Tweet

6 questions to answer bluntly to find out if your business is in a crisis

Guest post by:

Article Overview: Is owning and operating your business in this current economic climate getting you down? Not sure what your next steps should be? Not sure if you have options? The first thing is to know where you and your business currently stand; which is the purpose of this article. Once you know that answer, dust off your business plan, refresh it and review your next steps from an informed position.

6 questions to answer bluntly to find out if your business is in a crisis

Everyone hates to fail. Everyone hates to fail at anything. Sometimes it is difficult to find out if and when you are failing. It's like falling over when you trip. Often you don't even know you have tripped and fallen until you hit the ground. Owning and running a failing business can be the same. However, the process can be slower and more painful and possibly avoidable. If your business is struggling but you're not sure how to tell if it is failing, bluntly and honestly answer the following six questions. 1. Do you have cash flow problems?

A quick look at the bank statements for the last few months will show the opening balance and closing balance. If the opening balance is higher than the closing balance for each of the last three months then you may have a problem. If the business doesn't carry Accounts Receivables you do. If the business does carry Accounts Receivables and they are growing, your business has now become a bank for your customers and you now need to quickly manage this problem. If the Accounts Receivables are increasing quickly then you have an urgent problem that needs action now.

The other test is more frequent questions from your internal accounting person saying suppliers are calling for payment but we do not have sufficient funds to pay the Accounts Payable.

2. Where do you expect the business to be in one, five and ten years?

If you're not sure of the answer to the above question and worse still, don't want to talk about it because you don't know the answer; there is a problem. A business is about disciplines and results but more importantly, knowing why it exists and how to get there. If the person responsible for the vision of the business lacks the energy, stamina or hunger, your competitor's have probably taken your market share and so you have a major problem.

3. What are your customers saying about you?

If you don't have an answer to this question then you may have a problem.

If you are sales and marketing people walk the other way when you come to talk to them; then you have a problem. This is because they are not doing their job or they've simply given up trying to tell you, as there was always a reason things weren't happening.

4. When was the last time you looked at your Business Plan?

If the answer is that you do not have a business plan then you do have a problem. If it's been years since you dusted off the business plan to look at it as you never followed it anyway, you do have a problem. If you fail to plan, you plan to fail.

5. Are you constantly hiring new people or still have the same people you've had for ten years or more?

This one is a two edged sword but one answer. You need to really know the right answer. If you have the same people who are doing the same job year in year out because "they are the backbone of the company" is this right? Are they bringing new and cutting edge ideas they hear from the market that your competitors are using or are they going through the same motion, day in and day out? They'll have an answer but you need to check the answer with your customers. When was the last thank you call or testimonial or referral from one of your customers for each of your sales people? Similarly, are you constantly turning over new people "because they don't fit in?" What are your customers saying? It could be these new people are simply not being heard and so they are leaving to go and work somewhere else and can make a difference. Do you do exit interviews? Do you know why people you hired for good reasons are now leaving? You may need professional help to remove the dead wood but you must remove those that are hurting the company or keep those that customers enjoy working with. There is one guarantee - your company will never reach its true potential by keeping inferior people on the payroll.

6. When was the last time you did a reality check?

This is probably the toughest question of them all. You need to ask someone with no agenda and a person you trust. And you probably need it from more than one person. Are you in denial about the performance of the company? Sure, the economy is at its worst ever in your life time. Does that motivate or de-motivate you? Are you the right person with the right skill set to manage the company's problems? Are your trusted advisors or business coach screaming at you to make changes or are they going through the motions, glad to receive their check from you and play that round of golf? And don't look for the answers too far - they should come from your accountant, attorney or lender. If they are not questioning and challenging you, then get new ones. Bottom line - get some help - fast.

If reading this makes you uncomfortable as it seems a bit like your company, then blind faith is not an option. The longer you delay the worse the situation will become. If your business is salvageable then make today the first day of its recovery. If it is not, then make today the first day you put positive steps into action so you can get on with the rest of your life; whatever that looks like for you. It may take time and cost money, but this is inevitable whether you do something or not.

Related Articles
  Master Effective Crisis Management Skills through the Media
  Crisis Communications Planning or What To Do Before During Or After It Hits The Fan
  What Are the Factors That Lead to an Economic Crisis?
  Knowing Your Rights with the Media and Press
  Managing Crises Before They Happen

Article Tags: Andrew Rogerson, business, Business broker Sacramento, business escrow, business for sale, Business ownership, business plan, due diligence, Entrepreneur, exit plan, franchise, franchise for sale, Murphy Business and Financial Sacramento, Sacramento business broker, Sacramento business ownership, Sacramento business valuation, Sacramento business value, Sell a business, succession planning



Related Forum Posts
Let's talk about financial stress - We all know that financial crisis has messed up our life at this moment. More than that, researchers believe that both employees and employers are more stressed than usually. That's why i want to find out your opinion and if financial crisis has influenced your business let us know in what way. And if you have any ideas how we can manage stress, just say it. We all need to hear it.
Re: Is Your Idea Worth Developing? - Hi Nana, I think another way to measure whether or not your idea is worth developing is if you ask yourself these 2 questions and answer honestly: 1.) If I won millions in a lottery and never had to work again, would I still want to do this business endeavour? 2.) If I was diagnosed with a terminal illness and only had a short time to live, would I still want to do this business? If you answer "Yes" to both questions, then I say go for it!
Re: HOW DO I STAND OUT FROM THE REST? - I will like to ask you some questions. 1. What kind of online business are you into? 2.What kind of competition ar you contending with? 3.What is the rank of website on google? If you answer these questions, I will be able to answer your question very well
Re: Greetings, from Plunder Ventures - Hello Tristan, Welcome to the forum, I'm sure you will find answers to your questions here in the topics. There are always members online here who will be happy to help and answer any questions you may have, regards, Mal.
Re: Hi Everyone! - Hey Tim, Great to have you here. You'll find a friendly group of people that are willing to help and answer any questions you may have. Feel free to look around, ask questions and share your insights when you see fit. Regards, Alan


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What Aweber Can Do For Your Online Business

Effective Email Marketing Requires Planning

The True Cost of Employee Turnover

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.