Here at The Accountancy Partnership, we’re always uber keen to do anything we can to encourage start-up ventures, point budding entrepreneurs in the right direction and help further grow flourishing SMEs. There’s nothing we love more than a smashing success story and if our regular advice articles have anything to do with it, then even better! However as all good advisers should, we’re also here to help you realise when it might be time to cut your losses and concede defeat on a business that just isn’t working.
If you’ve stumbled across this blog post through desperately trying to find any small chink of hope that could possibly save your failing business then find comfort in that fact that not every entrepreneurial venture is going to take off. You aren’t the first and you certainly won’t be the last aspiring businessperson forced to give up on their venture but as frustrating and upsetting as this is, it might be for the best. We definitely aren’t suggesting that quitting at the first hurdle is the way forward but when you’ve given all you’ve got and things just aren’t falling into place, it’s important to accept the reality of the situation.
When consumer demand just isn’t big enough
Unyielding perseverance and determination of steel is what entrepreneurs are always associated with but there are a number of different reasons as to why a business may not be working, in spite of your steadfast efforts. Firstly, no matter how great of an idea you think you have had or how useful you believe your product or service might be, there just might not be a big enough demand for it in the ever-expanding marketplace.
You could be offering something that is just too niche and therefore won’t be able to create a self-sustaining business. We might sound like a broken record constantly reminding you to do your market research but this really is the best way to head off a sticky situation like this. You need to have 100% confidence in the knowledge that there is a gap in the market for what you’re providing and that you’re able to compete with likeminded competitors. Running a business is extremely costly and if there isn’t a sufficient demand, there won’t be enough custom to enable you to even break even let alone make a substantial profit.
When reinvention fails to reap the rewards
Reinvention or rebranding is sometimes exactly what you need to jump over the hurdle and kick-start your stagnating business into action once more. Go back to the drawing board and reassess what your target audience wants, how your competitors are hitting the nail on the head and in contrast, establish exactly why you haven’t been.
For example, if your product is particularly niche then consider scaling the business down to a much smaller, part-time operation which you can manage as a side project while focusing your efforts on something more lucrative. For instance, if you have a bricks-and-mortar retail business that has been run into the ground by financial strain and lack of physical custom, think about relaunching it as a less demanding ecommerce business that will save you both time and money. However, if reinvention and adaptation still don’t remedy, or at least better the situation then accept that it was a gallant last ditch attempt that didn’t work so it’s time to move on to pastures new.
When the passion you once had has gone
In the same way a business can only work if there are customers who want what it is offering, it also requires an unlimited supply of passion from you, the business owner. This burning desire to make a success of your idea is a pre-requisite to success and without this fire to fuel the operation, your efforts are redundant. Whether you’re demotivated by the struggles you have been facing or have become distracted by a shiny new project with more potential, you can’t possibly continue with a floundering business venture without a passion to make it work.
It’s not (all) about the money, money, money
Closing the shutters on a business is as big of a decision as starting it up in the first place so it’s crucial that you invest the adequate time and consideration into establishing whether this is your best option. Don’t measure your success exclusively on monetary gain because the network you have cultivated, the client base you have grown and the brand exposure you have achieved are equally as valuable.
Relaunching a business under a different brand or reinventing an existing brand are both strenuous and expensive processes that could be easily avoided if you employ the right brain power before making any rash decisions.
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We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!