Failed business – every entrepreneur’s worst nightmare. And what’s even worse is that this nightmare is all too common for all business owners. A 2019 study posted by CapForge shows that 11 out of 12 startups tend to fail – in other words, your chances of being a successful entrepreneur are less than one in ten.
However, before you become too spooked about starting up your own business, you need to know that a big part of these failures tends to change based on what you define as a failure because there are several ways you can get back up from loss. Just look at how Hetal A. Shah overcame her startup obstacles and prevailed in the process.
As an esteemed Indian American author, management consultant, YouTube vlogger, and blogger, Hetal A. Shah has been known to be among the few knowledgeable professionals in the business industry with impressive entrepreneurial skills.
While growing up in Mumbai, Hetal got excellent grades in high school and outshined some cultural activities. She started her career pretty early – starting her own trading business in 1990 during her college years. After that, she spent a couple of more years honing her entrepreneurial skills and eventually found work as a Product Manager and Marketing Strategy Consultant for technology startups. Hetal also volunteered for Boston Cares and Network of South Asian Professionals, where she served as the Social Events Chair and Professional Development Chair for NetSp. (NetSAP)
Then, in January 2001, she founded and ran Vox Populi, Inc., a telecommunications media startup in Boston. The company was made to help telecommunications carriers increase their yellow pages revenue via speech recognition technology solutions. But despite the company’s progress, it had to be shut down in April 2002 due to the lack of funds needed to keep it running.
It was an unfortunate incident, but Hetal decided it would be best to learn from the experience and opt for better strategies next time. Currently, she runs a YouTube channel, ‘Superhetalshah, ‘ and two blogs – Smart Robots and Startups Coach – where she shares her extensive knowledge and experience with the world.
After consulting with her on topics related to business failure, we learned of a few warning signs that you can identify and take care of before your company reaches rock bottom.
The earliest indication of a business going downhill is when you notice that your bank balance is severely depleting instead of growing – and being short on cash is never a good thing.
Lack of Sales
If you started the year with lots of sales, but now it has decreased, there are a few possibilities of where things went wrong. If you’re selling a seasonal product, it is customary to see sales drop after a specific time. There might also be a new competitor selling the same things your company is. You may have changed your manufacturer, and the quality took a nosedive. Either way, it is essential to assess the situation as soon as possible.
You Are Behind in Payments
If you are having trouble paying your employees, distributors, and suppliers, you are in a situation.
Think of it like a domino effect – you are not being paid, so you cannot bear others on time. As a result, you are now accruing late fees, and from there, things can go further downhill. In this case, it is essential to work things out with the people you owe and avoid using credit until you have a decent income to support it.