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Financial Reasons To Shut Up Shop For Good – And What Next?

What do you do when your business isn’t quite living up to the dream? Perhaps it’s become a burden and you regret ever having started it in the first place! Deciding when to shut up shop for the final time and move onto pastures new is not an easy decision to take, but it’s one which needs careful consideration and action, as delaying the inevitable can end up in financial ruin.

When you start a new business it becomes all consuming, both emotionally and financially. Your business becomes “your baby” and it affects all aspects of your daily life. You are filled with the strong belief that your business will be a success, you have total faith in it. You imagine your business as a major player within the marketplace and that the profits will come rolling in. Your belief is what drives a business forward, without a strong belief you wouldn’t have set up business in the first place. When everything goes wrong, it’s easy to take on the failure on a personal level, but this simply isn’t the case. There are many reasons why businesses end and the whole process will help you evolve as a person in order to take your new found skills towards another direction.

Take a break to assess the situation

Most of the major brands you see on the high street and many of the business entrepreneurs you have heard about will have been through the very same process, there will be a trail of so called “failed” businesses behind them. All the skills that were learned through the process of setting up the previous businesses will have been honed to perfection in order to get to the successful place they are now.

All businesses either grow, stagnate or fail. If you have put every effort in place to save your business without effect you should simply let it go. You may even be able to sell on the business as a going concern, if it hasn’t been left too long. Perhaps your heart simply isn’t in it anymore and your business requires an injection of new ideas from another owner. If you decide to close the doors for the last time or sell your business on, ensure you get excellent legal representation such as the services offered by Slack Davis Sanger.

Often knowing the signs that your business is no longer viable is the hard part. It’s hard to let go of your dream and vision. The following signs are all symptoms of a business which is no longer viable or profitable.

Changing marketplace

Consumer habits are very fickle and a product you have happily sold for the past ten years may suddenly lose its appeal. The bubble can burst at any moment. As a business entrepreneur it’s essential to stay current so that your products reflect consumer demand. If you cannot make adaptations to your current products or services it may be better to close shop, rebrand and open up in another form. Rebranding is often used by major players in the marketplace and it ensures the brand remains fresh and current. Closing the doors on your business in this instance shouldn’t be seen as a failure, you are simply evolving – a bit like a butterfly!

The quicker you take action the better, this will ensure you don’t end up in debt also you can channel any remaining profits into your next venture.

Lack of profit

During your business planning stage you will have projected a period of time as to when you should expect to make a profit. It is normal to make a loss or break even for the first few years of starting a new business, however this isn’t sustainable in the long term. You need to take stock of the situation and make decisions regarding your business’s future viability.

Lack of passion

To make a business work you need to be passionate about it. If you lack lustre and you are disinterested there won’t be the driving force enabling the business to succeed. If your business is starting to feel like a chore, admit that you no longer want to be involved. If you come to this decision early enough you may be able to salvage some financial benefit by selling the business. Don’t feel a failure, you are simply recognising what needs to be done and moving on. You can use your newfound business skills to open a business which you are really passionate about.

Ending on a positive

If your business has failed due to not being able to withstand the demands of the current marketplace, you’re not alone. Many major brands have recently closed their doors for the final time. This appears to be due to the change in consumer shopping habits, the main factor being that consumers can generally find that prices are much cheaper for products if they shop online. To take advantage of this small businesses have recognised the gap in the market for small independent shops, who offer something a little different. This could be a shop which uses locally sourced ingredients and materials, an ethically sourced clothing shop or cafes offering vegan and vegetarian cuisine. Rediscover your passion, identify the gaps in your marketplace and head towards success!

If you wish to test the market first, consider starting your business on a smaller scale. You could consider opening an online business without the overheads associated with having to rent a premises. You could also consider selling from smaller outlets such as on a market stall, pop up shop, fayres or you could persuade a shop owner to stock a small selection of your products, on a commission basis.

When you relaunch your business don’t forget the importance of branding. A strong brand is the key to success and will help your business stand shoulders above your competitors. If branding isn’t your area of expertise consider hiring a branding and marketing professional.  

Whichever direction you choose, see it as a positive step. Life is a learning process after all. Take it on the chin, brush yourself down, hold your head up high and move onto pastures new.