Knowing When to Pull the Plug on a Startup
Unfortunately, not all business ventures succeed in this hypercompetitive landscape. It can be caused by lack of business skillsets, vague differentiation strategy, inferior product quality, or poor customer service. Since small businesses are mostly powered by passion, entrepreneurs are blinded by their vision and might not be in a good position to decide the future of their businesses.
If selling your company is not emotionally easy, closing a small business built on passion, hard work, and personal savings is much more difficult to bear.
While sales volume and profitability are good measures, how do you know if it is time to close your business or pull the plug to protect your remaining resources? Improving Your World offers 6 signs before you pull the plug. I find sign number 4 very relevant:
If you have to borrow more money in order to pay your credit payments or any other business obligations. If you have more debt than you do have assets than your company is not going to make a profit, so you need to fix the problem, but if you have tried everything and still can’t meet your monthly obligations than you will need to pull the plug on your small business.
Also, listen to Marketplace Podcast on Pulling the Plug to learn more about this emotionally draining yet very practical business decision.
