7 Startup Warning Signs You Can't Afford to Ignore


Every company has the potential to fail, but these warning signs can help you avert disaster before it's too late.

Entrepreneurs take huge risks to bring their ideas to life. Unfortunately, most startup companies fail within the first few years of operation -- and even good businesses built on great ideas can suffer that ultimate end.

It's impossible to predict what companies will succeed and which ones will fail at the outset; a business plan might reveal some key weaknesses, but only a practical environment will expose the critical factors responsible for a business's ultimate failure.

That being said, there are some key warning signs that a business is drifting toward failure:

1. You're not seeing any momentum. Most businesses have steps forward and steps back, but strong businesses see a general trend of upward momentum. If you aren't seeing it, it could be a bad sign.

2. You're losing customers. Have you lost multiple customers lately? Does it seem to be a pattern. It could be an indication of things to come.

3. You don't know what to do next. Companies need focused direction to survive. If you don't know what to do next, it's a major problem.

4. You haven't improved or changed your core product. To keep your customers happy and keep your brand relevant, you need to change, adapt, and tweak your core product on a near-constant basis.

5. Your cash flow is tenuous. Cash flow can make or break businesses. If you have trouble paying your bills, you're flirting with disaster.

6. Your competitors are closing in. Look at your competitors. Are they doing better than you? Are you not differentiated from them? Under the right conditions, your competition could easily shut you out.

7. Morale is down. Look at your employees. Have they lost faith in your company? It's a telling symptom that your company is leaning toward collapse.

Keep watch for these warning signs in your own business, and if you notice them, take action before it's too late. Startups are flexible, so it's always possible to change your business model or your approach to something more sustainable.

Jose Vasquez is a serial entrepreneur and tech enthusiast dedicated to helping startup technology companies get the direction and momentum they need to succeed. As the founder of Build. Brand. Blast., Jose has established a collective resource for tech entrepreneurs to consult when brainstorming, creating, launching, or expanding a new business. Jose is also the founder and CEO of Quez Media Marketing, a marketing firm that combines technology and creativity to help new and growing companies get the results they need.