Failure rarely comes unawares. More often than not, failure, when it impends, sends warning signals that are easy to observe – for the smart entrepreneur.
Failure attacks and crushes most businesses for either of two reasons:
- The entrepreneur is unaware of the major indicators of business failure
- The entrepreneur notices the indicators but ignores them
The first reason is common; ordinarily, an entrepreneur will certainly not ignore any indicators of impending doom. But most entrepreneurs don’t know these signs, and this ignorance is what makes their businesses fail.
Do you know these indicators? There are many of them, but here are the five major ones:
1. Reduced demand
This could be because either your products or services are not up to the expected standards or they are just too expensive, compared to those of your rivals. However, there may be other reasons for this.
When your best customers are buying less than they usually do, it’s a sign that your business is heading for a halt. So, always record the purchases made by each customer, especially the best ones. This will help you detect easily when they start buying less than usual.
Also, when you’re finding it hard to attract new customers to your business, it shows your business isn’t catchy enough and will fail anytime soon.
2. Intimidating competition that you just can’t beat
When new rivals break into market with brand new ideas that pale yours into insignificance, or when your competitors introduce killer innovative strategies that you can’t beat in ten years, your business will most likely fail.
As the competition gets thicker, you soon lose all your customers to your rivals, and your business soon peters out of market.
However, with lots of brainstorming and a determination to succeed, you’ll keep your business going.
3. Lost passion
Passion breeds the zeal and determination to make things work. It keeps you focused even when many obstacles are in your way. It keeps you hopeful that success will come sometimes later.
But when you lose passion, you lose optimism too. And when you’re no longer optimistic, your business will most likely fail.
4. Too many complaints from customers
Nobody likes to pay for mediocre services. We all want value for the cash we pay for any product or service. So, it’s normal that we complain when they fall below our expectations.
Only unsatisfied customers complain. And in most cases, customers aren’t willing to give a second chance after a disappointment.
When you start receiving too many complaints from your customers, that’s a sign you’ll soon be closing shop. Yes, your customers will go elsewhere.
While it is natural to make mistakes, you’re not expected to repeat them. Why? Because you should have learned from them.
Not learning from past mistakes is one of the shortest routes to failure, as you’ll keep falling into the same mistakes over and over.
As an entrepreneur, never wait till you fall into mistakes before learning. Rather, learn from other people’s mistakes to avoid falling into the same mistakes.
All these indicators bring about one result – reduced profits. And when your profit reduces, your business melts gradually to its end.
Always check your business for these signs and you’ll never be hit unawares. It won’t hurt if you conduct the check every week. The more frequently you check, the less likely it is that your business will fail.