Business owners never want to see their business close because they often associate that with failure. Every business owner wants to succeed, especially in a competitive environment.
It’s a sad reality that not every business idea will take off. There’s a plethora of reasons things can go wrong: Debt, burnout, waning passion for the business or even competitors who are simply ahead of the game. It’s not always on you or what’s in your control, it’s also about circumstances that you can’t predict.
However, just because there are external factors, doesn’t mean you have no responsibility. Trust me, I’ve been down that road.
I hit rock bottom with my business because I refused to change my ways and adapt with the times. My custom cycling wear business took off very quickly and I was earning more than I thought I would–all before the age of 30. My arrogance got in the way and I was making poor decisions left and right until I was eyeballs-deep in debt.
I thought then that it was high time to leave my business, but I never thought of it as a failure, but rather as a springboard for new pursuits. After my business recovered, I sold it and moved on with my life.
Knowing when it’s time to close or exit your business is important so you no longer waste time, energy or money on something you can no longer bring back.
Business closure can come about by a number of things–here are five of the most common reasons why.
Debt is something I’m intimately familiar with. Because I was wading through so much of it as a result of my irresponsible spending habits, I heavily considered closing.
Debt is no walk in the park and can force the hand of many business owners because cash flow problems aren’t being solved and their numbers can’t cover everything–from salary to repayments.
Debt can definitely kill a business because business owners often don’t realise how big their debt is before it becomes irreversible. It grows exponentially until it feels like a hurdle you can’t get over.
Losing or owing a lot of money makes it difficult to continue operating your business because you can no longer allocate enough money to every part of your business, halting operations and making it harder to stay afloat.
While debt is not impossible to overcome–I was able to–it can be very difficult to find that drive to change up your approach and climb back up to where you were before debt and even beyond.
Every business owner should adjust their goals as they go along and revisit their business plans. It’s normal to tweak your numbers and what you want to achieve every now and then as your goals should be informed by your present performance.
A red flag, however, is when you’re not meeting any of your goals despite any amount of adjustment.
Failing to attain even a few of your goals every month or every year should raise alarms. If you’re not even reaching anything close to your projected numbers despite lowering your standards, closure could become a reality because your business may not thrive no matter how many adjustments you make.
As you grow your business, you always need to revisit your goals and ensure that they’re aligned with your vision but still make sense with your business’ current situation.
If your business is starting to negatively impact your personal life and health to the point of burnout and stress, you might want to seriously consider closing, selling or exiting your business. Stress can cause a lot of adverse effects like a weakened immune system, exacerbated mental health and even physical pains and heart problems. Your health is the most important thing, and nothing is worth putting yourself through that suffering.
Personal relationships may also suffer. Personally, my obsession with my business and my eventual descent into debt cost me my marriage. My wife asked for a divorce because I no longer made time for her and our marriage eventually suffered because of it.
Make sure you achieve a good work-life balance in order to keep pushing. Health really is wealth, so taking care of yourself is the most crucial thing of all.
You can start to feel hopeless when you keep trying every tactic and campaign and still don’t experience success or growth. Exhausting every shiny new technique or even popular new ways to market and advertise your business without any returns on your investment can feel disheartening.
Try as you may, there may not be a future for your product or service, so save yourself the time and energy by cutting it out. It may be a hopeless endeavour and it may be time to shut down your business in order to save yourself the heartache.
You need to be okay with making mistakes in your business. Remember, like we mentioned earlier, a business closure is not the end of the world, it can be a new opportunity and a learning experience.
Passion is a very important part of running your business as it’s what gets you up in the morning and makes you excited to head to the office and do your best. If you feel that passion waning and you’re no longer enlivened by your business, it might be a sign for you to part ways.
You can always employ some actionable steps or exercises to attempt reigniting your enthusiasm–like reordering your goals or reminding yourself of why you started the business in the first place–but if nothing works in the end, it could be time to let go.
Your passion for your business is your driving force so keeping that kindled is incredibly important so you don’t lose sight of success.
Plenty of business owners equate ending a business with failure and that is absolutely not true. Like any relationship, it could just be that you’re not right for each other and you need to move forward and find a new venture that’s up your alley.
There are some advantages to closing a business, such as limiting damage and avoiding too much debt. When you exit the business before everything spirals too far out of control, you can make sure that you can still cover what you owe and still pay your staff fairly for their hard work. Investors in your business may also appreciate you pulling the plug early, as they don’t want to keep putting their money and effort into a dying business.
Closing your business doesn’t mean you’ve failed, it means you’ve grown enough to be cognisant of the fact that your venture isn’t working and that it’s time to seek out a new one. It can be a springboard to something better for you.
Closing, selling or exiting your business is not something to be ashamed of. You’re merely identifying a snag in your career and recognising that there are better things out there for you and your potential audience. If you ultimately decide to close your business, keep your chin up–you never know if your next idea will be the one to help you break into the scene and outdo your competitors.
If you’re interested in figuring out what the best decision is for your business, feel free to book a coaching session with me or give us a call. We at E2G are happy to help.
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