Many entrepreneurs have the passion and drive to aim high to even begin a start-up in the first place, so it’s no surprise that the end goal would be to create an established company. Sadly, not all businesses make it that far. According to Creditsafe’s 2015 analysis, businesses aged between 3-10 years had the most insolvencies, almost three times higher than companies under 3 years old. This could arguably be down to the fact that funding for start-ups runs out after three years, or it could be that businesses have become complacent, thinking they have ‘made it’ and don’t need to work as hard anymore. Even established businesses face challenges, and no real business can truly relax in this ever evolving world. If you’re an established business and you feel your business is slipping, make sure you aren’t doing any of the following:
Sticking to your usual processes
The biggest trap you can fall into when running a business is getting comfortable. Yes, things may be running smoothly, yes money could be coming in and your figures could be going up, however never get too comfortable that you don’t put any effort in anymore. Constantly revise your sales pitches and re-visit your business plan. There are always changes to be made and different approaches to be adapted. Business doesn’t stand still, and if yours does you will get left behind. Mixing things up and trying new things could bring you a better return than you already have so never be afraid to try.
Getting lazy in marketing
The saying goes; ‘if you’ve do what you’ve always done, you’ll get what you’ve always got’. If you’re struggling to move your business forward, it could be because you are in a routine. Too much of a routine could kill your creative process and stop your business growing so always be open to change and evolving trends. Is your website mobile friendly? Are you using technology to advertise or market your business? Google wasn’t invented until 1998, and 20 years ago we didn’t even have the internet. All we had for advertising was print media and word of mouth; things have moved on a lot since then so rethinking your marketing tools could benefit your business massively. There are younger, hungrier companies looking to take business away from you, so always try to stay current and on trend to get the best out of your marketing efforts and out of your business.
Brushing past due diligence
Due diligence is key to security within business, yes it may not protect you 100% of the time, but it gives you a good head start. Credit checking companies before doing business with them can help you make more informed decisions such as what credit limit to give a company and how long to set their payment terms. A Creditsafe company credit report can show you a company’s payment behaviour along with key financials such as mortgages, loans, and adverse CCJ information. If a company has a CCJ issued against them, it means they haven’t paid an invoice and have been taken to court over it. By credit checking a customer before doing business with them you can make sure you are aware of the risks involved if you do choose to do business with them. Don’t forget to monitor your suppliers. Our Risk Tracker can monitor all customers and suppliers on your database and will alert you if anything changes on their company credit report. If your supplier becomes insolvent, it could stop supplies coming into your business with short notice which could potentially damage your sales flow.
Taking payment for granted
You’re an established business for a reason- your efforts have paid off and you have had enough money coming into the business to keep you stable and running for a good amount of time. One common mistake of established businesses is that they take payment for granted. If you have customers that you have never had problems with before, you could start to trust that they will always pay you; but no company is invincible.
With fraud on the rise in the UK and late payments keeping businesses’ looking over their shoulders, no business should assume that they will get paid on time every single month. The chances are that you have been bitten before if you are an established business, and maybe you have taken action to stop that from happening again; but never underestimate the evolving economy and unfortunately the evolving criminals. People are getting smarter in the fraud business and companies as well as people are getting caught out all the time. This also has a knock on effect; if a business you are dealing with hasn’t been paid, then they could withhold from paying you. The domino effect ensures all companies need to check both their customers’ and suppliers’ company credit reports before doing and during business with them as any business at any time can become insolvent. See here what our company credit report can show you about a business.
Thinking you’re too big to chase late payments
If you’re a larger company, writing off bad debt could be second nature to you. Often it can be more expensive to go through the courts for money owed to you than the amount the invoice is worth. Lots of businesses think it’s not worth the hassle and don’t bother chasing late payments or customers that haven’t paid at all. Remember the sooner you get money into the business the better your cashflow will look. Also, customers not paying you is lost money and if it keeps occurring could damage your cashflow significantly; even the smaller payments add up. If you do decide to chase late payments, there are different avenues you can go down. You can either take on debt chasing letters, or you can go down the legal route of debt recovery. Work out the best way to do this through our blog post and get unpaid invoices paid.