Starting and running a business is challenging, which is why 7 out of 10 new ventures fail in the first 12 months. Making it past this first threshold is no guarantee of longevity either. It’s important to know the difference between a business that is still developing, and one that simply lacks the ingredients for long term success. Here are some warning signs that it’s time to consider closing your business.
Revenue is low
This is often the most basic sign that something isn’t working. Of course, low revenue can be attributed to a number of transitory things, such as the wrong season, or a bad promotional campaign. But if you’ve had consistently low revenue, it’s likely because of something more fundamental to your business. You may need to ask yourself if you’re providing products or services that your target customers actually want or need.
Hiscox, a provider of business insurance, highlight failure to verify customer needs and expectations as one of the most common small business pitfalls. They advise that businesses conduct proper market research and ask for regular feedback, rather than simply making assumptions about what the customer wants.
Whatever the reason for your low revenue, you need to be realistic about whether it’s something that can be changed, or if the business model is flawed in some way. If you’re still not making sufficient profit after a few years of trading, and your financial resources are dwindling, it could well be time to consider pulling the plug before you enter serious financial difficulties.
Your health is in decline
Are you dreading heading into work each morning because of the uphill struggle of trying to get your business succeed? This can lead to accumulated stress and anxiety, which in turn can cause serious mental and physical health problems. If you don’t address the underlying cause of these issues, they can easily seep into your home life and negatively impact your family and other personal relationships.
Don’t let a business you won’t admit is failing start to destroy your health and personal life. And if it is already, it’s definitely time to reassess your priorities and close the business down.
Your passion is gone
You started this company for a reason. If you find yourself struggling to recall the thoughts and feelings that inspired you initially, it may be time to step away. Your drive helps the business move forward and without that vision, everything will ultimately stagnate.
In conclusion
Always remember that closing your business doesn’t make you a failure as an entrepreneur. It might even be the first step towards a better, more successful company, and a happier life.
Businesses fail all the time, and just because you’ve failed once doesn’t mean you’ll fail again. So if you have a new idea, don’t be afraid to develop and launch a new company because business owners coming from a failed venture are actually more likely to succeed than a first-time business owner. After all, we learn the most valuable lessons from our mistakes!
