Have you been making a series of losses in your business? Has it reached the point where you are seriously contemplating closing the business down? Would you like to know how certain you should be before closing down a business? If your answers to these questions are yes, then this article is for you.

You need to be very certain before you make this decision. Don’t be too hasty to close the business. You don’t know if small business loans can boost your ailing business. If finances are the problem, you can use small business loans to improve the business and get it unstuck.

On the other hand, you don’t want to waste too much money on a business that cannot be revived. Therefore, you need to make the strategic decision to close the business at the right time. Closing a business at the right time will save you a lot of money and unnecessary stress. This article will let you know the possible reasons to close down your business, along with other things that you should do before and after closing your business.

Viable reasons for closing a business

The following are some common reasons why entrepreneurs close their businesses.

1. Inability to attain milestones

Another key reason why businesses shut down is when they cannot achieve specified growth milestones and metrics. At that point, the owner may feel that there is no point in keeping the business going. But you need to be sure that you aren’t too hard on yourself and your business by setting unattainable milestones.

2. Lack of customers

Customers are the lifeline of a business, and if your business doesn’t have enough customers or is losing them too fast, you might have no choice but to close the business. Find out why you aren’t getting enough customers and do all you can to fix this. But if you can’t win enough customers to sustain the business, it might be time to count your losses.

3. Bad economic situation

A lot of businesses get closed during a recession and other periods of economic downturn. So, suppose there is a recession or change of government with bad policies in a location, and you don’t see things changing anytime soon. In that case, it might be prudent for you to close your business down. You can then reopen it after the bad economy, or political climate is over.

4. Expert analysis, financial data, and models show that you should close the business.

Statistics, trend charts, expert analysis can show the future of a business and let you know if you should close the business or not. The statistics don’t lie, and they don’t show any bias, unlike humans. So, pay close attention to your business finance and monitor everything carefully. Watch what the figures say and listen to the experts.

5. Terrible and worsening business debt

Many businesses have had to source for external funding to stay afloat, expand, buy equipment, meet urgent cash needs, and use cases. But it could get to a time when business debts pile up and become unsustainable. In such cases, the business often files for bankruptcy, assets are liquidated, and the business owners look for a way to pay up creditors after selling business assets.

If you are running a business that is an eternal sinkhole consuming business funds day after day with no sign of improvement, selling the business might be better for you. The thing is, the more funds you sink into the non-performing business, the more you lose, and in the end, you might find yourself with more debts and nothing to show for it.

6. Improve your failing business first to avoid closing it prematurely.

As a businessperson, you shouldn’t run at the first sign of trouble. Many successful multinational corporations you see today had issues that the founders withstood on their way to becoming billion-dollar companies. You need to try some things to get your business out of danger before pulling the plug. Here are a few things that you should do to improve a failing business

7. Seek business funding

Small business loans and other funding sources might be the trick to getting your business unstuck. If you lack money to expand and carry out worthwhile business initiatives, seek business funding.

Continue reading Closing Down A Business? When Is The Best Decision?