5 Alarming Warnings That Your Business is Failing

Updated: Jun 30

Did you know that around 80% of small businesses survive their first two years of being open? This is a shockingly high and very encouraging statistic for entrepreneurs and small business owners across the country. The odds are truly in your favor, for the first two years that is. After the first couple of years, your chances of staying in business decrease rapidly. Nearly half of small businesses are likely to fail after five years of being open, and only about a quarter of small businesses make it past 15 years. We all want our businesses to stay open and succeed, but the truth is that, well, it probably won’t. This can be a very difficult thing to accept and for good reason. You probably worked extremely hard just to get the business up and running, let alone how hard you’ve worked to get it to stay open. However, there is a critical point at which you know your business has ultimately failed. We call this point the time of death. Yes, it is a little morbid, but so is losing the thing that you’ve put months and years of work into. Time of death can be a difficult thing to realize and accept, especially if you are a young or inexperienced entrepreneur. The 5 signs below are key indicators that your business is either on a failing path or has already kicked the bucket.

1. No One is Talking About Your Business

You haven’t had a new customer in a couple of months and previous customers are not reviewing your business online. Both of these things are very important to the business’s success. This could be happening for a multitude of reasons from poor marketing strategy to ineffective customer call to action. All that matters is that you are not getting discovered and not progressing, which could mean disaster for a small business.

2. Low Sales or No Sales

This one is pretty obvious. Money makes the world go round. Simply put, money keeps your business afloat and without it, it will drown. You have to pay employees, business rent, supplies, investors, etc. If your sales have decreased, you haven’t seen an increase in an extended amount of time, or haven’t sold anything at all, your business is on a failing path.

3. Lack of Differentiation or No Differentiation

In order to stand out in today’s bustling market, you have to have something that your direct competitors can’t. Just think for a second, what does your business offer, product or service, that your competitors don’t? And, can you actually deliver on these expectations in an efficient and effective manner? If you’re having trouble answering these or have no answers at all, your business is on a failing path.

4. Repeated Mistakes

ALL businesses make mistakes, and as we know, mistakes cost money. As the CEO, president, or other executive of a business, you are responsible for finding the cause of the mistake and correcting the issue so it doesn’t reoccur. However, there are some businesses that continue to make the same mistakes over and over and over and over again. If this is happening to your business, it probably means two things.

  1. The business executives are not doing their job or are incapable of doing their job effectively.

  2. The business is losing money, possibly a lot.

If you or your business partners cannot figure out the issue and resolve it, your business will be or could already be on its way to failure.

5. Employees Chatter & Leaving

Employees come and go and that’s understandable. However, there is a difference between the ordinary employee loss and high turnover rate. If you have lost employees at an exceedingly higher rate than normal, you could be in trouble. If they’ve told you their reason for leaving was in regards to possible business failure or even if you have overheard employees discussing it, you are on a failing path.

The world of business is brutally unapologetic at times. Some companies prosper and have great success, but most of them end in failure. But the thing is: you already knew this. You didn’t get into business because you knew it was going to be easy, you got into business for yourself, to do or offer something better, fulfill unmet needs, and to seize an opportunity. It was risky, yes, but a calculated risk, a risk that you and others thought was worthwhile. So, do not be ashamed or overly critical over a business failure. The odds were against you from the very beginning. I leave you with a quote from Chico Xavier, a Brazilian philanthropist,

“‎Though nobody can go back and make a new beginning... Anyone can start over and make a new ending.”

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