|I did all I could do!|
Entrepreneurs are a highly dedicated group focused on newly created businesses. Running a business is a strong part of an entrepreneur’s life and they develop a never give up attitude. The problem is that there are times when it is necessary to pull-the-plug and close the business down. Trying to run a business that is on life support is a highly emotional time and decisions become increasingly difficult. Deciding when to terminate all activities and close down is a difficult decision to make.
There is often a fine line between success and failure. Many factors beyond the entrepreneur’s control contribute to the ups and downs of a business. For example, a contract manufacturer producing materials may reside in a country undergoing significant change. The result may impact price of materials or lead to a degrading product line. Not realizing or rapidly adjusting for a product production that is off in quality or quantity results in clients receiving product that fails to meet specifications or generating delivery backlogs. Failure to deliver quality goods on time makes for unhappy clients and they may seek a replacement for your products. A sales reduction is one of the symptoms, but if the problems are not corrected quickly, the company customers leave may never return.
It is hard to come to a realization that the large sales of yesterday no longer reflect the sales potential of today. The owner sees the business as having a great value based on past sales, but it may be the current status has placed the company in a position of greatly reduced valuation. In fact, the valuation may be so low that partnering or selling the business makes little or no sense.
There is an important question to ask: “Was everything humanly possible done to make the business a success?” If the answer is a yes, then it may be time to consider closing the doors. Consulting with a few confidants may help you sort things out. The biggest issue is the emotional tie to the business and belief that the business has great potential. It may have great potential that is limited by factors beyond your control.
Almost all businesses have great potential in the beginning, but not all of them will develop to that great potential. The reasons for failure are many. The most important thing an entrepreneur can do is to ensure that one of those reasons is not the leadership and decision making, i.e., you! If you are in charge, have you done everything humanly possible to make the business a success? (Like, hire a great team, select a product opportunity with a great market, and develop backups to ensure continued operations.)
Failure happens and leaning to deal with failure is part of the entrepreneurial training. You will need to create a process to determine when it is time to end the business and then develop the courage to do so. Learn from the events and be smarter in the next endeavor. It may be little consolation, but recognize that many entrepreneurs failed one or more times before becoming a success. There is a time value of money and resources. You lose valuable time by waiting too long to close and move on to a better opportunity. It is important to have a never give up attitude, but it is equally important to realize when your real value resides elsewhere.
Taffy Williams is the author of: Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed and the Startup Blog. Connect with him on LinkedIn, Twitter @twilli2861, ColonialTDC , Facebook, and Startup Group.