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Most of us know someone who is either employed by a business that is struggling financially, or we know a business owner who is not doing so well.
Unfortunately, libraries and bookshops are fully of positive literature on "How to Succeed in Business" and "Make Money in 60 Seconds", but there are very little references to "How to Know when to Close the Doors".
Have a look around, even search in Google. You will find thousands of articles and books all telling you how to succeed in business and make million's before you are 25. However, I am always surprised at the lack of reference material telling business owners how it is. The cold hard facts - what if your business is failing - what do you do? And just how difficult it is running a business and how many actually do fail.
So, is a failed business owner a failure? No, not at all. In fact many psychologists will tell you any entrepreneur needs to fail before they succeed as it is the only way they will learn.
However, this does not ease any immediate pain or help a business owner out of a hole.
In 2010/2011, suicide rates increased by 15% for Business Failures. The depression one can sink into as a result of a failed business is sometimes too dark for them to get out of. The guilt one feels and the pressure and stress can be life changing, and sadly for those with families and friends...sometimes life ending.
There are very clear signs that a business is in trouble financially. I am not going to cover company thefts or fraud. What I am writing about, in this article, is the average joe who's business is just not viable anymore.
It will be a harsh reality for a business owner to face. Often is the case that friends, employees and family know the business has failed before the owner is willing to accept it. We invest every bit of ourselves in our business. We become our business. From the minute we wake up, to the minute we go to sleep, it becomes our primary focus. To have that end has been likened to the death of a loved one, and one must be allowed to grieve.
So, to the point of this article. The signs a business is broke.
TOP TEN SIGNS A BUSINESS IS BROKE
1. You have contacted at least 5 different lenders and no-one will loan you any further funds
2. Your creditors list is 90 days out and bigger than any possible income or invoices on the debtors list
3. You have personally paid for staff wages more than twice in the past 2 months
4. Staff wages are consistently paid late
5. You are ignoring emails and calls - every day
6. Staff are resigning in droves
7. The minute you make any money it is all gone
8. Superannuation/Insurances are more than 12 months overdue
9. BAS/TAX returns are 12 months overdue
10. There is no money in the account (obvious, yet still not a sign for some)
Business Failure is not easy to accept - for anyone. It is time to provide good solid advice when the business is not succeeding.
Look out for our next article on what to do when the end is definite.