10 Signs That Your Business May Be in Trouble

If you run a small business and are worried about your company's future, take a few minutes to honestly explore the following 10 points of weakness. Identifying signs that your company is in trouble sooner rather than later may make the difference between your business ultimately succeeding or failing.

10 Signs That Your Company Is In Serious Trouble:

1. Your company isn't able to cover regular payroll. Though you may eventually cover payroll late, this dire threat to your company's long-term survival needs to be dealt with immediately.

2. Your inventory rising is another risky sign. It means that your company isn't moving enough product. If this is true, your company is either displaying signs of poor sales or it's over investing in inventory that there simply isn't a demand for.

3. If the majority of your customers are shopping with coupons it could mean that your company's target customers are experiencing an economic downturn and are either unable, or simply unwilling, to pay full retail price for your products. While this may not be an immediate danger, it can be devastating if it persists.

4. If your competitors are shutting their doors this may sound like a good thing on the surface, but it may also be a warning that your shared market has changed and your company's personal bottom line may also be affected eventually. When your competitors begin to fold, immediately investigate whether it was due to poor business management or a more serious threat, such as customers losing interest in or not being able to afford certain products or services.

5. If a percentage of fixed expenditures rise in relation to income, it could mean trouble for a small business. For example, if your company once paid 25% of your total income toward rent and now that percentage has risen to 45% without the rent actually being increased, this is a sign of trouble ahead.

6. If you have extended your business' operating hours in an effort to earn the same income that your normally do, this is a sign that your market has weakened, which could very well spell danger ahead.

7. If your company is experiencing difficulty in obtaining credit from regular vendors this could indicate a weakening credit market or it may be a signal that your company's credit worthiness has begun to drop.

8. If your company is experiencing difficulties collecting from accounts receivables this can signify trouble. If those who owe money to your company aren't able to pay off their debts, your bottom line is most definitely impacted.

9. If your company is experiencing problems paying its accounts payables when due, this means your business is in serious trouble.

10. If your company has to request more time in order to pay its taxes, this means money which should have been factored into your budget to pay taxes has either been misappropriated or the sum needed to pay your company's taxes hasn't been earned. Either scenario spells trouble for a small business.

It is important to note that, alone, these signs may or may not indicate a threat. However, a wise small business owner will pay attention to these points and use them to evaluate their general business practices.