You can look at your startup as a series of on-going trials and errors. Some things you try will work while others won’t but you continue on anyway because after all, you’ve poured your entire life into your new business with hopes that it will grow and thrive. There will be times when you’re sure you’re doing everything right because all is going well. Then suddenly, out of nowhere, an unexpected obstacle is before you, causing you alarm and making you wonder which way you should turn.
Every startup has its up and downs as does every established business that’s been around for years. But a dying business will send up a red flag indicating that something’s gone astray. Knowing how to recognize when your business is heading down the pipes is key to getting things back on track once again so you beat the odds and become one of the new businesses that makes it. The smart entrepreneur will recognize when something’s going wrong and will avoid the disaster by taking certain strategic measures.
They say that in order to defeat your enemy, you must first know your enemy and to you, the startup founder, your main enemy is called defeat. Here are some of the warning signs which may indicate your startup is headed toward failure.
Sales Are Consistently Low
This is the most obvious sign that a business is dying because sales is the lifeblood of every business. While it isn’t unusual to see sales dip now and then, it is not normal for sales to remain low. But low sales can be turned around if action is taken fast enough. The only way to increase sales is to first determine what is causing the lull and whether or not it’s an internal or external problem. Once the problem has been identified, a strategy much be quickly developed and implemented to bring sales up to an acceptable level.
The Business Has No Positive Word of Mouth
Think about your own habits as a consumer. If you’re looking for a product to buy and you have many businesses to choose from that offer that product, you’re likely going to make your purchase from either a business you already know or from one that has a positive reputation. You’ll stay away from any business that you cannot find any information about either through recommendations & referrals or via online testimonials and reviews. It’s important that people are talking about your business and what you sell. Because when no one is mentioning your business, then it really doesn’t exist, at least not to most people.
You’re All About Vision And No Execution
If you spend most of your time thinking about what you should be doing instead of rolling up your sleeves and actually do those things, your startup is most likely on the road to failure. There are countless stories out there about startups that were run by brilliant people who knew their industry well and how everything works but because the founders were simply not willing to “get dirty” so to speak, their businesses went belly up.
You’re More Interested In Building a Product And Not a Business
If you are focusing most of your attention and efforts on developing your product rather than thinking about revenue, your startup is headed toward disaster. Your product alone won’t pay your bills as you need to sell it in order to make money. Sure, it’s fun to develop and build a product without thinking about money but that’s called having a hobby and not a business.
You Don’t Understand The Market You’re Trying To Serve
It can take a startup founder years of living and working in his or her given market before being able to truly grasp it. You need to have a deep understanding of the market you’re trying to serve and that takes research, testing and a whole lot of trial and error. You cannot expect to succeed by simply telling your target market that they need to buy your product as consumers are much smarter than that. This is why market research is critically important before launching any business big or small.
You Aren’t Offering Anything New or Different
To remain in business, you cannot afford to rely on your past glories alone. In order for your business to do well, you need to keep things fresh by showing that your business is innovative and one that’s growing. When nothing changes, your existing customers will become bored and you won’t be showing potential customers that you’re very interesting. People by nature love new things and they’re very willing to give new products and services a try. By regularly showing some innovation and progress, you will always be in the minds of your customers.
It’s always a risk to start up a new business as right from the get-go, the odds of making it are stacked against you. The most astute startup founders can decrease the chances of succumbing to failure by understanding the warning signs of an impending collapse and taking action immediately.