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    3 Replies Latest reply on Nov 26, 2011 1:02 PM by LUCKIEST

    What if you just can't make your business profitable?

    Don Todrin Adventurer

      If It Can't Make A Profit, Kill It.

       

      Not every business can survive as it is currently organized. The evaluation is simple. If you downsize appropriately,  can this business survive, can it be run profitably downsized to appropriate levels based on current revenues?

       

      If the answer is "no" or as I frequently hear "almost, pretty close, it's a step in the right direction, it's better for certain," then it is time to close the business, liquidate the collateral for the benefit of the bank,  and move onto an Offer In Compromise, so you can settle your personal liability and move on  with your life.

       

      Being an effective  small business leader is not about leading your employees and family into the jaws  of self destruction. Everyone who is following you, depending upon you expects more. If the business can not be made to be profitable it must be liquidated in some meaningful way, for everyones best interest, as all you would be doing is kicking the can down the road to do otherwise with constant stress and pain.. Be it selling it as a going concern for less then what is owed or liquidating the assets it must be done.

       

      Yes this admission is a disappointment, but it is not a defeat, in fact it is the best decision you can make, as it allows everyone involved to close the books honorably, recover the most possible  and move on, you included. Small business owners never die, they simply recover and live to play again. If you take the cure.

       

      Wasting assets to pursue a business that cannot and will not succeed is a fruitless waste of resources and time and serves no viable purpose.   Unfortunately, many entrepreneurs are so skilled at surviving, juggling revenue, handling payables, bobbing and weaving, that they can kick the inevitable can down the road for a very long time...losing more and gaining little.

       

      If it don't work...kill it.

       

      You can implement an Offer in Compromise  submission that supports a payoff of your personal guaranty for pennies on the dollar without bankruptcy, so you can afford the losses and move on.  In fact in most cases especially with an SBA guaranteed loan, the payoff can be paid over time with no interest.

       

      Yes, there is life  and options other then bankruptcy after defaulted debt.  

        • Re: What if you just can't make your business profitable?
          LUCKIEST Guide

          Most interesting post, Don. Who are you?? Go to Profile and share some info.

           

          The most critical aspect of any business  is to manage the cash coming in and going out.

          Regardless of how well the business produces, if it cannot pay the bills, the business will fail and close.

           

          To close one own business is a major decision that should not be taken lightly.

          When you realize you have made a mistake, be willing to accept the consequences of your actions.

           

          Move on (easier said than done)

           

          Happy Thanksgiving, LUCKIEST

            • Re: What if you just can't make your business profitable?
              Don Todrin Adventurer

              Luckiest,

              In this brutal recession, what is happening s thousands of businesses are experiencing massively reduced revenues and cannot possibly support their mission under such declines unles they make major adjustments. Short of that the  decision is either to hang on and waste time and resources or do the smart thing and "kill it".

              Yes it is a difficult decision which is why I wrote this post to inspire small business owners in this predicament to consider the value and logic of kicking the inevitable can down the road, forestalling foreclosure but not able to win. This was who I am talking to here.

              Thanks for your comment.

               

              I will go to my profile and add info, I am the CEO of Second Wind Consultants Inc a national workout and turnaround firm. I have recently written a book published by Entrepreneur pres called Successfully navigating The Downturn, and  a workbook called the Four Pillar turnaround system. Both are available as a free download from my web site, www.secondwindconsulants.com.  It is my desire to help any business owner succeed. It s tough enugh out there, we all need help.

              Don Todrin.