(This is a contributed post)
When you start your own business you expect everything to work out just fine. You expect profits to rise and you hope that your business will eventually become a major player in your market sector. If we didn’t have such aspirations for a new business, we would never start it in the first place! Starting your own business can be an emotional rollercoaster and it becomes all-consuming. It affects all aspects of your daily life as you invest time and money to get it up and running. You have a strong belief in your business’s future success and you are prepared to do anything it takes to achieve it.
Unfortunately starting a business doesn’t always live up to expectations. Maybe profits are not enough to keep the business viable, or you simply don’t feel passionate about your business anymore. If profits (or lack of them) are the main issue, It may be possible to research dormant company formation – read more here, or maybe it’s time to end the business and “close shop”.
Recognising when a business should close is a valuable skill. If you continue to try and run your business regardless of problems occurring, you could lose money or end up in debt. You would be best either selling your business or ending it.
Many famously successful entrepreneurs will have been through the exact same process prior to finding a business model that works. Setting up your own business, which eventually closes shouldn’t be seen as a waste of time or failure. The number of skills you will have gained during the process will stand you in good stead for future ventures.
Here are some signs that your business may no longer be viable.
The marketplace is forever evolving and is fast-paced. Sometimes a product or service which was once popular becomes defunct. If you can’t make adaptations to keep up with current trends, you won’t be able to meet profit projections. As a business owner, it’s important to keep “your finger on the pulse” so to speak, so that you can predict the next big thing. It is essential to communicate with your target market to adapt to their requirements. If you can’t meet expectations it would be best to absolve the business in its current form.
When first setting up a new business you develop a business plan which makes profit projections. At the start of a new business, it’s reasonable to make losses or break even. However there must be a point when profits begin to rise, otherwise the business will unsustainable. Carefully monitor timescales and don’t bury your head in the sand thinking that everything will be ok as you are likely to lose money in the long run.
Running a successful business requires a lot of hard work, dedication and vision. If you no longer have the passion or vision for your business to succeed it may be time to close shop and move onto pastures new. If your business is making a profit, sell it on to receive financial gain. You could use the profit to start a new business that you are interested in.
Whatever your decision, don’t see closing a business as a failure. At least you tried – many don’t and you will have learnt many valuable new skills.