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In business, they often say that persistence and perseverance is the key to success. They also say that as long as you keep holding on, keep working harder and never give up, what you aspire for will soon be yours. Unfortunately, the reality isn’t at all that lenient, and some (if not most) of the time, even your best efforts can be all for naught. And that’s why, even if it’s a hard decision to make, you may have no choice but to close down the business that you worked so hard to establish - for a successful business owner's career. It can be the only way to keep your finances and sanity intact.
In itself, folding up a business isn’t necessarily a bad thing. There are plenty of good reasons to do so, ranging from the financial to the personal. That said, there are smart ways to go about it. Too many small business owners, instead of closing up shop on their terms, tend to wait until it’s too late, stubbornly clinging to the hope that things are going to turn around any time soon.
Don’t wait too long to see the writing on the wall. Here are signs that you should shut down your business sooner rather than later. Below we have prepared several signs and characteristics of a small business which can indicate to close it or not.
Your business is your baby, and you have an emotional attachment to it. The tie that binds you to your business can blind you as an entrepreneur, and you would rather lose money than let your baby go. Once this happens, it’s game over. You need to know your numbers and keep track of how long your business can go on with your rate of loss. Losing SOME money is fine but losing it all is not. Don’t wait until you have nothing left to start again.
Growing debt can undoubtedly add to the strain felt by small business owners. If you can’t keep your business on track and debt is spiraling out of control, you’re faced with three possible solutions to your predicament: sell your remaining assets, cut costs to free up cash, or file for bankruptcy. Although bankruptcy is a legitimate way to save your business, know that it comes at a steep price—it can affect your personal credit score, as well as negatively impact your business in the long-term.
Profit is what makes a business. Sure, you may have customers lined up, but if your enterprise is not earning you money, then what’s the point? How can you expect to stay in the business of you continually make no profits? The answer is that you can’t—not if you want your enterprise to last. You spend money on inventory, overhead, and general business expenses, and without profit, you won’t have the finances to generate income, grow your business, or repay loans. Are you spending too much? Not enough cash flow? You need to evaluate why you’re not earning and restructure your efforts as needed. Otherwise, rather than endure zero and potentially negative profits, you might want to consider closing your company.
Small businesses face an uphill battle when competing with large and established companies. When a rival small business comes along, large companies have the capacity to lower their prices and wait it out until they have the competition completely beat. Small business owners unable to contend with larger competitors can experience significant drops in market share, which can compel them to give up.
As the owner of a small business, it’s likely that you’re responsible for everything, from production to payroll, to human resources and even meeting with clients. When you take on too many roles, it can be a lot to handle and maintain. That’s when you’re work-life scale becomes unbalanced, and you have to choose to give up one thing over the other. You may have started your small business thinking it will give you more time for yourself, but when that doesn’t happen, disillusionment could set in, and that’s a telltale sign that your business is not right for you.
It’s possible to get overly attached to your business. However, the opposite is also true. If you start to dread your working hours, that’s a sure sign it’s time to move on. Assess your stress levels and admit to yourself if you need to take some time off from running your business. Perhaps a little vacation can clear your mind, re-ignite your passion and give you a fresh perspective on how you can run your business more effectively. If that doesn’t work, you need to think about selling or closing your business.
Business is supposed to make you a better person—not turn you into someone you don’t even recognize. You want to do whatever it takes to save your business, and in the process, you could lose sight of who you aspire to be, even start abandoning your core beliefs and values. Depending on how far you’ve drifted, sometimes you become a stranger to yourself. That’s when you know you need to let go of your business and go back to being YOU again.
You poured your blood, sweat, and tears to get your business up and running, so naturally saying goodbye to it will be confusing and conflicting. Step back from your business and look at it with objectivity. Use your experience, knowledge, and intuition to inform your decision. Based on your situation, what do you think is the best course of action?
There are many ways to move forward and away from a failed business venture. Your options include starting another business—one that is within your means to manage—or re-entering the workforce. Granted, the latter can be a humbling experience. If you need a way to explain your decision to close your business to a potential boss, our expert writers at Resumeble can help you craft an effective cover letter that can do just that. Get in touch with us today to discuss our resume packages.