5 Warning Signs Your Business Is About To Fail

5 Warning Signs Your Business Is About To Fail

Business failures are always preceded with some warning signs. What entrepreneurs do with them, is what ultimately determines the direction the business takes; whether success or failure.

Businesses don’t just fail. Many factors trigger the unfortunate shut down. From lack of employee motivation, to low sales, no positive word of mouth, and more, the failure of any business largely lies on the inexperience or indiscipline of the person or people running it.

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If you’re unsure of what direction your business is taking, here are 5 warning signs that indicate your business is headed for failure:

See Also: 10 Ways To Build A Successful New Business


1). Your Sales Are Only Getting Lower:

The months are passing by, the years are skimming through, but your sales are only getting lower and lower. This 95% of the time means one thing: A business failure is imminent.

When your sales keep dropping amidst you adjusting your marketing strategies frequently with no improvements, it could mean your products and/or services have no real market value.

If you have a competitor that’s excelling in the same industry while you’re slowly crashing out, a sales course, a more comprehensive market research, or hiring a highly reputable industry expert to get your business back on its feet is crucial.

If nothing still works after a concise trial, first accept you didn’t fail, but only learnt something new, then recap your experiences and get into another line of business as the next course of action.

See Also: 7 Ways To Immediately Increase Revenue In Your Business


2). You Have No Positive Referrals And Testimonials:

Business failure can be triggered by negative word of mouth. When people have nothing good to say about your products or services, they either say nothing, or go around telling other people how terrible your services are.

A lack of positive referrals and testimonials are alarming warning signs no entrepreneur should take lightly. If no one wants to refer your business to others or your referral rates are really low, pick up the phone and call your customers one after the other. Hear their feedback on your business; what you did right & wrong, where they feel taken for granted, and how they believe you can make amends.

Contacting them builds a layer of trust between your business and them. This shows you care about the welfare of your customers after a purchase of any of your products or services, and that you’re willing to make changes to suit them however they deem fit.


3). There’s No Motivation Amongst Your Employees:

The moment your team loses faith in you and your business, their motivation drops, and their output diminishes.

Always do everything to ensure your employees stay motivated all year round. This could mean involving them in newer challenges, having quarterly employee hangouts, bringing in more clients, and even raising their salaries.

Motivated people are always ready to act. If you plan on growing your business to your aspired heights, raising the spirits of your employees is one of the smartest things to do. Else, expect a drop in productivity, then sales, customers, and eventually your business.

See Also: How To Build An Effective Sales Team From Scratch


4). Your Losses Are At A Record High:

Sometimes businesses spend a lot of money and accumulate a lot of losses, just to acquire a certain customer base within a short period. While this may seem like a move that has worked for most venture backed startups, it has equally lead to the downfall of many other businesses.

If your business keeps running year-in year-out with so signs of hope for an improved cash flow or profits, your business is headed down the startup drain.

Recording alarming losses with no feasible means of growth and profitability will end your business eventually. If everything that’s worth trying hasn’t worked, getting a more feasible business idea to start up with the little cash salvaged from your business must be done with urgency.

See Also: 7 Sure Ways To Cut Your Small Business Expenses And Increase Your Profit


5). There’s Nothing New About Your Products Or Services:

When your products and/or services remain the same with no improvements in the value they add to your existing customers, its old state gradually pushes them on to your competition.

The value your business delivers is ultimately determined by the customers; from how much they need your products or services to the amount they’re willing to pay for it. When the value your products or services adds ceases to improve, and your customers begin to realise some other competitors are offering better than what you are at the same price or even lower, they brace themselves and eventually leave.

If your product remains the same for too long, you risk losing a bulk of your customers to desperate competitors. As your customers change their brand preferences, your revenues drop, and so does your profit margins.

Not containing customer losses due to an orthodox product is going to eventually leave your business obsolete.


What are your thoughts on these 5 warning signs your business is about to fail? Let me know by leaving a comment below.


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