When Is It Time To Throw In The towel?

Technibble’s articles mainly focus on starting a computer business, but something else that is just as important as opening a business is closing one. Its hard to determine when it is time to close your doors. Am I giving up too easily? Am I just in a slow patch right now? Here are 4 great indicators that it is time to close down.

Moving On

One of the happier notes of throwing in the towel is when you have achieved what you wanted to achieve. The objective for most of us is to own a successful business and when you reach this stage you can either continue on for a few years or sell the business. Many entrepreneurs actually prefer the thrill of the chase rather than the prize, so selling the business at this a great option.

No funds and No Income

This is one of the most common causes for business closure and it can happen in the following forms:

• Your resources have run out and the business is not making any money.
• Your losing money and the losses are increasing.
• Cash flow is insufficient and you have exhausted means to increase cash flow.
• Economic downturn (like a recession) resulting in less income and you don’t have the available funds to survive for the period.

Family First

If family are suffering with the continual operation of your business such as directing more funds into the business instead of providing for the needs of the family, then you need to reassess your priorities.

Not having fun

I personally believe that most successful business people enjoy what they are doing. If you get up in the morning and cant stand the thought of running your business, its time to get out.

No Shame

If your business isn’t going well, there is no shame in closing down. Don’t let your pride get in the way of making good business decisions. Closing your doors may be the best one you ever made. It makes more sense to close a failing business than to carry on, continue losing money and still have to close it later down the track.

Also, keep in mind that some people are not born to run their own business; and that is not necessarily a bad thing.
I believe the biggest trap for those who have lost their love of running their own business is because they love being a technician. They love the job.

However, when you are running your own business you do must more than just the job (eg. fixing computers). You are also the accountant managing the books, the receptionist answering the phone, the marketer creating advertising and the entrepreneur trying to build the business.
If you want to only work with computers, then getting a job with another company would be the best choice.

Do it right

Closing your business isn’t just about not going into work in the morning. Just as there are many steps to set up your business, there are also many steps to shut down your business. Here are some issues you need to address:

• Contact any outstanding invoices
• Cancelling your registrations – These can be business names, tax numbers or anything else you have to register for to go into business.
• Finalizing your obligations to employees and contractors – These can be lump sum payments for your employees or any outstanding bills with contractors.
• Lodging final tax returns/paying tax debt – An accountant can help you with this.
• Cancelling leases and insurance policies – Give your landlord the required notice as stated in your lease (usually 30-60 days).
• If you still have any sellable inventory, consider having a “going out of business” sale.
• Notify your creditors: server providers, suppliers, lenders and utilities.

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• Leave contact information with former business contacts, colleagues, and employees.

For further reading, one of our forum members, Hawks9999, made a great post about going from a self employed technician to working for someone else and how the way you work will change. Check out the stand-alone post here, or view the whole discussion here.