Few owners, when starting their businesses, give much thought to ending them. When you’ve committed everything you’ve got to launching and growing your business, closing it is the last thing on your mind.
But time brings change, and after some years, you may find yourself thinking about making the difficult decision to call it a day. The Houston Chronicle’s smallbusiness.chron.com reports that there are a variety of reasons for closing a business. Accounting information, profitability and long-term viability often play a major role in the decision—but not always. You could be faced with
- Deteriorating economic conditions
- Low or declining profits
- Unavailable resources
- Tough or increasing competition
To Chron’s list, we’d add a few more reasons:
- Your partner’s cashing out.
- You’ve lost interest.
- You want to do something else.
- You want to start another, different business.
But regardless of your reason(s), how do you know when it’s time to move on? Business coach Kelly Azevedo and Yahoo Small Business contributor says that while business owners often “know” instinctively when it’s time to hire or find a new vendor, all too often they hang on too long before moving on. Waiting too long to close a business is a big area where this happens—understandably so. Why are we so reluctant to let go? Possible reasons:
- Not wanting to hurt anyone
- Hoping things will turn around
- Not wanting to be exposed to judgment or criticism
- Not knowing what’s next (our addition)
But change is inevitable, Azevedo says. Times change, people change, your industry and even the business itself changes. Letting go is never easy, especially for business owners. But there’s one central reason for ultimately letting go: You can’t move forward—in any way—until you do.
If you think the time might be right to close your business, how do you know for certain? Entrepreneurial expert and USA Today contributor Rhonda Adams recommends asking yourself several questions to resolve the struggle between giving it more time and calling it quits.
- Are you committed to the business or afraid of change?
Instead of resisting, maybe it’s time to be proactive and take control. - How have “things” been trending lately?
Are you energized—or feeling stagnant and even defeated? - Are you learning and growing?
Money might not be the only reason to be in business. - What’s the opportunity cost?
Could you be doing something else (better) with your time, energy and funds? - How is this affecting you and your relationships?
If your stress and unhappiness is spilling over into other areas/people in your life, it may be time to cut bait. - What’s the honest prognosis?
Is there really a good chance of turning things around or is it a long shot?
Once you’ve decided to close your business, there are resources out there to help. Hopefully, you’ve been meeting with your attorney, accountant and other business advisors all along—or plan to soon. And in the meantime, the IRS offers a checklist for closing a business. Click here to access it.
Last thoughts: You’re bound to feel a lot of different emotions when you close a business, from sadness to a sense of loss and even anger. After all, you put your heart and soul into it. But that’s just the point, experts say. While it’s normal to feel down and defeated, there are still plenty of reasons to feel proud and hopeful—precisely because you gave it your heart and soul. You took the risk, you tried and in the end, decided to let it go and move on. Think of the experience you have now—and everything you learned from owning a business—that you’ll take with you to your next adventure!
Image courtesy of artuf84 / FreeDigitalPhotos.net
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