Do you know there are certain warning signs that tell if a business is going under? Sure, no one ever wants to think the worst, but it is also important you learn how to tell if a business is going under, so you can start thinking about alternatives.
As a business leader, being aware of when the business is starting to fail is key to getting out of the situation as quickly as possible.
Likewise, when an employee is getting vibes he/she can’t explain, it could be a sign of a failing business and needs to start looking elsewhere.
Great business leaders can recognize when it’s time to throw in the towel.
Employees also need to be ready to cover themselves in the worst-case scenario.
Here are a few sure signs that a business is failing and that it’s time to get out before you get dragged down with it.
How to Tell If a Business is Going Under
One way to tell if a business is going down is through sales.
At the end of the day, no business can ever succeed if it doesn’t have the necessary income to support itself.
Of course, a decision should never be made hastily.
If you start noticing a sudden drop off in sales, identify for the reasons behind the decline in sales.
Ask yourself some important questions such as;
- Did you recently change your marketing strategy?
- Has there been an introduction of new competition?
There are a variety of reasons why sales could suddenly drop off.
However, if there are still opportunities for improvement, then it may be safe to stay.
Nevertheless, if things just keep getting worse on a regular basis, look for a way out.
Perhaps cutting your losses where necessary might just be the best and safest solution for you.
Strange And Sudden Closed-Door Meetings
Have you been noticing that more and more closed-door meetings seem to be popping up out of nowhere?
Where once the hallways were busy with conversation and teamwork, offices are now shut and everyone seems to be keeping to themselves.
This could tell you the business is in a serious situation.
When executives seem to be meeting much more often, and alone, it could be time to start looking for different opportunities.
Unless you’ve been given some indication as to why your company has suddenly become much more secretive, this kind of withdrawal can only mean bad news.
When things start going under, leadership will try to keep things running smoothly for as long as they can.
However, this lack of communication is one of the first things that should indicate to staff that looking for another option is their best decision.
Can’t Remember The Last Time You Spoke With A Client
Are you finding it difficult to remember the last time you saw a specific client?
Whether you’re a customer service representative or the business owner, having great customer care and being aware of every time you see clients is key to your success.
As such, if it’s been so long that you can’t even remember the last time you spoke to customers, that could be a sign to tell you something is going wrong with your business.
It means that either you’re not actively engaged with your clients.
It might also be that those clients have found an alternative to your business that better suits their needs.
Either one of those situations is bad news for your business.
A few customers dropping off might be much of a problem.
However, if this becomes a constant and growing issue, then looking for ways to get out might be your best choice.
No One Is Talking About The Business
Being relevant and staying on the tip of the tongues of your clients is key to any business’s success.
If you start noticing that no one cares about what you have to say, it might be time to throw in the towel.
Social media is a great way to tell how well your business is doing.
If you start to notice that fewer people are reacting to your posts or mentioning you in any sort of way, this means that no one cares about receiving what you have to offer.
A company needs to stay in people’s minds in order to succeed.
If they can’t do that, then it’s time to look elsewhere.
No New Hires
Another big sign that tells if a business isn’t doing well is the sudden stop of new hires.
The better-off a business is doing and the more it continues to grow, the more staff they’ll need to bring on.
When a business is failing, the opposite will be the case.
More staff means the need for more income.
And, if there simply isn’t enough income, the company won’t be able to bring on new staff.
When you realize that the last new employee started months, if not an entire year ago, you might need to start preparing yourself for the worst.
Longtime Employees Start To Leave
Another big sign that things are going downhill is when longtime employees, especially those in management positions, start to leave.
Sometimes employees and fellow staff members realize that things are heading towards destruction long before their coworkers and employers do.
When people that previously held key positions in the business suddenly start dropping off, it’s absolutely time to follow their lead.
When people who are excellent at what they do and love their jobs suddenly leave, there’s usually a pretty good reason as to why.
Rather than questioning their motives, start questioning aspects of the business they walked out of.
The sooner you’re aware of a problem, the better.
Layoffs And Pay Cuts
When a company is doing well, they will want to bring in new talent, not get rid of what they already have.
If you start noticing an abundance of layoffs, this could be a sign to tell you the business is having issues.
It’s probably best to start preparing yourself for the worst.
Layoffs mean that the company is having to let go of key players because there isn’t enough money to pay them what they deserve to earn.
It means that business owners are starting to take steps to try to save their business rather than watch it grow.
This kind of step is usually one of the last resorts.
So, getting yourself out of there before things get any worse is your only real option.
While you might think that company loyalty is important, making sure you take care of yourself is equally so.
New Visions Or Missions
- Has there been a sudden and abrupt change in tactics?
- Are you seeing that managers and higher-ups seem to be unsure of the direction in which things are meant to be headed?
- Have you been made aware of a dramatic change to the company’s mission?
These are all signs that the business owner is either confused about where to go or is trying everything they can to stay relevant and current.
Either way, this is a sure sign to tell that things aren’t going well with the business.
A desperate attempt at saving the business can only mean that things are close to the end.
At these times, keeping yourself financially safe is the most important thing.
Start looking for different employment while doing everything you can to help the business you’re currently in.
While you want to cover yourself, you don’t want to leave those around you hanging high and dry.
- As a business leader, are you starting to question your motivations?
- As an employee, are you noticing those above you becoming more and more confused about what steps to take?
When business owners start questioning their every move, it’s to tell that the business is likely beginning to go under.
While questioning one’s actions and implementing changes in order to correct errors is key to running a successful business, having this constant doubt can only mean one thing.
At times like this, moving on from the business is the best option available.
A successful company needs to stay strong and conquer any challenges that come their way head-on.
If you see that this isn’t what’s happening, you need to cut ties before you get dragged down with the failing company.
Projects Are Postponed Indefinitely
At the end of the day, people go into work in order to get certain tasks done and accomplish specific projects.
When this can’t happen for whatever reason on a regular basis, it means that something somewhere isn’t right.
It could mean that leadership isn’t sure of what they’re doing.
It could mean that there simply isn’t enough money to get things done in the way they should be.
Whatever the reason, it’s most likely something bad and it’s more than likely a sign that things are headed in a negative direction.
When you start noticing that things can’t be finished and that employees are being left without new tasks, looking for a different option is the only thing you can do.
Business Becomes Stagnant
- Have you noticed that your business is no longer striving to meet the current needs of customers?
- Are decisions being made based on the successes of the past rather than ideas for the future?
At the end of the day, a business needs to be progressive and innovative in order to succeed.
If they keep doing and offering what they always have without any sort of differentiation to keep up with the times, they’ll be left in the past to fail.
This can sometimes be incredibly difficult for business leaders to accept.
Many become complacent to a certain degree and can’t seem to bring themselves to accept such dramatic changes.
When you find yourself doing the same thing you’ve done for years, it’s time to move on.
Being stagnant is the absolute worst thing in business and it’s a guaranteed path to failure.
Encouraged To Play It Safe
Risk and risk-taking is a necessary part of any and every strong business.
The only way progress can happen is by taking risks.
If you realize that the company as a whole has suddenly started playing it safe, there’s usually a reason why, and it’s usually bad.
When a company is failing, it will start relying on what’s worked in the past in order to bring them out of it, rather than trying unsure tactics that aren’t guaranteed to work.
While this might help at the moment, for the long term success of the business, this kind of mindset can be devastating.
You need to make sure you’re involved with a company that throws itself at the best opportunities, carefully evaluating the risks that might be involved.
They will encourage new ideas and different possibilities.
You need to find somewhere else to go if this kind of attitude is labeled as dangerous and unnecessary.
Unhappiness And A Lack Of Motivation
While it’s pretty normal for people to not want to go to work, once they arrive, their attitude usually changes to a much more positive and motivated outlook.
When things don’t change, and when the atmosphere is one of negativity and unhappiness, this should tell you the business is on the fast track to failure.
Happy and inspired employees are key to a successful business.
If you find that the staff is constantly in a state of stress or worry then the likelihood is high that things won’t be going well for long.
Great companies consist of excited and enthusiastic staff.
Make sure you’re putting yourself in an environment that encourages staff to want to do their best every day rather than stare at the clock for most of the eight hours they’re there.
No More Freebies
Most businesses have some sort of freebie that they offer to staff throughout the day to keep them motivated.
This might include a soda machine, free parking passes, and even paid vacations.
When you start to realize that those perks are disappearing one by one, it means it’s time to jump ship.
When a company can no longer offer what they were able to in the past, it means that the money coming in just isn’t enough to support those kinds of benefits.
Although it might not be as dramatic as pay cuts and layoffs.
But this is usually the first step down that path and worse things are sure to follow.
As such, it’s best to evaluate if you should get yourself out of the situation before it gets any worse.
Finding yourself an alternative form of income is really the best thing you can do at this point.
No Longer Busy
Are you finding yourself struggling to find things to do?
Were your days once filled with so many tasks that you were always worried about actually finishing and now you’re bored and with nothing to do for hours before it’s time to leave?
A lack of work means a lack of clients, which means a lack of income.
All of these factors are bad for you.
When a business isn’t busy, it could be an immediate sign to walk away.
No one ever wants to throw in the towel, but having nothing to do means the business is failing completely and getting out before it gets worse is the surest way to go.
One most definite sign that tells if a business is going under is when a company-wide meeting is called to communicate this.
Companies hardly have a full company meeting for a positive reason.
More often than not, it’s to discuss the failure of the business.
This is the ultimate sign that things aren’t going to get better.
It would be better you make a move for your own benefit immediately.
As upsetting as it may be, getting the call for this kind of meeting means it’s finally time to throw in the towel.
Final words on How to Tell If a Business is Going Under
Part of starting a business means understanding the possibility of failure.
However, while it might be one of the most difficult things in the world to accept, knowing what to look out for can make a world of difference.
Whether you’re a business owner or an employee, being aware of these signs is incredibly important.
It can help cover you at the moment when you need it most.
Keep these signs in mind so that you can always be ahead of the game.
Lastly, always be ready to protect yourself, should the need ever arise.
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