6 Warning Signs of Financial Stress in Your Business: How Small Businesses Can Tell if they are Heading Into Uncertainty

It's a difficult time for small businesses. With the economy in its current state, it can be hard to tell if your business is heading into financial uncertainty or not.

Stress takes its toll on the best of us but it can have a negative impact on anything from staff care to a reduced quality of your product to a further reaching effect on your loved ones or you as a person. In turn, this can make cash flow struggles even more serious.

This blog post discusses 6 warning signs that may signal you are going down the wrong path and need to make some changes before it's too late!

1. You're the person always firefighting.

No matter how well you try to stick to your business plan if things aren't going your way then it can feel like you're always putting out fires. Are unexpected types of expenses hitting you regularly? Are you finding yourself dipping into the emergency fund too often? Are you using credit cards more than was in your plan? These are all signs that your financial situation isn't as stable as you'd like.

The biggest factor here is usually how often you review your business plan? Things have problem changed since the plan was put in place - and for small businesses, things change every day.

Not being organized is a surefire way of letting things slip through the net. Checking finances daily in Futrli allows you to keep track of how you’re performing against your targets. Using add-ons can automate long-winded procedures such as logging receipts – simply take a photo on your smartphone and upload it directly to Xero or Intuit.

2. Your best people head for the hills and you’re sifting through a mountain of CVs.

Your most talented creatives, managers, and support staff are dropping like flies. You thought you’d made it seem as if things were ticking over nicely, but your employees are clearly more intuitive than that. When your best people go, it’s time to look at why.

This is a tricky one as it's both a symptom and a cause of financial worry in your business. Employees are the lifeblood of small businesses so when they leave unexpectedly it can be a huge spanner in the business plan. Exit interviews and honest communication are the best way to work out why people are leaving.

If it is money worries then transparency and a clear financial business plan is the best way to put their minds at ease. A well-thought-out budget or cash flow forecast can show your employees that their paychecks are going to be coming in every month. If trust has been shaken then consider bringing in a consultant or advisor to help so that there is a third party input.

3. You’re taking uncalculated risks outside your business plan

Two schools of thought here. You've either not got a business plan so all of your choices are uncalculated, or you've got a business plan and small business curveballs are making you divert from it.

Without using real-time comparisons of data you really don’t know exactly where you stand. Risk-taking becomes dangerous: imagine employing new staff to increase sales, but they don’t make any, can you afford to gamble on this? Playing with what-if scenarios allows you to make decisions when you’ve adequately explored your options.

4. Out of sight, out of mind - you've stopped looking at your business plan or your finances

We've all been there. Avoiding looking at your bank balance, assuming everything is fine because it's not currently on fire.

Time is of the essence in the working week. While you’re busy managing staff, winning contracts, and generating more business, what is your team doing? Are they hitting their targets? Are they working on the right objectives? How is the team environment?

There are so many factors when it comes to running and planning for a small business and chances are if you've stopped looking at them, you might be heading off a cliff.

5. Lack of communication inside and out of your small business

Communication is key. You and your managers are working towards the same goal, which needs to be remembered from both sides. You will certainly have external stakeholders as well. They're all going to have questions and as the small business owner, you're the person that they're going to ask.

Futrli allows you to add an unlimited amount of team members and employs granular permission settings so you can control what data is shared – don’t worry, we’re not advising you to share the visibility of your bank account with your team.

6. You’ve stopped laughing.

It’s not always fun and games but the reason you started (and subsequently nurtured) your business is because you enjoyed it, right? If the worry of day-to-day proceedings has overtaken your zest for achievement and success, it might be time to look inwards at things as a whole and see how you can improve things. Once you do, it’s likely your cash flow will pick up too.