Code Red; Check Your Business Operations By Javnyuy Joybert
In the military, Code red stand for danger, intruder, and a code red is a call to put in place safe measures to be implemented.
Signs your business could be operating under code red conditions and need urgent attention by you the entrepreneur or a consultant. I always say, every dying business sends out certain warning signs before the eventual collapse.
1. Consistent low sales
You have noticed your business is experiencing low sales month after month then you are operating under code red. Sales is the lifeblood of your business. Pay attention to your sales figures
2. Demotivated team members
Team members will always be strong assets for every business. If employees are demotivated, that is a strong code red. For a team to function to the best of it ability, all members must be fully engaged and fully committed.
3. Poor cash flow
One key financial indicator that a business is dying is negative cash flow. Check the strength of the business cash flow
4. Poor clarity
If the business does not have clarity what the business does, the target market, how it makes money, future expansion plans, it will like be a failed business
5. Weak leadership and poor decision-making
A business with an entrepreneur with poor leadership and decision-making skills is heading for failure. As an entrepreneur, you cannot hide in the background. By default, you are the person who will make the big decisions for your company.
6. No structured processes
The business has no laid down processes of how things are done in a standard way. No clear cut processes of the various team members responsibilities
7. Poor recording of financial data
A business with no full accounting and finance system is heading for the grave. When there is no effective tracking finance, system it is not possible to track the level of profitability. You must know, down to the last dime, where the money in your business is coming from and where it is going in order for your business to succeed.
8. No New Customers
The earliest sign a business is failing is when there have been no new customers for a couple of weeks or months.
9. Insufficient operating funds
New business owners always underestimate how much money they will need to get the business started and already functioning business owners always fail to carefully budget for the daily working capital their business will need.
To arrest your business from dying, analyze your business taking into consideration the mentioned points above and take corrective actions.
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