Warning Signs of an Unhealthy Business

Every business is drastically different, run in a way that the owner sees fit. Each boss lists important statistics they believe are vital to the success of the company. Some owners might get caught up in the passion they have for a growing business, and may lack the insight to recognize if they are actually hurting the group. Here are some warning signs that your business is not being run in the most efficient and healthy manner.

- Inconsistent Policies and Procedures- A lack of consistency in policies can put a low ceiling on your potential growth as a company. There are so many little things to be taken care of each day (updating databases, handling complaints, etc.) that if there isn’t a general template to working through these tasks, your business will be running inefficiently. A solid process for policies and procedures is vital to keeping employees working hard and customers happy.

- Rising Fixed Expenses- The most important thing to determine is what expenses are fixed versus variable. If fixed costs are rising as the rate of sales is growing, your company could be at risk if a downturn in sales occurs. It may end up being vital to add costs to keep up with rapid growth in sales; however, it’s necessary to evaluate trends of sales and fixed costs before adding additional costs.

-Minimal Repeat Business- Tracking repeat business is essential in measuring customer satisfaction. Acquired growth from new business is a sign of a healthy company; however, it may cause you to overlook problems in your products or services. How satisfied are your customers? Are they coming back or referring to other businesses? Healthy businesses see increased sales from current clients and returning customers as a good measurement tool for how well the company is being run.

-Disconnected Employees- Often considered the problem themselves; individuals who are not working to their potential may be a warning sign of a more core issue in the office. Understanding why employees are becoming disengaged (possibly too much work with little appreciation, or the bad attitude of a manager) is crucial to maintaining the health of your business. Get to the root of the problem rather than pointing the finger of blame, and it will help fix the atmosphere within the company.

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