Small Business Alarms to Look Out For

Small Business Alarms to Look Out For
October 28, 2015 North Jersey Marketing

Ask Lourdes

Volume 2 Issue 11

Small Business Alarms to Look Out For

By Lourdes Cortez

Running a business can be a quite exciting challenge. Your business can be profitable, breaking even or losing money. This depends on how well you, as a small business owner, know and understand your market, the value of your products or services and the demand.

Being acutely aware of the state of your business is key to your bottom line. This is especially true when there are warning signs that show consistently negative numbers.

As a business owner, it is critical to your success that you’re aware of the signs that will alert you to what and where the problems are. These problems need to be looked at more closely.

For example, your accountant shows you statements that show declining sales for the last four quarters. You’ve barely met payroll, fixed costs and other expenses. This translates into declining profits.

Another warning sign is not being able to restock products or provide service on a timely basis. This points to needing to know and understand what your financial statements say.

Bottom line: you can’t afford to lose customers or operate at a loss for too long a period of time. The warning signs need to be further looked into to pinpoint exactly where the problems exist.

Don’t look for the quick fix either. Short-term solutions may fix a problem immediately but in the long run it could cause further problems.

First, take the time to properly examine your numbers. You’ve trusted your bookkeeper or accountant to take care of the books, but as a small business owner you must learn to completely analyze your finances. It’s critical to become extremely familiar with your financial statements.

Another warning sign could be that you’ve been met with a barrage of customer complaints. Ask your customers for feedback. Look at the complaints that seem to come up again and again – there’s most likely a problem plainly spelled out. If the quality of your product or service is declining, take a hard look at why. This information tells you that changes need to be made.

A good management team, including a financial manager can be crucial to sustaining and growing a profitable business. They can give you an objective view of your business’s finances. They can even help

you to develop checks and balances so that all the income and expense lines in your books are transparent to you.

If there isn’t positive cash flow, your business will soon be in trouble. Creditors not being paid on time may stop supplying you with products and services. Besides affecting your ability to carry on business, this can be a problem in obtaining credit further on down the line. Bottom line: pay your bills on time.

Other warning signs such as increased costs from suppliers, additional licenses and fees, higher insurance rates and maintenance costs are sometimes unavoidable. However, increasing your prices may offset those costs. Or it may be time to introduce a new product or service. Creating a unique promotion or incentive to attract more customers is also an option. You want your customers to see the value in what you’re selling and you don’t ever want to disappoint them.

Lastly, remember why you’re in business – it is to be of service to customers or clients. And, make sure you are watching your finances!


Lourdes Cortez began her professional banking career in 1984, at North Jersey Federal Credit Union (North Jersey Federal), as a representative and progressing through several positions before becoming CEO in 2005. In the past 10 years, North Jersey Federal’s assets have steadily grown from $171 million to $233 million, which is attributed to an emphasis on increasing commercial accounts that grew from 15% to 32% over the last 5 years. As the first Latina CEO of a major credit union in NJ, not only has Lourdes’ stewardship increased the assets of North Jersey Federal, but her commitment to serving a diverse community also contributed to its growth. North Jersey Federal is cited as the first financial institution in NJ to offer Islamic banking and Islamic banking products and one of the first of its kind to launch websites to be viewed in both English and Spanish.  She has also instituted a gay-friendly environment providing benefits to its employees and their partners long before equal rights campaigns became popular in NJ. As CEO, Lourdes crystallized the credit union’s community involvement with an initiative called “Operation Share & Care” that later became the North Jersey Federal Credit Union Foundation. Examples of the foundations work include building a student-run credit union in Paterson High School. Other organizations that have received support from the foundation include, Autism Radio, the Boys & Girls Club, Eva’s Village, the Marines Care Organization and the Boy and Girl Scouts. Lourdes has been honored by NJ Biz magazine, as one of the Best 50 Women in Business in NJ; North Jersey Regional Chamber of Commerce 2010 Star Award in Business; the 2010 Salute to the Policy Makers Award from Executive Women of NJ; and the 2012 Women of Achievement Award from the Girl Scouts of Northern NJ. Recently, Lourdes was appointed to serve on the Board of Trustees of William Paterson University in Wayne, NJ.