In business, running into problems is inevitable. At ServoPro, we spend countless hours talking to petrol station owners about their businesses. These are the common signs that financial trouble is on the horizon:
Your business is growing uncontrollably
Of course, growth is a good thing – but it should be controlled to keep your business from hitting a wall. When a business is growing too fast, it’s difficult to manage cash flow, and logistics and make quick decisions, and everything costs more.
An acquisition doesn’t go according to plan
Acquiring another service station takes time and money, and the challenge is underestimated in many cases.
A change in operational tools
While changing and upgrading operational tools like a POS system can be extremely helpful, the initial stages of implementing them can bring setbacks. Tools like these can cost a pretty penny, and if something goes wrong with implementation, it can be costly and time-consuming
You’re in a lot of debt
Some business owners having more debt than others is a fact of life and business, but if your business has a high level of debt, it will have less flexibility and be more vulnerable. Also, if your petrol station is in a large debt, you are paying more interest and fees.
There was a poorly-planned business succession
Many customers value family-owned petrol stations, but there can be bumps in the road when the business gets passed down from one generation to the next. Family members may have different ideas, or they may not want to take over the business at all.
You notice organisational problems
When personal problems interfere with your business and cause organisational issues, trouble is on the horizon. If you have a high management turnover rate or multiple employees leaving at once, that’s never a good sign.
You have issues managing your finances
If you manage your petrol station’s finances poorly, there’s no doubt that you’re headed towards serious issues. You should be producing monthly financial statements and/or forecasts, so if you see a shift in profitability, you can adapt quickly.
There are problems with the external environment
While the external environment is out of your control, it’s still important to keep an eye on things like a highly regulated industry, strengthening competition, and negative media coverage.
Too much optimism
Some optimism is good, but having too much can paint a rose-tinted hue over your plans for the future. Keep a realistic outlook, and you’ll fare much better.
Stay Vigilant
A key part of staying on top of your petrol station’s finances is looking towards the future and always have a plan in place. To learn more about how to be smart about your small business’s finances, contact us.