The world of business is a cutthroat industry where, as a business owner, you sink or swim.

When running a business, it’s crucial that you keep an eye on your business operations at all times so that you’ll see the early warning signs that may suggest your business is starting to fail.


If you’re a business owner and you’re concerned about your business and where it’s headed, this article will provide some insight into the most important signals to watch out for. Let’s take a look now at some signs your business is starting to fail.


Compounding Financial Stress:  In any business, you’re likely to encounter some financial strain and stress which, with proper guidance and planning, can be alleviated. However, if you find that you’re beginning to accumulate more and more debt, and your cash flow is beginning to suffer, it’s a dangerous sign that you’re in trouble.


Growing debt is a pretty clear sign that your revenue and cash flow management isn’t what it should be, especially if you previously years where your business was in the black for a long while. If your debts are starting to gain momentum, it’s a good idea to assess your income and expenses to see where there are opportunities to maximise efficiency and eliminate wastage.


At times like this, it’s better to try and work on improving your income than spending more and more money on your business expenses. For example, you may wish to consider opportunities to boost sales by identifying opportunities to cross-sell products or services to existing clients.  This requires a full analysis of your existing product and service portfolio as well as a review of the products and services offered by your competitors. This review should also include an assessment of those products and services that are no longer profitable with a view to discontinuing non-profitable lines.


Drop In Sales:  While it’s normal for some sectors to experience a drop in sales during certain periods of the year, it’s not normal to have a drop in sales for the whole year or consecutive years running. A drop in sales means that either:

  • The products you’re selling are no longer of interest or are obsolete.
  • Your prices are too high against your competitors.
  • You aren’t marketing yourself appropriately to the right target customer.
  • Your business isn’t as appealing to your customers as you might think.


If you’re experiencing lower than average sales and you’re not sure why this is, then it’s time to analyse your business, ways to improve your income, your marketing efforts, and your competitors that are taking you customers. When analysing these areas, you need to:

  • Work out what they’re doing that you can do better.
  • Are the marketing channels you’ve chosen the right ones? Are they the same ones your competitors are using?
  • Does your business and/or business website look professional, modern and appealing to the eye?
  • Are your products still in demand? What can you do to make them more appealing to your customers?
    • Do you need to expand, enhance or replace your product/service portfolio?


Analysing your business and competitors can help to reduce the risk of your business failing or running off track for too long when sales have dropped for an extended period. From a marketing perspective, reviewing sales performance, monitoring the market and emerging trends and opportunities as well as potential threats, is a continuous process.


Next week, we continue…


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