How To Deal With A Failing Business

Calling it quits on a small business is probably one of the hardest things you will ever have to do. A start-up is more than just a financial commitment, it’s an emotional one too – and deciding to kill it before it kills you can be one of the most gut-wrenching decisions in your life. But sometimes, it’s necessary. A bad business will soak up time, money and energy, while offering no return for that exhausting outlay. As profits flat-line and interest goes nowhere, some owners start to resemble gamblers in Las Vegas, grimly determined to ride out a losing streak. Don’t let that be you. Sometimes, it’s better to just cut your losses and run – here, we explain the when, why and how to generally deal with your failing business.

Running on Fumes

The most vital aspect of any business is cash flow. Without the almighty dollar flowing in, you’re going nowhere – no matter how good you feel about your prospects. Every start-up has to spend a year or two surviving off debt, but if you find yourself using borrowed/loaned money just to cover the basics for months on end, it’s a sure sign you need to put the thing down. When looking at this question, it’s vital to ask yourself whether the business could survive without the millstone of debt – if you were leaping in at zero, could it work. If your answer is ‘no’, it may be time to consider exploring other ventures.

It can be hard to analyse this aspect of a business with such a personal connection to it, but if your business is failing, and making a huge impact on your personal finances, it is time to face facts.


Flat lining

By rights, a successful business venture should get easier as time goes on. Once established, your workload should become easier to shoulder; while money and growth worries should evaporate. If you find yourself three years in with only flat growth to show for it, it may be time to reconsider. Without a definable, upward trajectory, you’ll have trouble attracting future capital to the project and ultimately end up going nowhere. Businesses thrive when people see an opportunity to jump on a bandwagon going somewhere special, not one circling the same familiar old ground, year in, year out.  


The Dot Com Bubble, the Housing Bubble… sometimes, things really are too good to be true. If you experience astronomical growth over a short period of time, it’s natural to want to celebrate. But do your numbers first – are you growing because you’re genuinely offering a unique service that people crave? Or have you just become part of the next financial crisis? Very rapid growth often spells impending disaster. Be realistic when assessing your company’s potential to still be around in, say, five years. If you can’t see that happening, take steps to adapt your business to survive in future years or prepare for your next venture.


Is working on this start-up a rush, or a drag? Desire is one of the most-important factors for influencing how much energy you can personally put into a project. If you really want something, you’ll do all you can. If you only think you want it, you’ll wear out long beforehand. Figuring out if you really have the spirit to continue can be the difference between a clean break, and a drawn-out slow motion crash and burn.

Shut Down

If you do decide to close your business start-up, it’ll be an emotional time. But it’s important to make sure you salvage something from the ashes: namely, experience. An intelligent businessperson can develop a workable concept by building on previous failures; and never forget that a true entrepreneur should always be ready to move on and develop and invest in something that will return profit.

Shut Down

When shutting down your business, you will have some assets which could be sold on. This could perhaps be equipment or your website. You can even choose to sell your business as a whole for somebody else to take on. If you are considering a new venture, keep anything aside which could be of use. For example your website could be re branded and tweaked to save you the outlay for your next business venture.

There are many companies who can assist the sale of your business or website. It could also be worth contacting those within your industry to see if anybody would be interested in taking over your business or an aspect of it to give you some capital for your future plans. This doesn’t necessarily mean shouting from the rooftops that you have failed, but you could simply hint you have opportunities elsewhere to expand and your current business is on the market.


Having a failed business under your belt, should be no means be something to think of negatively. While that particular venture didn’t succeed, you can regenerate and learn from the mistakes you made. Setting up your own company is one of the hardest challenges you will ever face. That fact that you even gave it a shot is something to be proud of.

At the end of the day, risk is the name of the game – and everyone will suffer setbacks at one point or another. Learn your lesson and move on and eventually you’ll hit the jackpot.