The 5 Warning Signs Your Business Needs Help

In challenging and dynamic market conditions, business owners can easily find themselves caught up in the day-to-day operational activities as they concentrate on delivering products or services efficiently. ASIC data, published mid 2024, reinforces how difficult the current business environment is, with data showing more than 11,000 companies entering administration for the first time in 2023-24.

Running a business demands attention and resources, but monitoring your company’s financial health can be overlooked or pushed to the bottom of your list of priorities. While all operations like sales, inventory management, customer service and fulfilment are crucial, managing financial health is equally important for remaining solvent and the long-term sustainability of your business. In many cases, signs of deteriorating performance are missed until a company finds itself in financial distress.

Recognising these signs and acting quickly to tackle them can help you prevent unnecessary decline in your business and challenges down the road. In this article, we’ll explore five critical warning signs that your business might need help, along with solutions for addressing them.

The 5 Warning Signs Your Business Needs Help

Warning Sign 1: Declining Financial Health
Your business’s financial health is like its vital signs – when these indicators start trending downward, it’s time to pay attention. Are you experiencing consistent cash flow problems? Perhaps you’re struggling to pay suppliers on time, or your profit margins are steadily shrinking. These aren’t just temporary setbacks; they’re crucial warning signs that require immediate attention.

Look out for patterns such as:

• Regular use of overdraft facilities to cover operational costs
• Increasing accounts receivable aging
• Inability to take advantage of early payment discounts
• Declining gross profit margins
• Growing reliance on credit cards or short-term loans

Consider conducting the following as part of financial health check:

• Cash Flow Analysis: Examining, tracking and evaluating the inflows and outflows of cash within your business to assess its financial health and liquidity will help you understand where your money is going and identify areas for improvement.
• SWOT Analysis: Identifying strengths, weaknesses, opportunities and threats will help you make more confident business decisions.

It’s essential to seek professional guidance if these audits expose financial issues. Explore Bentleys’ business advisory services to get started.

Warning Sign 2: Difficulty Keeping Up with Compliance

In today’s complex regulatory environment, staying compliant isn’t optional – it’s crucial for business survival. If you’re finding it increasingly challenging to keep up with tax obligations, regulatory requirements, or industry standards, this is a clear indicator that you need support.

Common compliance challenges include:

• Missing BAS or tax lodgement deadlines
• Uncertainty about changing regulations in your industry
• Lack of understanding around legislation and requirements for tax compliance
• Inadequate resources or practices to meet financial reporting obligations
• Outdated technology and processes causing inefficiencies

Compliance issues can escalate quickly, resulting in legal and financial complications that are both costly and time-consuming. To avoid this, consider the following:

• Setting up automated systems for tax and payroll processes
• Regularly reviewing regulatory requirements
• Partnering with an advisory firm that offers tailored compliance support

Warning Sign 3: Employee Morale is Dropping

Your team’s engagement level is a powerful indicator of your business’s overall health. When employee morale drops, productivity typically follows suit, creating a downward spiral that can be challenging to reverse without intervention.

Watch for these telling signs:

• Increased staff turnover
• Rising absenteeism
• Decreased productivity
• Poor communication between teams
• Lack of enthusiasm for new projects or initiatives

Low employee morale often signals underlying issues with business processes, leadership, or organisational structure that require professional assessment and guidance to resolve. Left unaddressed, this can significantly impact your business’s overall performance. Consider investing in the following to keep your team productive and engaged:

• Conduct employee pulse surveys to understand concerns
• Introduce workplace initiatives focussed on boosting morale and encouraging team building
• Support professional development for team members and invest in areas that will enhance retention, like wellness programs

Warning Sign 4: Lack of Strategic Direction

Are you struggling to grow or adapt to market changes? Businesses without a clear strategic direction often face stagnation. If your business is struggling to innovate, adapt to market changes, or maintain competitive advantage, you might be suffering from a lack of strategic direction. This could manifest as:

• Inability to articulate your business’s goals for the next 1-3 years
• No clear plan for growth or expansion
• Difficulty making decisions about investments or new opportunities
• Struggling to keep pace with market changes
• Unclear competitive advantage in your market

Without a roadmap, it’s challenging to achieve sustainable growth and maintain a competitive edge. A clear strategic plan, developed with professional guidance, can help chart a course for sustainable growth and provide metrics to measure success along the way.

Working with a business advisor can help you:

• Define clear goals and measurable objectives
• Develop a strategic plan tailored to your industry
• Implement processes to monitor progress and adjust as needed

Warning Sign 5: Feeling Overwhelmed as a Business Owner

Perhaps the most overlooked warning sign is the toll that running a business takes on owners themselves. Do you find you’re constantly putting out fires instead of focusing on growth, or finding yourself unable to step away from day-to-day operations? Trying to manage everything alone can lead to:

• Working excessive hours without corresponding results
• Difficulty delegating tasks
• Constantly feeling behind on important decisions
• Feeling isolated in decision making
• Unable to take time away from the business

Over time, this can take a toll on both your business and personal well-being. Consider the following strategies to regain control and confidence in your business:

• Identify non-core tasks to delegate to team members or external providers
• Automate repetitive processes using technology (e.g. AI-powered tools)
• Partner with a trusted advisor for guidance – they can help streamline your operations, enabling you to focus on strategic priorities.

Taking Action

Recognising these warning signs is the first important step in getting your business back on track. Regular meetings with your accountant are important for reviewing patterns and identifying any negative trends before the ATO comes calling. At Bentleys, we understand that acknowledging your business needs help isn’t always easy, but it’s often the crucial first step toward positive change and sustained success. Our experienced team of advisors can offer practical, tailored solutions that address your specific needs, whether that’s financial restructuring, compliance support, strategic planning, or operational improvement.

Don’t wait until these warning signs evolve into crisis points. The earlier you address these challenges, the more options you’ll have available to overcome them. With our expertise and your commitment to improvement, we can help your business not just survive but thrive. Reach out to our team today to find out how we can support your business’s journey to success.

Want to know more about how Bentleys can help you?

Make a time for a chat with us today. We’re here to help you get where you want to be.

Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.