Many times, you won’t know you are this close to collapse until the cracks reveal themselves, then the stress of repair and the tension and discomfort that accompany confusion are inevitable.
You might think you have everything under control until you are forced to surrender. However, it may not be your personal life facing this downside, but your business, which is showing signs your company is about to crash.
The ultimate focus of a crashing company is how to quickly fix it and preparing properly and rigidly for any eventuality is vital. Also, knowing when to cut out on your losses and step out to re-invest on time is an avenue to salvage your company from a potential crash.
Furthermore, investing in properly trained personnel to work in your company is one of the best ways to prevent your company from crashing in the first place.
Read on as we bring you 7 signs your company is about to crash and how best to remedy this unfortunate scenario before it becomes a reality.
7 Signs Your Company Is About To Crash
In Nigeria alone, after the border closure in 2018, about 272 businesses keep shutting down on an annual basis, and that explains the decline of the country’s economy. While some business owners tend to switch businesses, others tend to migrate to another region that favors their business. But in all these uncontrollable situations that affect businesses, some give a sign before eating into the fabric of the business gradually and these are mostly manageable. We have here 7 signs your company is about to crash.
1. No Or Lack Of Communication Between You And The Executive/Staff
If anything is to succeed at any level, there should be a level of communication between the parties involved, to build bonds, understanding, and collaboration. When your executives and staff are not communicating with you properly, this is the first sign of a collapse.
Some of these executives or staff might have reasons why they are not communicating effectively with you, reasons like you don’t go well with some information when it’s been passed to you, or maybe, they are in hiding due to their incompetence, thereby being unavailable to communicate with you is a quick solution to their fear.
Sometimes they speak, but If you don’t understand what they are saying while they are passing a piece of information to you, in most cases, it’s because they don’t know what to say or don’t even know what they are doing in your company.
You have to make a fast decision to either let the inexperienced ones leave or train them to know exactly what they were hired to do. Be proactive in your actions or risk falling out of business soon due to some inexperienced staff.
2. When Good Staffs are Leaving
One strong secret behind a successful business is mainly the caliber of personnel and staff working in that business, not minding the area of their specialty in the company. Great people are the backbone behind great establishments, so when you start seeing these resourceful people walk away from your company, something is not going well. Environmental occupation has a chain reaction, once one wise person leaves, the rest start getting uncomfortable and join the exit door also.
And more interestingly, unproductive people start stepping into your company—people who hate work and are lazy. Human nature makes all these extra attractions fall into place and once success-driven folks start leaving, the rest who have the same vision start skirting away also and in advance, the other set of people across the fence sneaks into your business.
One can build a company from scratch and even train personnel, however, once the good ones you have are gradually leaving for some other place and the dumb ones are sneaking in too, take that as one of the 7 signs your company is about to crash.
3. When There Is A Dividend Cut
A dividend is a sum of money paid regularly (typically annually) by a company to its shareholders out of its profits (or reserves). The profits are either shared amongst the shareholders or reinvested according to an agreement. While some companies have more profits with just a few investors and some also have fewer profits with so many investors, the same way you can’t relate a dividend cut to a loss in a company’s account.
But the secret lies here, this is one of the 7 signs your company is about to crash because once a company starts facing tough times, which all businesses face, the first source of hands-on revenue is the company’s reserves. A company’s management won’t think about a dividend cut unless it’s necessary to do so.
A decline in the profit income of a company can be a variable that is heavily linked to the need for a dividend cut. Once there’s a decline in the profit inflow into a company, the expected spending and dividend shares will unavoidably be affected.
Pay calm attention to the industry you are in and how other companies around you run their affairs, see if there’s a similitude that the close margin to collapse is not solely for your company alone, and even when you get your answers, check for ways to solve the issue before it gets out of hand.
4. Repeated Layoffs
Layoffs are the temporary or permanent discharge of a worker or workers because of economic conditions or a shortage of work. They are sometimes unavoidable when things don’t strive in the market the way they were planned or imagined to. Although layoffs are not necessarily a sign of negative incidents happening in the company.
Some Executives do a bad job when it comes to management and it can be seen in the constant layoffs of staff they embark on to cut down personnel and meet up to a low profit or income in the company’s account. Layoffs to balance the company’s purse strings are not bad but when it is a frequent decision the management makes to cover up for their lack of good decision-making in running the company, that is where the threat lies.
You should know that many companies strive, even under several economic crises, to continue their business on almost the same scale even when things change, and that’s because for a time, arrangements to adapt have been made by the executive director of the company.
So, when layoffs become constant, the executive is not doing his job and should be laid off immediately. Always be on the lookout for such repeated layoffs because it’s one of the 7 signs your company is about to crash.
5. Willingness To Sell Or Dump Shares
In the stock market today, some people are known to influence changes and typically cause an upshot or collapse of any market value by any of their decisions. These smart money investors, are serious business-minded persons and when they willingly sell or dump their shares because of a suspected bankruptcy affiliation, be on the lookout because if such business sharks willfully want to drop their shares and leave, then certainly this is one of the 7 signs your company is about to crash.
Selling or dumping shares is not something that happens too often, so being watchful and being more critical in your assumptions is a vital skill to help your company stand. And in most cases, you might be the one who is tempted to sell your shares, some of the company’s assets, or possibly sell off the company’s assets to raise funds.
6. Drop-In Investments And Revenues
When there is a revenue drop in the company, that simply means the total amount of income in the company’s purse is declining. If the total amount of sales within a time frame is reduced, this leads to a decline in revenue. A drop in revenue to offset some of the company’s obligatory payments is absolutely one of the 7 signs your company is about to crash.
When investors bow their heads and don’t seem interested any longer in investing in your business or company, this will certainly limit the scope of your reach as a business owner.
7. Repeated Loss Of Opportunities
When your company habitually overlooks opportunities, expect a collapse soon. Many things can be the cause of this but the general issue is linked to a poor managerial system and must be addressed.
A weak company’s executive management system can crash a company’s fortunes and future in no distant time, so be on the lookout for this sign. Test the capability of your executives to recognize opportunities and see if they know how to grab one.
There are always signs shown before a collapse, nothing just happens unnoticed out of the blue. There have always been little signals to tell you that something is wrong and needs fixing. Your prompt response to this information saves you a lot of collateral damage, but when not taken seriously, you may stand a chance of wagging your head in regret at the end of the day, remembering things you would have done well.