Crisis: Signs of crisis and actions to be taken to overcome a business crisis


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3. Signs of crisis (crises / alarm signals)

The following typical mistakes in business development and management could lead to a crisis:

- Dependence on one or few customers
- wrong strategy
- Optimism and engagement as a substitute of Controlling
- Marketing is used on a random principle
- at new foundations the capital requirements are underestimated for the start phase and founders of new businesses mostly want a first class-commercial equipment from the beginning.

Difficulties are almost predictable. The following list could serve as a checklist with warning signals.

Markets

Information about the development and size of your markets are coming mostly from accidental customers and/or sales team conversations, the basic conditions of your market are only known incompletely to you and you know your competitors only in coarse trains. The development of the markets of your most important customers are not known to you.

Strategy / Controlling

- No formulated strategy available
- For plannings measurable figures are not defined
- operational strengths and weaknesses are not known
- it is possible only under considerable expenditure to ascertain with which product groups and customer groups you achieve which sales volume and yields

During the last 3 years no successful market launch of a new product was done. Regular conversations with important customers concerning their contentment, requirements and future developments, do not take place. You could meet no clear statements to advantages of your enterprise opposite to your competition.

Financial Statement

- Sales development stagnates or is falling
- you sell less to regular customer or lose them completely
- you do not know with how much customers you generate which sales volume
- Dependence on tallness customer is not known to you, or is not determined
- big and small customers are examined with the same intensity, undependent of yield
- to provide offers is very luxurious. The success rate is falling
- you can list your 10 most important customers with sales volume and yield only with very high expenditure
- your total expenses rises more than your sales growth
- Cost increases are above usual price increases
- Cost increases cannot be understood to the detail. Estimated values are used
- Price calculations are carried out on full costs basis. A regular control and if necessary change of the calculation sentences does not take place

- the accountancy is not used as a controlling and information source
- Price lower limits are not exactly known to you
- economical evaluations are constructed only irregularly and are analyzed, or the evaluations do not return the business situation correctly
- contributions are not known
- Profit development is negative
- in spite of positive operating result it is not known to you which sub-areas gain profit or loss

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