Is your business in trouble without you realizing it? What are the signs to look for? While there are numerous indications that your business is headed “downhill”, in this post, we’d like to address 3 of the most common and suggest a few possible solutions.
1. You’ve lost a big customer or contract.
This can happen for any number of reasons. Maybe the client has found someone else, or maybe they no longer need what your business offers. Regardless of the reason for it, losing one of your biggest clients or contracts can be enough to send your company on a downward spiral.
We’ve all heard the adage, “Don’t put all your eggs in one basket.” Here’s a prime example of the wisdom behind that phrase. Sometimes, this can’t be prevented – it happens seemingly without you knowing it, or maybe this particular client is the reason your business started in the first place!
The obvious solution is to do whatever it takes to boost sales and replace that lost revenue. But this is also an opportunity to evaluate your business and determine if it’s time to make some changes in how you run your company. For example, did you lose the client or contract because they need a service you don’t provide? If so, could you provide that service if you upgraded your equipment or purchased a new piece of equipment? In a case like this, it could be to your benefit to check out the advantages of equipment lease financing.
2. Customers take too long to pay.
When you’ve already provided a product or service to a customer who still has not paid the bill, it puts your own business in jeopardy. Without income, how do you pay your own bills?
Communicate clearly with your clients regarding the terms of the contract and the date payment is due. When they’re abusing your patience, you must let them know they’re important to you, but you need to discuss some options in terms of payment. It might be time to consider requiring prepayment prior to shipping, or charging more to these customers (to cover your own costs due to late payment).
If you’ve got too many customers taking too long to pay, or regular customers who repeatedly take too long, factoring might be the solution you need. Read more about factoring in this post. (See also: Collecting Money From Slow-Paying Customers.)
3. The relationship with your bank has changed.
If your line of credit has suddenly been reduced or your banker wants to review what you have for collateral against your loans or lines of credit, it’s possible that your bank has restructured their criteria or they’ve recognized that your business is in danger. Maybe they’ve noticed that your sales are slowly depleting.
If you’re finding your bank becoming more difficult to work with, it might be time to re-evaluate your financing options. Read more about lease financing vs. bank loans here.
There could be many more signs that your business is in trouble. Times can get tough, but don’t give up!
At Lease 1 Financial, we want to help your business thrive. Contact us today to find out how we can make that happen. We’d be happy to discuss the possibilities with you!
