[View Article List] [Go Back]

Danger Ahead: Five Signals for Business Owners - Don’t ignore the warning signs of trouble

If your business is managing to weather the uncertain economy so far, don’t rest on your laurels. Things can turn bad in a hurry. Here are five danger signals for business owners to heed.

1. You are spread too thin. If you are forced to answer every question and solve every crisis, it is a sign that you are not delegating very well. It is natural for a business owner or top manager to try to run the whole show. And for a while (particularly during a startup phase), doing so may help the company become profitable. However, over time you may find that you have overextended yourself without training anyone to back you up.

Assign tasks to others as part of a long-range training program. Not only does this relieve some of the burden on yourself, but it shows you which people are capable of handling comprehensive and tougher assignments.

2. Employees leave the job in droves. A high turnover rate can be a sign of any one of a number of problems within a company. Maybe your initial screening process is faulty, or your training is inadequate. Or a particular employee may be driving people out the door.

In any event, the results can be devastating. Poor morale, extra expenses from hiring and training replacements, lost business, etc., can all show up on the bottom line.

Use exit interviews to pinpoint the reasons why employees are leaving. If it is for any reason other than those normally associated with job moves (e.g., career advancement, higher salary), address those issues. Similarly, new-hires should have an accurate picture of their job duties and responsibilities, as well as their chances for advancement.

3. Orders are down. Almost every business goes through ups and downs. However, it is one thing for a customer or client to order less because business is slow; it is another if the drop is due to dissatisfaction with your company’s products or services. That is a serious problem when you consider all the time and money it takes to replace existing accounts with new ones.

Have your salespeople find out the reason for the dissatisfaction. Use that information to reverse the trend.

4. You do not have accurate information. You cannot keep on the lookout for early warnings of impending disaster unless you are kept up-to-date on your company’s fiscal health. Make it a company policy to have all key financial news—profit and loss statements, receivables reports, sales reports, etc.—sent to you on a timely basis.

5. Employee absences and tardiness are increasing. If morale is low and business is flat, perhaps it is a sign that employees are unsure of exactly how the company is performing and what its goals are.

Hold meetings with employees on a regular basis. You can explain the objectives of the company and the efforts required of them to meet these goals. At the same time, really listen to your employees. This is a good way to keep minor complaints from becoming major concerns.

Oftentimes, owners are the last ones to know that the business is in trouble. Do not let this happen to you.

[View Article List] [Go Back]