When entrepreneurs start a business, they never think about the potential downsides. Instead, they focus on the never ending positives that wait on the horizon. If you invested in this ideology, it is possible to come back to earth with a bump. Although it isn’t impossible to succeed in the industry, most companies go under. And, the odds are not in your favor. However, some bosses just don’t see the signs when they are staring them in the face. With that in mind, here are the tell-tale signs that should set off alarm bells.
Hiring Put On Hold
Your employees are the lifeblood of the organization. Simply put, a company cannot succeed or grow without great people. Indeed, new workers need to be added on a constant basis to keep the office fresh. So, if there is no one coming in, the future doesn’t look positive as the workforce will stagnate. Also, a hiring freeze is a sign that you don’t have the money to pay employees to join the team. And, a lack of money is the main reason more than half of the businesses that start up fail within the first year. Without the cash, you can’t stay in the black and out of the red.
Stock Is Going Down
Lots of companies float their stock on the exchange because it is a great source of revenue. However, the stock market is much more than a potential money pit – it is also an indicator of success. Most bosses don’t know this, but the stock exchange never lies. Sure, there might be fluctuations because of certain stimulus that hits the public domain, but these are not a constant. If your stock is in free fall and isn’t bouncing back, the omens are not good. In fact, this is probably the worst sign of all as the market determines your company’s value.
Talking To Liquidators
As soon as you begin to ask questions like ‘how much does liquidation cost?’ the firm is in bad shape. Quite simply, healthy businesses don’t need the answers to such questions as it isn’t on their radar. The money is rolling through the door and everything is going smoothly, so they only need to focus on further expansion. Companies that are in trouble need to think of ways to preserve assets or to get out of debt by limiting the damage. Anything from liquidation to insolvency and administration are tell-tale terms you need to act quickly. Of course, bankruptcy is the ultimate.
People Are Talking
The industry is like a school. When things are not going well, it is a small place full of gossip and funny stares. And, in your case, the gossip and eyes are all coming in your direction. Now, you might wonder how your peers would know about your situation before you, and the answer is denial. Lots of bosses have an ego and don’t like to admit when they are going down. Your peers do not have the same qualities regarding competitors. They see the signs and the rumor mill starts to turn.
If you see any of the above, you have to act now to save the firm from going bust.