Businesses rarely grow in a linear, methodical fashion, and problems rarely appear as obvious downward spirals. There are always ups and downs, ebbs and flows in business. However, if you're seeing any of the following five business warning signs, it's time to investigate to avoid a major problem:

1. It's Harder to Pay Your Bills on Time

If you find yourself putting invoices aside until you have the cash available, or apologizing to suppliers because you're increasingly paying your bills late, you're having cash flow issues. Every business has times when it struggles to maintain a positive cash flow, so that in itself is not a business warning sign.

If you're having more and more difficulty every month making payments, it's time to take a closer look at your revenue and expenses. Are you not selling enough, or are your expenses rising? Once you know the cause of your cash shortfall, you can take action to correct it.

2. Employees Are Leaving Left and Right

Every business has turnover. That's a given. However, if your turnover rate has suddenly shot up or you're having trouble finding workers, you may have a problem. Does your compensation match the market? Have you made personnel changes that are causing conflict? Is morale low? Answering "yes" to any of these questions is cause for concern that you'll want to address.

3. Your Competitors Are Closing Up Shop

While your competition should never drive your business strategy, if others in your market are having trouble keeping their doors open, you'll want to take a closer look at your own operations to be sure you're not missing any business warning signs. You may want to investigate the kinds of challenges your competitors encountered that caused them to fail, so that you can avoid them.

4. Profitability Is Declining Even as Sales Are Rising

When sales are good, it's easy to miss financial business warning signs. You see money coming in, so you assume business is profitable. That's not always the case. If your expenses are outpacing sales, or if product costs have risen substantially, profitability will suffer. And since you need profits to stay in business, you'll want to figure out what's going on.

5. Clients Are Taking Longer to Pay

If you see your accounts receivable numbers rising, that could be a good thing. It could mean that sales are increasing. If sales have remained steady and accounts receivables are increasing, however, that could lead to a cash flow crunch. To pay your bills, you need your clients to pay theirs. If they're not able, you'll need to find a way to make up that gap.

There are solutions and strategies for dealing with all of these business warning signs. But you first have to be aware of them, so you can deal with them before your business is in serious trouble.

Tags: business trouble business warning signs accounts receivable profitability Employee Turnover cash flow