4 Signs Your New Business Needs a Major Overhaul
~by Anica Oaks~
.Statistics show that 50 percent of fledgling businesses within the United States die during their first five years. This is a sobering fact, but it is also enlightening. Fledgling businesses don’t just fail overnight. It is a gradual process. If a new business owner notices signs that their business is not going in the right direction, they need to take steps to overhaul their company. Some indicators of a failing business include:
- Slowing Growth
- Lack of Innovation
- Low Cash Flow
- Poor Cash Management
If you notice any of these signs, you need to be proactive about addressing these issues as soon as possible.
Responding to Slow Business Growth
A business may have an amazing product, stellar customer service and a vision for the future. However, if it’s not making its numbers or growth has stalled, the time has come to re-examine and reevaluate the situation. All businesses have space to improve, but not all business owners have the vision to know where to look for improvement strategies. Some strategies for an overhaul may include:
- Improving an underdeveloped brand
- Improving team collaboration
- Identifying and eliminating inefficient or impractical business practices
- Creating long-term and short-term goals
Don’t be afraid to critically assess your core business principles, strategies and organization if you think your business is beginning to flounder.
A business that is not innovating is dying. Many mistakenly equate a lack of innovation within a company to a failure to execute innovative ideas provided by employees or by executives. In most cases, the problem is deeper and is connected to the lack of an innovation strategy.
Innovation strategies are a set of coherent, mutually reinforcing policies designed to achieve a goal. Overhauling the way a business innovates may require hiring individuals who are trained to think in an innovative way. This includes those who have received the proper education, such as an online bachelor’s of business administration.
Low Cash Flow
Many failing businesses have cash flow problems because they wait too long to look at their financial statements. When they do, their financial problems have reached a point where they become too big to handle. Fledgling businesses often have this problem because they have not yet built up a cash reserve. One option could be to take out a business loan.
Poor Cash Management is a Systemic Problem
Just about every business has some cash flow problems. Failing businesses have a persistent cash flow problem connected to structural issues in the way that cash is managed. The worst thing a new business can do is ignore the situation. Instead, develop a solution by contacting a financial group, developing a good relationship with banks and creating an invoice system. Your invoice system should have clear pay dates as well as punishments for late payments and incentives for early payments.
It can seem discouraging to hear that 50 percent of businesses fail within five years. But this also means that 50 percent of businesses succeed for longer than five years. Recognizing problems and taking steps to correct the wrong is a key part of making a fledgling business successful for the long haul.
Meet the Author: Anica Oaks
Anica is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean and anything outdoor related. She was raised in a big family, so she’s used to putting things to a vote. Also, cartwheels are her specialty. You can connect with Anica here.