Moorestown, New Jersey Business Law Attorneys
While there are some reassuring signs that the economy is doing better, many experts believe the recovery will be temporary or rather weak in the long run. The rate of job growth is concerning to many since the economy does not appear to be generating the number of jobs needed to fuel a real recovery or keep pace with the number of people qualified to enter the job market. As a result, small businesses can expect to face even more challenges in the months ahead. While each business is different, there are certain warning signs that indicate a business may be failing.
What are the Warning Signs of a Failing Business?
Small, independent or family-owned businesses don’t often have the kind of cash reserves or investors needed to help a company weather difficult economic times. As a result, when job loss, foreclosures, or bankruptcies ripple through a community, the effects can be devastating to a business that depends on a steady stream of customers who use their services or buy their products. Identifying the warning signs of a failing business can help business owners take preventative steps before it’s too late.
While each case is different, business owners should take the following warning signs seriously in regard to the vulnerability of their company:
- Overall, your customers are buying less
- You’ve noticed fewer customers in your store or contacting you
- Your inventory exceeds demand while your back order rates are steady
- Your monthly cost-to-sales ratio indicates an increase in costs
- New customers are not returning and old customers are disappearing
- Sales orders, order values, customer contacts, and order fill rates are trending down
- Your accounts receivable is growing because more and more customers are unable to make on-time payments
- Current customers or clients are not renewing contracts
- You’re not able to get new lines of credit for your business
- Your employees are unhappy
Protecting Your Business in Difficult Economic Times
While you may be limited in terms of what you can do as a company to combat the sluggish economy, you can take legal steps to reduce your business tax and exposure to unwanted liability. Reevaluating your incorporation as a C corporation, S corporation, or Limited Liability Company can reduce your federal income tax and afford you other kinds of protections in the event your company fails.
If you concerned about the current economy and the health of your business, contact Moorestown, New Jersey business law attorneys at LaVan Law today.