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5 Alarming Signs That Your Business Is Failing

5 Alarming Signs That Your Business Is Failing

Starting a business with a great idea doesn’t necessarily mean success. Launching a startup is surprisingly simple, but no one wants a bad start. When a business fails, entrepreneurs sometimes feel that the failure came out of nowhere. The truth is that very few businesses fail without warning. Here are five signs that your business is in serious trouble.

1. Low Sales

The first and most obvious sign that your business is floundering is low sales. This can mean lower than your projections, or lower than last year. For companies to succeed, they need to be making sales; if sales drop off suddenly, then you have a problem.

Turn it around by figuring out what went wrong. Did you introduce a new product that’s missing its target? Can your marketing be improved in an inexpensive way to better spell out your message? Is there a problem in the sales or service sector that can be resolved? Whatever’s going on, you have a limited amount of time to turn it around, so don’t wait.

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2. No Differentiation

For a business to find success in a noisy global market, it needs to be doing something different from the competition. Amazon pioneered two-day shipping, Jamberry offered a fashionable alternative to manicures, Lularoe took into consideration the needs of busy moms to have comfortable clothing and reminded them that they deserve to look beautiful as well.

What does your company do differently? If you can’t give a passionate, cohesive answer in a few sentences, you’ve missed the mark.

Turn it around by reexamining your ideal customer and figuring out what you can offer them that no one else can. Make sure your marketing reflects what you do differently than the competition and always strive to get more done for your customers.

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3. No One’s Talking

There’s nothing worse for a business than silence. If your customers aren’t talking, aren’t leaving reviews, aren’t engaged on social media, then you have a communication problem. After all, if they’re not talking to you, they’re definitely not talking to their friends about you.

Turn it around by understanding why they’re not talking. Are you not asking customers for reviews and reminding them how useful they are, or are they just not impressed enough with your services to talk about them? The two problems have very different solutions—know which one you’re fixing. Ask your customers to connect with your on social media and engage them in conversation about a specific product.

4. Struggles Around Cash Flow

Even though on your company’s profit and loss sheet you’re doing well, you struggle to pay your bills on time, or you find you have too much inventory on hand and have to engage in extreme promotions to make room for new products. Properly managing your cash flow is the single most important thing you can do for your business.

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Turn it around with practices like offering discounts to customers who pay cash or within 15 days, and only buying the inventory that you need, rather than investing heavily in something you’re just positive will take off soon.

5. Saying Things Like “Failure Is Not An Option!”

Here’s the truth of the matter: failure is an option. When the numbers say that 8 out of 10 businesses fail, it’s the worst sort of arrogance to assume that your business couldn’t possibly be one of them. Entrepreneurs and CEOs make mistakes all the time. Why are you exempt?

Usually, new business owners plan step-by-step how to start a company, but sometimes they will look up and realize that their business is headed in the wrong direction. They’ll manage to correct course, right the ship, and steer off in a new and smoother direction. But sometimes, it’s too little, too late. Your customer trust is gone, or your startup cash is depleted, or you’ve traded too heavily on employee morale and it’s all just over.

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In those situations, the way to turn it around is to close things down as gracefully as possible and to figure out what went wrong. Dig deep to find out where mistakes were made, and make sure you understand how to keep the same mistakes from recurring.

The next step is to move on. Find the next idea, do a better job of differentiating, communicate your ideas more clearly, keep your cash flow more consistent. The right idea and the right timing will happen—unless you give up.

Featured photo credit: VIKTOR HANACEK via picjumbo.com

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Margarita Hakobyan

MBA from the University of Utah

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Last Updated on November 19, 2018

How to Find a Suitable Professional Mentor

How to Find a Suitable Professional Mentor

I went through a personal experience that acted as a catalyst for an epiphany. When I got fired from a job, I learned something important about myself and where I was headed with my freelance career. I realized that the most important aspect of that one rather small job was the influence of the company owner. I realized that I wasn’t hurt that the company and I weren’t a perfect match; I was devastated by the stark fact that I needed a mentor and I had almost found one but lost her.

Suddenly, I felt like J.D., the main character in “Scrubs,” chasing Dr. Cox and trying to rip insight and wisdom from someone I respect. The realization that a recognized thought-leader and experienced entrepreneur severed ties with me felt crushing. But, I picked myself back up and thought about five ways to acquire a mentor without having the awkwardness of outright asking.

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1. Remember, a professional mentorship must be mutual.

A professional mentor must agree to engage in a mutual relationship because, as the comedy T.V. series showed us, one simply cannot force someone to tutor us. We have to prove that we are worth the time investment through persistence and dedication to the craft.

2. You have to have common interests with your mentor.

Even if a professional mentor appears at your job or school, realize that unless you and this person have common interests, you won’t find the relationship successful. I’ve been in situations where someone I respected had vastly different ideas about what was important in life or what one should spend his or her free time doing. If these things don’t line up, you may find the relationship won’t be as fruitful, even when the mentor knows a great deal about one industry.

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3. Thought-leaders will respect your passion.

One of the ways you can prove yourself worthy to a professional mentor is through your passion and your dedication. No one wants to spend time grooming and teaching another who will not take advice or put the effort in to improve. When following thought-leaders on Twitter and trying to engage with higher-ups in a work setting, realize that your actions most often speak louder than your words.

4. Before worrying if he respects you, ask if you respect him.

On the other side of the coin, you should seriously reflect on those common interests and make sure you respect your professional mentor. Just because someone holds a title, degree or office does not mean that person is trustworthy or honest. Don’t be swayed by appearances and take the time to find a suitable professional mentor.

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5. Failure is often the best way to learn

I honestly have made more mistakes than I can count. I know I’ve learned a great deal from poorly organized businesses and my own poor choices. The most important quality I’ve developed is an ability to swallow my pride and learn from my mistakes. If life knocks me down nine times, I get back up 10 times. One of the songs Megadeth wrote, “Of Mice and Men,” resonates in my mind when I pull myself up by my bootstraps and try again for a goal I’ve set: “So live your life and live it well. There’s not much left of me to tell. I just got back up each time I fell.” Hopefully, this brief post can act as a professional mentor to you in your quest to find not only a brave leader but also a trusted adviser.

Featured photo credit: morguefile via mrg.bz

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