the customer relationships. We all know that business relationships have ebbs and flows. For various reasons we can know if a separation is coming. Maybe the customer’s business is getting sold, or a customer is moving away. We might generally know these things.
However, a sudden customer loss can result from the business management losing touch with the clients. This is especially true if the customer is moving to one of your competitors. If they simply didn’t tell you they were considering a move, they may have lost faith in your business completely. Establishing and maintaining those relationships is key to retaining your customers.
Carrying a Credit Card Balance
Whether you’re an individual or a business, carrying a credit card balance is a serious warning sign. You’ll soon lose your grace period, start accruing interest, and possibly end up with a lowered credit score. While you may think that it’s a good idea to carry a balance to cover unexpected expenses, carrying a balance is not a wise long-term strategy. Instead, you should consider using the grace period of your credit card to pay off the balance and start rebuilding your credit score.
Carrying a credit card balance is essentially borrowing money from the issuer. You must pay at least the minimum monthly payment. And once you’ve reached the end of the promotional period, you will need to pay off your entire balance. In the meantime, you’re only prolonging your debt. This is a big business warning sign! It’s crucial that you take action now to get out of debt as soon as possible.
Low Bank Balance
You may have heard that a low bank balance can be a warning sign for your business. But a low bank balance is not the only warning sign. Having a low balance alert can also help you plan ahead and make smart spending decisions. Whether you’re worried about overdraft fees or just want to check your balance without logging into your account, low bank balance alerts can be helpful. Having a healthy cash balance reduces your vulnerability and gives you a good bargaining power when prices fall. The same is true for companies. Check your cash on hand and other short-term investments and check the amount of debt you have. Check out your net debt note, which records all of your interest-bearing debt minus cash. If your bank account has a low cash balance and a high net debt note, you may need to make some changes.
I hope you enjoyed this article on Business Warning Signs today. My goal is to provide some tips and information to help you in your business. This information is broadly written to apply to most businesses. However, each business needs a consultant or coach that understands your specific business, the niches it serves, and your unique goals. If you would like to book some time to chat, then click below!