While we never want to focus on the negative here at KORONA, we also want to make sure we provide our readers with valuable information. And it’s important to be able to identify problematic issues so that you can fix them before it’s too late. Signs that a company is going under don’t necessarily mean that it’s a sure thing. Instead, it just means that some structural change is warranted.
Luckily, most small businesses can make some pretty simple fixes to turn business around. There isn’t all that big of a difference between a company that is utterly failing and one that is moderately succeeding, so have faith that even if you’re struggling now, greener pastures aren’t far away.
In order to diagnose the issues and assign the proper remedies, it’s important to first identify the symptoms. For some businesses, it might just be one or two small issues that are affecting business, while others may need a more broad overhaul. Whatever your situation may be, it’s rarely too late. So let’s take a look at some of the most common issues that plague SMBs and, more importantly, look at ways to cure what ails them.
See Also: How to Respond to Customer Complaints
At perilous risk of stating the obvious, a drastic decline in sales is a really bad sign. And the one most likely to tip businesses off that something is wrong.
Improve Your Business: An easy place to start would be to look at year-over-year sales. Many businesses have seasonal decline, so a dip in sales as measured against the previous week or month might not tell you much. But a drastic change compared to years prior might be a really bad sign.
It’s always critical to listen to what your customers have to say. Work on encouraging online reviews and feedback. If you run an eCommerce store, follow-up with an email. For brick and mortar shops, train your employees to anticipate common customer omplaints, ask the right questions and respond to complaints in a productive manner.
Improve Your Business: But if you notice that there are suddenly more complaints than normal, you must reevaluate business operations. Dissatisfied customers are less likely to return and can quickly damage your word of mouth marketing.
Retail has become more competitive than it ever has been. eCommerce has exploded as a multi-trillion dollar industry, while brick and mortar has continued to grow at a steady rate. It’s a noisy field.
Improve Your Business: While you don’t need to come up with the next Amazon Prime or Dollar Shave Club, business owners must focus on ways to set themselves apart from the field. It could come from your store’s ethos and philosophy, a single flagship product, great customer service, or even a catchy logo. Whatever makes your store unique, make sure that you highlight it to stay above the fold.
These days businesses need to stay engaged online. That means staying active on social media channels, customer review sites, blogging, and any other platform relevant to your brand. If no one is talking about you online, then it probably means that no one is talking about you with their friends and family either.
Improve Your Business: Figure out what’s lacking that causing the silence. If it’s simply that your shoppers need a reminder to promote your great brand, then boost your email marketing strategies and social media engagement campaigns. But if customers are simply not enthused by your product, it might be time for a larger overhaul.
Cash flow issues are common for many retailers. Effectively managing your inventory system is often a difficult operational procedure to optimize. Overstocked storage will leave businesses with less cash on hand, taking away a budget for new products, hiring, or marketing. Likewise, running out of stock will result in unhappy shoppers who are likely to take their business elsewhere.
Improve Your Business: Get your inventory in order quickly. If you’re overstocked, run a promotion to move through slow-moving stock. Improve your inventory management software as well. Great solutions can automate ordering, manage vendor relations, grade product performance, and give you stock notifications. Robust inventory software can improve your cash flow quickly.
Employees are on the front lines of your retail operation, so they’re often the first to recognize signs that a company is going under. Your retail associates deal with customers directly and can pick up on troublesome trends. If you have a sudden change in your staff turnover rates, this may be a serious issue for your business. Additionally, high turnover is costly for any business. Interviewing, onboarding, and training are time-consuming and expensive.
Improve Your Business: Start by asking existing staff members how the work environment can be improved. Morale is an important factor in retail, so it might be as simple as improving that. Other common factors leading to high staff turnover are low pay and management issues. But if you rule these out, staff might be leaving because they see the writing on the wall that business is declining. Listen to input from your team and find ways to improve your operations.
Many startup founders don’t take a paycheck for the first several years of operation. After all, it takes a lot to get a new business off the ground. But this shouldn’t last once the company has been established. The same goes for pay cuts, layoffs, or hiring freezes. Each are troublesome signs of the road ahead.
Improve Your Business: Rarely are mass layoffs or pay cuts the right solution unless you’re just delaying the inevitable. Businesses should focus on other areas of operations to cut costs and save money. This might include changing your product line, hours of operation, or vendor partnerships. Cutting positions or pay should be a last resort for any business.
Other Solutions to Signs That a Company Is Going Under
If you are passionate about your business and product, the factors behind a failing business are likely operational, and therefore preventable. It’s critical that SMBs invest in the right tools for ensuring that business runs smoothly. Your point of sale system should be the central hub of all business operations and integral to your success. To find out more about what your POS can do for your company, check out KORONA. Check out the features that you’ll get with the software, and, if you like what you see, set up a free trial.