Most business owners make the mistake of assuming that their business is going to be a success. This is foolish, particularly when over 90 percent of new startups crash and burn in their first year. You would be right in thinking that this doesn’t leave much wiggle room for mistakes. You have to correct issues immediately, or they will bring down your entire business model. To do this, of course, you need to know the signs that your business in trouble, so let’s look at a few.
Strictly speaking, zero profits isn’t always a death toll for a company, but it does depend on the situation. Usually, if you start a business that is making no profits, you knew it was going to happen. You planned for it, and you’re willing to ride out that difficult period to generate loyal customers through low prices. This has led to a number of success stories including that of Diapers.com. They started off below breaking even and yet ultimately managed to sell their business to Amazon for millions.
That’s notably different from starting a business in the hope of making substantial profits and finding out you can’t even break even. So, if you’re gaining nothing in the first year and you didn’t plan for it, your business is definitely in trouble. We’ll talk about how to correct this situation a little further down.