When Should You Close A Business?
So many of the successful business stories involve persistence.
The business owners continued chasing their dreams even after everyone could see that they should have stopped.
That is in the back of the mind of most entrepreneurs and managers faced with the decision of shutting down a business.
I’ve been involved in a few businesses that were shut down.
I was at a catalog company that closed down two of their brands. That got me looked at as kind of the person on the team that closed down companies. The Grimm Reaper in a way.
And I’ve shut down my own business. Even though it really never made money.
Here are a few things I learned about when you know it’s the right time to shut things down…
1. When There Is A Better Opportunity
At the catalog company there were a few things that went into shutting down the brands I was working with. First, the factory in Italy was increasing prices by a lot. That was putting margins under big time pressure. It was also a brand for older folks and the folks were dying and younger customers were committing to other brands.
Plus, the company I worked for was working on new exciting brand launches. That was the big one. There was simply a better opportunity.
The same was true with a website idea I started in 2007. I worked it all the way until about 2010. Then the blogging thing started showing promise. I decided at that time to quit the website and dive fully into blogging.
2. When You Don’t Have Enough Resources
And with the blogging thing I knew that I only had so many hours and so much energy to commit to anything. I wanted to give as much as possible to blogging. I didn’t have enough resources anymore to go with both. So I shut down the one that wasn’t working.
And that was true a bit with the catalog brands. The company was allocating its resources in a better way. To the brands that had growth potential.
If you’re stretched too thin it could be a sign that it’s time to shut things down.
3. When Starting From Scratch Is Better
Sometimes I like to think about what it would be like if I was starting a blogging agency from scratch. That gets me thinking about things I should change with Ghost Blog Writers. I don’t have to shut the business down, but getting in that frame of mind helps me think differently.
But sometimes in a business it is good to shut down. Maybe you’re involved with bad partners. Maybe the business isn’t setup properly for operations or financially.
Shut it down and start from scratch. It’ll take work, but maybe you’ll find new opportunity with a fresh start.
4. When You’re Lost
If you’re going into work for the company without energy or you feel like you don’t have a direction it could be a sign to shut it down and find something else.
If it’s a short-term issue where you’re lost then maybe it’s worth sticking out. But if you really aren’t sure where to take the company then maybe it’s time to shut it down and find something new.
Sometimes we hold ourselves back because we hold on tightly to what we know, what we feel certain about. But uncertainty in life is often what brings the most opportunity.
5. When You’re Dragged Out The Door Kicking & Screaming
I remember Michael Irvin, the football player, said that his advice to any player considering retirement is to stay until they drag you off the field kicking and screaming. He said he has never found a high like playing professional football.
It’s kind of sad. Most players have careers that don’t end on their terms. But maybe that’s the only way to really find your true limit.
If Michael Jordan would have stayed retired he wouldn’t have won three additional championships. He played until he really knew that he couldn’t compete anymore.
Maybe it’s the same with your business. Stick with it until someone drags you out of the building. An investor. A cofounder. A creditor.
This post reminds me of something Derek Sivers recently said about subtracting things from life. I really like that. It’s good for possessions, but it also can be good for business. You want balance in your life. Adding things won’t help. It won’t make you feel better. It won’t make your life better. Look to subtract. Especially if you’re adding things.
Look at your business situation. Have you added things over the years without even realizing it?
That could be the sign you need to shut down a business or product that needs to be shut down.