Enough! Know when to Pull the Plug and Shut Your Business Down. It is Your Business, Not Your Child

I talk to many small business owners who have not taken a check in quite a while. They're living off credit cards (that will end), savings (that, too, will end) and spousal support (that goes over big) for reasons that defy logic and are really based on emotional, wishful thinking. I ask them, if we strip the debt away, freeing the business to run without debt, can they turn a profit, take a check and retain some earnings? Many say "No, but let's do it. It will bring me closer to breaking even. I can make it from there." WRONG.

Please consider--as the song goes--we need to know when to cut, know when to draw and know when to fold.

If a business cannot operate successfully--retaining profitability and some earnings after paying the owners a paycheck--then it's time to sell or shut the business down. It is not worth operating. You are wasting your time, your capital, and your opportunity. For these businesses, we need to do an adjusted version of our strategy and simply reduce the personal guaranty so one can emerge ready for a new life.

Many, many small business owners hold on to their businesses without taking a check, without retained earnings, without a chance for growth and development, without an opportunity to turn it all around. And yet, as if it is their only child, they hold on to it, going down with the ship and a bunch of bad excuses, mainly because they are simply unwilling to accept reality: not every business can succeed or should succeed.

When the business has demonstrated that it is a failure, the smart business owner liquidates it and works out the personal guaranteed debt then moves on to the next business plan, smarter, and with resources remaining.

Far too many small business owners are too emotionally attached--refusing to admit defeat, unwilling to let go of the dream, unprepared to close the doors and start again--so they go down with the ship, pulling everyone associated with them down as well. Too many small business owners believe giving up is not an option, when in reality, it is not about giving up, it is about making a prudent, responsible decision that will springboard you to higher ground, a better view and a new opportunity to start over and be more successful.

This decision is not a failure. It is an organized retreat to save resources and create a better plan, one that will work, win and succeed. Yet, you tenaciously hold onto a dream that is turning into a nightmare? You must be strong enough to read the numbers, understand what they are telling you and if the message is that this business equation will not work, then holding on for one more minute is a mistake and a waste. Planning an exit strategy is the only responsible way to go.

This downturned economy has toppled thousands of previously great business models. Be smart and recognize your reality. If it can be fixed with a debt removal strategy--a workout--call us. We can engineer this. If it will not survive even with debt elimination, then kill it, its days are over. Exit with a liquidation plan and a personal guaranty workout.

Call us for a no-obligation teleconference to review your situation and make recommendations. Norm will arrange it: 413.584.2581