The Top 3 Early Warning Signs of Eroding Profits

For small businesses, profits never take a back seat, and watching out for changes in your profit stream before they happen is the key to a long and vibrant life for your company. It can be easy to miss the signs though, in the day-to-day race to find and maintain customers and clients, fulfill on orders and tackle everything from marketing to employee turnover. The early warning signs that your profits are taking a downtu can take many subtle forms. For instance, feedback from suppliers, customers, partners, staff, and others can feel like a constant stream of input when running a small business, but all of it must be considered if you are to have a healthy growth and strong bottom line. How does feedback tie into your bottom line and speak to your profits directly though? There can be so much feedback, in fact, that it is difficult to put it all together and prioritize what needs to be done and what it all means. What are the most important messages coming to you each day? While there may be important ideas, needs and input from all directions, when the messages you receive relate to your small business profitability, they take on added significance. Early Warning Sign #1: Orders are coming in a little slower and auto renewals have been delayed. Sure, there are seasonal shifts in every business, and you know your trends better than anyone. However, small shifts in orders can be a signal that is not to be ignored. Check in with your customers. Is demand for your products lagging temporarily? Are they satisfied with your offerings? Are any adjustments needed? By taking the initiative to reach out to them, your credibility as a trusted resource is renewed, even before you implement changes. Early Warning Sign #2: Is demand for your customers’ products flagging? Is their cash flow in a squeeze? Your business is a bellwether of your major customers, so keep an eye out. Business trends ripple throughout the marketplace. When business travel is down, this can translate into lodging and transport declines. How do these changes affect your business? Look beyond your business to the businesses of your major customers and spot those trends before they derail your company. Early Warning Sign #3: Are your suppliers under pressure? Are they having trouble processing orders? Are they accelerating your payment terms? Your business depends upon the reliability and quality of your suppliers. If they are cutting back, what do you need to know? You chose your suppliers carefully; now it might be time to secure a few back-up suppliers. This may impact your costs, product mix, overall quality and timeliness, after-sales servicing, and other factors. Again, taking initiative and being ahead of the storm saves the day. Watch out for these 3 profit early warning signs as you scan your small business market space. Donna Marie Thompson Creating your best profit solutions is my highest priority. http://www.expertprofitsolutions.com