4 Warning Signs Your Business Is In Danger

Updated: Apr 15, 2019




Nobody wants their baby ripped away from them.


This is a picture often used to describe how it feels like to shut the business you started and worked so hard on. Even the reality that many startups fail does not soften the blow.


Nobody nosedives into building their own business only to welcome defeat.


In our experience working with entrepreneurs, small businesses and startups, we’ve observed a handful of telling signs for when things are going badly – and when they’re about to collide with the worst.


To save you from danger before it’s too late, we’ve gathered four key warning signals that a startup may be on its way to shuttering.


1) Your team is unstable.


This looks like a number of things: a high turnover rate, inability to attract top talent, plummeting morale, and underskilled workers, to name a few.


From lost productivity to incurring high costs from recruiting talent, an unstable team is bound to send your startup to tatters. What energy and resources you could be channeling toward business development and marketing are instead going to people (mis)management.


It’s also possible to view this from the lens of your product: could it be that you can’t get anyone to buy into your vision, so that they don’t stay long-term?


Consider your vision, the incentives for people joining your team, and the culture you’re cultivating. How are these setting up your team to win, and if not, what can you do to change things?


2) Customers are not in love with your product.


No matter the changes you make to your product, no matter the marketing tactics you’ve used to lure in your target market, there just doesn’t seem to be a solid customer base for your offering. You can’t seem to get traction, and there isn’t a big enough user base to sustain your business for the long haul.


This may result from a lack of thorough knowledge of your market and what they truly need. Or – simply – there is no need for your product.


If you have competitors, study what they’re doing to succeed. If your product is the first of its kind, perhaps an experienced third-party could help you look into ways to improve it, pivot, or seamlessly transition into a new iteration altogether.


3) There’s a lack of focus.


Accounts from failed startups illuminate a startling commonality: many of them tried to be everything for everyone. Yet it’s been proven that the more defined and the more niche the market, the more agile your startup can be to cater to their needs. It’s also wisest to be the best at one thing for one group than to be mediocre at many things to everyone.


Market focus is one thing; product focus is another. If you’re constantly changing your product’s core service – so much that you can no longer recall and articulate your original vision – then it’s time to buckle down and clarify what you’re trying to offer and how you’re trying to achieve it.


The pressures of running a business are real, but it’s no help to you, your company and your market to have a muddy focus. Unlike pivoting, a shifty foundation doesn’t anchor your vision to begin with.


4) Passion is waning.


If there’s anything that got you into this business, it’s your passion. And if you, as a founder, is waning in their passion to win – be it from the challenges of running a startup or a lost interest in your vision – there’s little hope for fighting other battles your company is bound to encounter.


This is not the end, however, and it might be signaling something more important: perhaps you simply need a break, or it’s time to reconsider the management structure. All is not lost yet, save for the energy and zest you used to have.


Consult a trusted adviser, or better yet, consider hiring a more experienced team member to help troubleshoot your business as you recover.


Just because your startup may be reflective of any of the above doesn’t mean it’s time to pull the plug. The fact that you’re acknowledging this today means there may just be room – and time – to fix things before the worst.



About White Knight Group


White Knight Group is a revolutionary investor dedicated to partnering with startups and helping them succeed. Get in touch with the White Knight Group at whiteknight.asia.

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