Persistence and patience are important attributes entrepreneurs must have in order to keep the business going, even if the going gets tough. But how do you know when to throw in the towel? How do you know it is time to end the business?
When I was running a video store in the 80s, I knew it was time to close the business when I felt I needed to change the direction of my life. I love the business as movies are my passion and income was good. I did not just rely on walk in customers (Internet was just starting then and there was no online ordering as yet) but tapped several large offices in the city where the employees would order videos for the weekend and my girls would deliver them on Fridays and pick them up on Mondays. My inventory is almost wiped out during weekends.
But I decided to move and seek out greener pastures. Life was good, but I felt it could be better. I felt strongly that I am destined to seek a life somewhere else. So I sold off the business.
Aside from relocating to another place, how do you know that it’s time to move on and close your busines? From what other entrepreneurs tell me, here are some indicators that can let you know that time’s up for the business:
- You have achieved what you set out to do with the business
- The business ceased to be fun for you
- Your resources have been depleted and the business is not making any money
- Cash flow is insufficient and you have exhausted means to improve cash flow
- Your family is likely to suffer with the continued operation of the business (e.g. directing funds to the business instead of providing for family needs)
- Competition has gotten stronger and fighting them feels like banging your head on the wall
- Adverse impact of an economic downturn
When deciding to close your business, be sure to cancel the following:
- contracts with suppliers
- leases on premises or business equipment
- rental agreements
- business telephones
- utilities in your office
- business bank accounts
It is of course better to end a business on a high note – successful and all your objectives met. But sometimes, luck is simply not on your side and despite your best efforts, closing the business in the only viable solution. You’d hope that you won’t reach that point but sometimes things don’t happen the way you want it.
However the business will turn out, it is advisable to always have an exit strategy when starting a business so you know when it is time to move on. Be in control and think how you will leave the business you’ve worked hard day and night.