Three Tell Tale Signs That It Is Time To Restructure Your Business
Added on December 9, 2018
Throughout the lifecycle of your business, from initial inception to the maturity phase, you will experience the need to make significant changes. This includes the reorganization of processes and procedures to your existing systems. It may also include the shake-up of teams and the employees that make up those teams. Business leaders that identify issues quickly and implement the necessary modifications position themselves to not only avoid disasters, but to grow their organizations well into the future.Those that lack this insight will struggle mightily and many will fail. The following information will highlight three tell tale signs that it is time to restructure your business.
Profit Margins Are Shrinking
The first telltale sign that changes need to be made is the most obvious one. When profit margins begin to shrink for an extended period of time there is an issue. At this point you need to begin fixing the problem by auditing the overall expenses, costs of goods sold, and salary to revenue ratio. One or more of these categories are causing the reduction in your net operating income. Examine these areas carefully and on a regular basis in order to alleviate any surprises. You should be able to formulate the necessary adjustments to your business based on this information.
Customer/Client Turnover Is Higher Than Usual
It is inevitable that you will lose customers/clients to your competitors based on the natural ebb and flow of business. However, if your customers/clients start jumping ship at a rapid pace or on a frequent basis it most likely means that they are no longer happy with your products or services. There are a great deal of external and internal factors that come into play here. It is crucial to build and maintain good relationships with your customer/client base and equally important to continually seek out new methods to make their lives easier. This will go a long way in ensuring long lasting relationships that will keep your business profitable.
Employee Turnover Is Higher Than Usual
If your business begins to feel like a revolving door where employee turnover is higher than usual, changes need to be made immediately. The exodus may be due to other companies offering higher compensation packages or it could be based on internal issues such as low employee moral. A few issues that cause low moral include broken promises made by management, ignoring constructive feedback from employees, favoritism, allowing negative team members to remain in place, and of course poor management tactics.
It is extremely important to pay careful attention to employee feedback. Management should always listen to team members and then apply the feedback towards making the necessary improvements before it is too late. When employees do give their notice, conduct a thorough exit interview and use this feedback to make further improvements to the manner in which your company conducts business. Always keep in mind that employee frustration is contagious. It will spread like a disease if not dealt with swiftly and decisively.
In conclusion, many companies fear change and view it as a negative prospect, while this could not be further from the truth. Successful businesses evolve over time and great business leaders must embrace change and put into practice when necessary.
Navera Group is ready at a moment’s notice and available when you need experienced financial and operational advisory. Our team of experts will work hand in hand with your leadership team to ensure the best overall outcome for your company. If you have any questions, or would like more general information about our array of services, please contact us today. Phone: 617-356-7516; Email: Info@Naveragroup.com; Website: www.NaveraGroup.com