Ensuring the success of a startup is one of them. However, what would you do if your business is just not working? It’s a million-dollar question, the answer every entrepreneur wants to know. Small Business Administration states that almost 20% of businesses fail in the first two years of their life. Nowhere does it say that your startup will fail, but a failing business will give out, indicating that it is not worth the investment.
Entrepreneurs often miss these signs and continue to pour money into what is quickly becoming a money pit. In all fairness, you wouldn’t want to do that, so get to know the signs that your business is not worth investing in anymore.
Here are a few signs that you must familiarize yourself with.Securing a Bank Loan Becomes Difficult
Out of all institutions, banks will first know if your business is floating or about to sink. Understanding the financial position of your business, the bank will hesitate each time you apply for a loan. The bank management will decide if you will get more loans from there on or not when keeping an eye on your business’s finances. If anything, take it as the earliest sign that your business is not where it should be.
You Are Losing Clients
Clients seldom come quickly, and when you see them leaving contracts midway or losing interest in doing business, know that something is wrong. Know that clients always come and go, but when your business loses clients that have been around for months or years, it is time to worry. Finding out why they are leaving and addressing the problem may not work after all.
He was Consistently Falling Share Prices
Your company’s stock prices reflect the situation it may be going through. Expenses of a growing business will continue to rise, whereas those of a struggling business should plummet. Seasoned investors will know the actual situation of your business and may withdraw their investments promptly. It
The Investment Brings No Results
Entrepreneurs invest in the business, knowing that it will show results—every business, whether small or significant, needs investments from time to time. Businesses grow over a period, especially when more investment comes in. At times, even huge investments don’t show results and go unnoticed. Finances and cash flow don’t reflect that you recently invested considerable capital. Know that this doesn’t include temporary stagnation and a negative cash flow. 
If this situation persists, then it is time to worry. When it does not, despite repeated investments, the business may fall; also, note that a negative cash flow for a year or more is unacceptable as it halts the company from growing.
Poor Employee Retention
Employees always come and go, but if only a few are willing to leave the company, your business is in trouble. Reducing employee retention is a sign that your business may not be worth investing in for various reasons. Why are employees leaving the company? It would be best not to worry about freshers leaving the company, but seniors going to the company is an alarming sign.
Finances Are in Bad Shape
No matter how much money you invest, the finances show no signs of improvement. There is nothing to worry about. It is just an isolated occurrence. However, if it continues for a year or more, something in the company needs fixing. Such companies go into a mess for many reasons, and there is no fixing something that is not worth it.
Dwindling Profits
No business can survive without profits for a long time. Reducing earnings for a quarter or two is one thing, but dwindling profits and barely reaching breakeven are alarming signs. It means that your business is investing more money at a stage, which may be just a futile effort. Such companies are not worth investing in as they’ll not survive long.
Management is in Damage Control Mode
Managers bear the brunt of employee backlash as reduced profits delay salaries and bill payments. Managers step forward to control the damage but can only do so much. Eventually, managers grow weary of the same daily routine and leave the company. Consider other options if your managers are in the same mode and spend most of the day settling financial quarrels.
Review every aspect of your business and identify if something needs addressing. It is best not to inject more money into a dwindling business and start considering other options at the end of the day.
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