By recognising the signs of financial trouble and acting quickly, you give your business the best chance at survival.

1. Reduced cash flow and profitability

Cash naturally comes in and goes out of your business. But if you find that you’re always in need of more cash than you have, your business may be under financial strain.

Some of the signs your business might have a reduced cash flow include:

  • a large cash deficit
  • regularly late customer payments
  • difficulty paying your suppliers
  • low profit margins.

2. Changes in customer behaviour

Falling demand for your products or services can have a huge impact on your customer base and bottom line.

Changes in customer behaviour might include:

  • a decrease in sales
  • loss of major customers
  • more complaints or refund requests.

If you’re experiencing these changes, you may want to communicate with customers to ask for feedback. This could include sending a survey or reaching out by phone or email. 

3. You're not able to pay debts and bills

If you're having trouble keeping up with your bills or paying them on time, it could be a sign of financial trouble. Missing payments may suggest that your business does not have enough funding to continue running.

If you’re in a position where your debts are mounting, you need to look for ways to improve your cash flow. Think about:

4. Losing your staff

Losing staff can be an indicator that your business is in financial trouble. If you often need to replace staff, you may be spending a lot of time and money on training new people.

If staff retention is a problem, it's important that you identify why to protect your bottom line. Think about:

Get your business back on track

It’s important that you resolve any signs your business is in financial trouble as soon as possible. Putting it off may cause issues to get worse and result in needing to close your business.

To help get your business back on track, consider the following tips:

Seek professional advice

If you have concerns about the viability of your business, seek professional advice from a:

  • tax practitioner
  • bookkeeper
  • solicitor
  • insolvency practitioner
  • business adviser.

Seeking advice as early as possible helps you address financial issues before they become unmanageable.

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