10 Telltale Signs That Your Business is Headed South


The US Small Business Administration says that about half of newly established ventures fail within the first 5 years. What’s even more daunting than that is what Bloomberg Businessweek asserts: 8 out of 10 businesses do not go past the first 18 months. Indeed, either statement can leave a new entrepreneur with cold sweats and sleepless nights.

If you just launched your business and you want to have an idea if it’s likely to be one of the unfortunate enterprises that didn’t last for long, read on. Below are some of the signs your business is on the brink of failing:

  1. You don’t like what you do. If you cannot commit to your venture, don’t expect for customers or clients to commit to it as well. That is why one of the most important tips on starting up a business is for you to opt for something that you have interest in.
  1. Your employees are abandoning ship. Experts say that one of the primary reasons why employees leave and look for another company to work in is mismanagement. The problem doesn’t stop there — replacing an employee can be a money- and time-consuming ordeal.
  1. All earnings come from a few customers only. The Pareto Principle or 80/20 Rule states that about 80% of your revenues should come from 20% of your customers. If you business fails to meet this, chances are you’re not actively seeking out your target audience enough.
  1. Bills aren’t paid on time. Newly opened businesses may have a negative cash flow for months and this is perfectly fine. Even established ventures experience slow seasons from time to time. If your business is amassing all sorts of unpaid bills and employees are not getting their paychecks, you’re definitely in trouble.
  1. Your business is exactly just like your competitors’. There’s a huge possibility that the product or service you are offering is also being offered by a competitor or two. Doing things differently such as when it comes to customer service and after-sales support helps make your venture stand out.
  1. The product or service you offer sucks. There’s one clear sign that you are not offering one of the best in your industry: no one is paying for your product or service. Make improvements and pair it with top-notch customer service and marketing, then you can save your venture from crashing to the ground.
  1. People hear about you only through ads. Paid advertisements are effective marketing tools but they don’t come free of charge. If it’s only through ads that your target customers get to know you, your product or service may not be appealing or exciting enough. If it is, your venture will become popular via word of mouth.
  1. More money is spent on things unrelated to winning new customers. Trademarks, contracts, furnishings, company tours, etc. — all of these things can leave a massive dent on your financial resources and cause your business to shut down.
  1. You’re grabbing every opportunity that comes your way. Generally, it’s not a good idea to stray too far away from your business goals. Incorporate a new product or service that’s entirely different from what you originally offer and it’s not unlikely for some of your customers or clients to look for a business that’s more focused.
  1. You don’t have customers. With no one paying for your products or services, you won’t have the money to pay the bills and your employees. The absence of customers only leads to one thing: a closed shop.


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