(Newswire.net — January 11, 2020) — Like the country song says ‘you got to know when to hold ‘em, you got to know when to fold ‘em…’ Like the card-playing gambler of the song, a business owner needs the same types of instincts in keeping a business afloat. While perseverance is an admirable, even necessary, trait for successful entrepreneurs, sometimes it’s advisable to step back and take a long hard look at where the business is at and, more importantly, where it’s headed – or not. Knowing when to stop is a sign of a winner, rather than someone who plugs doggedly on regardless of the costs.
Unfortunately, you have plenty of company: the fact is that over 80 percent of businesses – especially new businesses within their first 18 months – don’t make the cut for the long term. It’s not necessarily the owner’s fault in some cases. Factors such as unexpected changes in consumer markets or location issues, such as a new highway diverting customers away from the business, can all impact even the best-planned and run enterprises.
The biggest challenge to businesses of all sizes and structures is cash flow, which is the lifeblood of any enterprise. If yours has been shrinking into the negative column, and debt is accumulating faster than income and you haven’t been able to reverse the course over six to 12 months and see no path forward to reaching your goals, then it’s time for a clear-eyed assessment of the situation.
Or perhaps things aren’t dire (yet) financially but an owner realizes over time that the initial passion for starting and keeping the business going simply isn’t there anymore, that maintaining the business has become a burden and hassle. Going to work every day becomes a chore, one that an owner no longer relishes.
Illness or other misfortune can strike the owner or key employees, leaving the enterprise’s management unable to continue operating to maximum efficiency without leadership.
If any of these apply to your situation, and you have already tried to turn things around, it could be time to shutter the enterprise and move on – hopefully, to something even better.
Make no mistake: quitting before you’ve piled up insurmountable debt is not surrender: it’s the smart thing to do so you can cut losses and eventually move on toward a path closer to your intended trajectory and goals.
The IRS has a list of documents for the self-employed which should be filed for the year the business no longer exists. Be sure to check the box listing the filing as a “final return” – make sure that any entity which files on your behalf does so.
For smaller organizations, the Small Business Administration has information that can not only help you determine your best exit strategy, but offers a checklist of the reports and other paperwork necessary to submit to federal and other agencies when closing. When you plan early on, your team of accountants, attorneys, as well as other qualified and experienced businesses, such as professional closing organizations, can help make the exit transition easier, less expensive and less painful.
Knowing what to expect of the business dissolution process with the right professional help can make the decision easier to close the chapter on part of your life as you get ready for new opportunities.