Starting a business is a big decision and the initial few years put a lot of pressure on the owner, both mentally and financially. You know what’s even more difficult than starting your own business? The decision to close your business. Shutting the doors and walk away from something you have poured your heart and soul into is an emotionally taxing exercise.
Knowing when to throw in the towel will save you further heartache and lots of money. Here are Five signs that point to trouble ahead. I’m not saying that you should close your business today if you have any or all of these problems but they should be triggers to get you thinking about the future of your business (or lack there of).
You are not hitting your sales/revenue targets.
After a couple of years in business its time to take a serious look at your business’ finances. Losses in year one are not unusual as you invest a lot of money in the start up phase. However, If you are still not turning a profit at the end of year two or three and you’ve run out of money don’t go running to the bank. A business loan will just put your further in debt.
It may be time to seriously consider cutting your losses before the business consumes all your personal wealth and puts you into financial crisis. Continuing to trade could be bad for business as well as devastating for your family. Sometimes it can be better to recoup, take the lessons you have learned from the business and start again rather than pouring good money after bad.
Your Personal Health Has Gone South
If you find your health slipping — whether through weight gain, weight loss, constant fatigue or anxiety, then you should evaluate whether your business is actually worth it. The business is not your life. The business should be the income source that pays for your life. If it’s slowly consuming you (literally) then either something has to change or its time to walk away.
Your Mission Loses Its Luster
Starting to forget why you bothered to started the business in the first place? This could mean one of two things, both of which usually lead to the same outcome. First, it could be that your mission was never really clear to begin with. If you have never really taken the time to work out your objectives its likely you are spinning your wheels and feeling like the business is going no where despite all the money you are spending. Alternatively, it could mean that you’ve lost your passion for achieving your objectives and working with your customers. Without your personal drive to succeed there is very little else to propel your business forward. Either way, you will need to close your business down if you can’t find it in yourself to set some clear objectives and to really care about achieving them.
You Love Your Product More Than Your Customers Do
Is your business providing a product or solution that customers are actually looking for? Or has the market shifted and you are now a business focused on something you care about but no one else is really interested? If it’s the latter you may have a problem. You need to listen to your customers. If they’re not buying what you are selling then trying to force feed it to them is going to get you nowhere. If you’ve reviewed your pitch and you are confident the problem is not ‘how’ you sell it then your customers just don’t want to buy. Its time to shift focus or shut it down.
Your business doesn’t have a “Pause Button”
Hitting pause on a business in hard times so that you can resume it later is an extremely helpful option to have. Rather than completely closing your business down if the market conditions are not favourable you could strip it down to its bare bones and wait for your market to rebound, before coming back stronger than ever. If you are on the verge of collapse and you can’t hit the pause button then you may need to close your business.