What stage of failure is your business at? And why?

During business failure, most owners engage in wishful thinking and denial of the bad shape their company is in. They try to justify the poor business performance and are reluctant to call on a consultant.

The 5 Stages of Business Failure
1	No management controls, lost sales momentum:	By promptly biting the bullet and introducing controls, you may be able to cross back across that fine line between under-performance and good business health.
2	Not meeting sales projections	A turnaround fix is required. Business is not likely to improve without outside assistance.
3	Further decline, drastic expense cuts.
4	Inventory shrinks, suppliers threaten collections, etc..	The ability to deliver and restructure loans become more difficult, making success much harder to achieve. You must obtain outside business and legal advice.
5	Legal actions are imminent.

Imagine you're the captain of a sinking ship, with land on the horizon. You need to know if you can make landfall before the ship sinks, or if you should prepare to abandon ship. Wait too long, and you'll go down with your ship.

How can you truly gauge your situation?

Are you at the point where minor adjustments (such as expense reduction) can make the difference? Or does your company need a full-scale turnaround?

The gap between a healthy or under-performing company is very narrow.

By the way, don't fall into the trap of assuming that the situation is less dire because you business is more mature. Or that it will be embarrassing if you're not able to dig yourself out of this hole by yourself. People — bankers, customers, emplyees — will care about only one thing: Will your business survive.

The key point is that you must begin actively addressing your problems as soon as they appear. Don't let them grow and become toxic. Many failed businesses could have been saved and avoided foreclosure or liquidation, if they would have acted sooner.

Being proactive and aggressively seeking to resolve issues now, will pay big dividends in the very near future.

Now, let's draw up your Blueprint for Success.

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