Peer-to-Peer: “Should I close my company?”
In our last issue, the president of a B.C.-based tech company wrote to ask PROFIT-Xtra readers:
“My business is in trouble. How do I put my emotions aside and decide if it’s time to shut down?”
Best reader responses
Wayne Edgar, Trade Exchange Canada:
This is probably the toughest decision a businessperson has to make. Before you decide to pull the plug, you need to make sure you can answer the following question: “Why is it failing?”
Is it because it’s just not a good business idea? Are the wrong people running it? Is it badly capitalized? Would merging with another company make it profitable?
Just because a company isn’t making money (which is usually what businesspeople mean when they say that it’s “in trouble”) doesn’t mean the company doesn’t have any value. Get someone to take an impartial look at your company, such as a business coach, banker, accountant or someone you trust in your industry. This person can help you see whether there’s some light at the end of the tunnel that you might not be able to see.
Kelly J. Ramsay:
Seeing your business in trouble is definitely not a pleasant experience, and setting emotions aside when trying to decide what you should do isn’t easy.
To make an objective decision, you need to find answers to the following questions:
- Is there a market for our products or services?
- Is the market growing or shrinking?
- Can the business make money?
- If I reduced costs, would I be able to keep it running?
- Can I find additional partners willing to invest, or someone who’s willing to buy it?
- What would the impact be on my personal life and health if I were to keep it? What if I were to let it go?
Answering these questions will give you a very clear idea as to whether or not you should continue or close. Good luck!
For his answer, Kelly J. Ramsay will receive a copy of The Wow Factor: The 33 Things You Must (and Must Not) Do to Guarantee Your Edge in Today’s Business World by Frances Cole Jones.
Watch for another Peer-to-Peer question in the next PROFIT-Xtra.