Closing up can be tougher than starting a business as owners has a tendency to keep supporting their business hoping it will turn around. It’s an emotional situation and it’s difficult to make a smart, objective decision. Despite the impact to an entrepreneur’s ego, small business owners should know when to give up the business and save themselves further heartbreak and money.
Below are five clear signs that it’s time to make the difficult decision to close your business.
The owner and/ or the employees spend more time waiting for customers than attending to them. The daily sales don’t meet the target.
The Marketing Strategy Isn’t Working
If the business is still not taking off after investing in a number of marketing strategies, something is not right or missing. Take time to reassess your customer experience and get help to fix the problems or close the business for good.
The Business Doesn’t Earn Enough to Pay Employees
The inability to pay staff once or twice a year is fine. But if it happens every month, it is time to take action. Assess if reducing overhead and increasing revenue would help or the business can’t be saved anymore. .
Low Employee Retention
The cost of frequent on-boarding of new employees can reduce business profits. It could be a sign of much larger issues. Assess if the problem can be fixed or it’s time for the business to close to cut losses.
The Business Is Almost Unknown To the Target Market
The business has been open for over a year but people in the target market are still unaware of its existence. The business only has a few repeat customers daily. The problem could be location-related or lack of marketing. Fix the problem soon or close the business.
Take Action Now
Almost every small business needs additional capital for growth. The money could come from investors, loans, or the current owners. However, if the business has been open for at least a year and the revenue can’t pay for the operating costs, it is definitely time to make a difficult decision to correct the problem within a period of time or close.
Struggling businesses should seek help. Visit America’s Small Business Development Centers’ website to find a nearby center that offers no-cost business counseling and other resources which may help the owners turnaround the business. There are also private business consultants for hire. Closing a business is admitting defeat but it saves the owner/ investor from further losses and allows them to pursue another career or other profitable ventures.