Starting a business takes a lot of hard work and faith in your idea. Making the decision to dissolve your business can be even more difficult. Whether the failure was truly your fault or a combination of factors you couldn’t control, you may feel you’ve let yourself and others down.
At a certain point, continuing to operate is a costly mistake that could negatively impact your chances of future success. Every entrepreneur must decide for themselves when enough is enough, but there are signs that will help you make a final decision.
5 Signs Your Business Needs Dissolution
Resist the urge to look back when assessing your business. Take a clear look at what’s happening in the present instead.
If your business isn’t seeing the growth you had anticipated, you may be tempted to play the blame game. Where did you go wrong? What could you have done differently? These are good questions, and a close examination of lessons learned will help you be more successful in the long run. However, now is not the time to question moves that can’t be changed.
An objective look at what’s happening in your business now will help you decide whether it’s time to close your doors or if you still have a few plays to run.
1. You Aren’t Meeting Revenue Projections
If you’ve run out of capital after year two or three and you’re still not turning a profit, it may be time to cut your losses. Many enthusiastic business owners convince themselves an infusion of cash will solve their problems. The last thing you want is to be repaying a business loan you couldn’t afford from your personal funds.
2. You’ve Lost the Spark
There are two main reasons why entrepreneurs begin losing enthusiasm for their start-ups. The first is that their mission was unclear to begin with. The second is that they have simply lost their passion for the original idea and want to move on to something else. Both scenarios are a sign it’s time to throw in the towel. Without enthusiasm for your mission, pushing a business forward is nearly impossible.
3. Your Health Is Suffering
The effects of stress on your health are real and potentially deadly. If you’re feeling constantly fatigued and anxious, or the idea of going into the office fills you with dread, have a serious conversation with yourself about your priorities. Even a successful business is not worth the decline of your mental or physical health.
4. Your Team Members Are Leaving
When key team members try to tell you something, don’t ignore them. You put a lot of thought into building a team of brilliant, faithful employees, but now it seems they are abandoning ship one by one. Is it possible your employees have been trying to tell you something, and you refused to listen? If the company morale is low and key personnel have begun leaving, don’t blame your team. Take a closer look at what’s really going on.
5. You Can’t Go Dormant
It is possible to stagnate a business until a market rebounds. If your business truly is suffering because of a down cycle in your field, stripping everything down to the bare bones and waiting it out could be a solution. However, if you can’t survive several months (or more) without revenue, dissolution may be the right move.
Get Advice From an Attorney
Levy Goldenberg LLP helps businesses in New York, New York, and Suffolk County. If you think it’s time to dissolve your business, call for a consultation and speak with an experienced commercial litigation attorney before making any final decisions.