Many entrepreneurs will face the fact that their business is no longer viable. They have become less profitable – or unprofitable. Revenue is declining. The market is just not there for whatever reason. Too often owners will hang on hoping for a miracle that never comes and, in the process, destroy their own financial futures.
Your business is just that – a business. It is not you, your family or your child regardless of how much of your time, effort and money has gone into it. The primary issue is you, your stakeholders, and your future financial health. The business is incidental. Too many times I have seen dying businesses propped up for years at the huge personal cost: mortgaged (and foreclosed) homes, education forfeited, retirement with no financial cushion – the list is long.
Much of the problem stems from inertia:
“We’ve been in business for 10/35/106 years.”
Times change, markets change. The issue is you and your family, not the history of the business. Take some photos and close the doors.
“I’m 55/62/70, how will I find a job?”
Even a meager income from a low level job is preferable to churning all your income back into the business.
“We have a new machine/marketing plan/sales person.”
There will always be something on the horizon which is sure to elevate the business to profitability. If you have been in decline for an extended period of time and have infused money into the business to keep it afloat, one change is unlikely to return you to the halcyon days of positive cash flow.
“It’s a family business.”
See above. The fact that your great grandfather started the hardware store does not in any way obviate the fact that you cannot compete with the Home Depot down the road.
Take a very pragmatic approach or have an outside accountant or business advisor do so if you are not able to. If the business is failing get out before it destroys your financial future.