11 Warning Signs Your Window Cleaning Company May Be Failing - And What To Do About It - Part 1 of 2
Hello again. This is Jim DuBois from WindowWashingWealth.com. There’s always something to talk about when it comes to marketing but also when it comes to protecting your window cleaning company. If you’ve ever been on the brink of failure or had a lack of funds to sustain operations comfortably, it’s no fun. I know, I’ve been there. There are things you can instill into your operation today to help prevent the inevitable from happening.
There’s often a very thin line between a company that is failing and one that is simply experiencing a temporary cash-flow shortage or a seasonal decline in sales. We’ve all been there – large company or small company. Sometimes it’s lack of revenue or simply financial mis-management. Either way it needs to be addressed.
According to the Small Business Administration, about half of all newly established businesses last 5 years or more. Only one third makes it to the 10 year mark. Window Cleaning companies that possess the stamina and skill to endure the early years of growth sometimes flounder as the business matures. Why? In all too many cases, window cleaning business owners disregard warning signs.
Businesses in general do not fail overnight. Instead, in many cases, there is a gradual and almost imperceptible decline that business owners miss, particularly when they’re unaware what some of the symptoms of a failing business might be.
In this Business Builder article, we will identify some of the common signs to determine if your business could be failing or on the brink of failing. If you recognize one or two of these signs in your own window cleaning business, then you could be experiencing a temporary glitch or something more serious that’s only just emerging. Better to know now so you can act. However, if you recognize more than a couple of the warning signs, then I want you to email me at firstname.lastname@example.org. If struggling, let’s turn your window cleaning business around, and keep it alive.
So, what are the obvious symptoms of a failing business?
Late payments from customers are one of the primary reasons businesses are unable to pay their bills on time. If you offer unnecessary long payment terms or do not have an established collection procedure in place, you could experience a cash shortfall that impacts your business’s ability to operate effectively. Fortunately, our residential division has very little past due receivables. With that, we do get customers that do not pay in a timely fashion. Our system is real simple. When the job is done, we expect payment. If payment is not made in a reasonable time frame (a few days) we professionally but relentlessly call, text, and email until we get paid. If we are still not paid, we send our Residential Supervisor to the home.
Our commercial division can be another story however. Our company services almost 4,000 storefronts and yes, we have many customers who do not pay on time. Just like residential, we start calling and emailing, then the commercial supervisor goes to the store. No matter residential or commercial, if payment is not made, we threaten small claims court. We, like you, need to get paid! Most pay after the small claims court threat. If not, we see them in court and provided you have a paper trail of emails and signed work orders, you will win like we do… most every time.
Every business has payments that must be made, whether it’s to landlords, employees, utility companies, suppliers, or financing providers like the banks. Although it is not unusual to struggle to make the occasional payment, particularly for smaller businesses, if you are regularly receiving payment requests from creditors in the form of threatening letters, phone calls, and emails then it could be symptomatic of a serious cash-flow problem. Ignoring this type of contact from a creditor can lead to more serious action being taken, which could be the beginning of the end for your window cleaning business if you can’t afford to pay.
Perhaps you have a cash flow setback. It’s great that your profit-and-loss statement may show an upward trend in net income. But that’s not the whole story. For example, you might have customers who aren’t paying their invoices in a timely fashion, causing you to struggle to cover payroll and accounts payable. As the old saying goes, “Cash is king.” Uncollected accounts receivable won’t pay the bills.
If sales and revenue are the lifeblood of a window cleaning business, it is because of cash flow. After sales, the next financial indicator of a healthy business is how well you manage your cash flow. Oftentimes a Profit & Loss statement may show that a company is profitable, yet the company is struggling to survive. Why? The answer lies in cash flow.
Successful small window cleaning businesses become successful large window cleaning businesses when they understand that cash is king and actually focus their business on generating, and preserving cash.
What is Cash Flow?
Cash flow refers to the inflow and outflow of cash within a business. That is; the flow of money – where is it coming in from: account receivables and where is it going out to: account payables?
Managing your cash flow properly is ensuring you never run out of the financial resources necessary to sustain your business. A business that runs out of cash is a dead business!