As a business owner, you’re always wearing many hats. You’re facing challenges and trying to think about the next step, manage staff and suppliers and general day to day operations.
No doubt you want long term financial stability, but do you know what signs to look for to ensure your business remains stable and viable?
This is where we, as business advisors and accountants can be valuable. We can provide that long term view of your business that you may not necessarily see yourself.
According to McDonald Vague, one common mistake that business owners and managers make is overlooking or delaying action on warning signs. For example, persisting with unprofitable ventures or neglecting cost-cutting measures can be detrimental. Seeking professional advice and acting promptly are vital.
In reality, financial trouble rarely emerges overnight. There are usually warning signs or “precipitating events” such as declining sales, increased competition, rising costs, or poor management decisions.
McDonald Vague point out that if you’re experiencing any of the below warning signs, your business may already be in trouble and its time to take action:
- Struggling to fulfil orders due to insufficient funds for raw materials.
- Facing credit disconnection due to delayed payments.
- Inability to accept new orders.
- Outstanding taxes owed to the IRD, particularly GST and PAYE.
- Raised concerns by your accountants regarding cashflow.
- Applications with the bank for lending overdraft facilities declined.
- Threats of legal action.
Don’t wait until it’s too late. Take immediate action to address these warning signs.
- Negotiate compromises with creditors and develop a plan to pay off business debts.
- Seek guidance from qualified professionals who can provide tailored advice.
- We’re here to help and advise you in these situations.
As managers, you have the power to steer your business away from trouble.
- Act promptly, mitigate risks, and secure a prosperous future.
- Stay vigilant
- Review financial statements
- Know your challenges and opportunities and
- consult the experts to make informed decisions.
By noticing warning signs and taking timely action, you can fortify your business against financial instability and ensure long-term success.
