When we know the figure that 80% of startups fail, nobody should forget that behind that zombie company there is a story, a personal bet and a series of economic issues to solve.
Entrepreneurship goes hand in hand with success and failure. When the company does not generate profits, it is necessary to close the business, even if it is not easy. If we do not have enough clients to survive, keeping without expectations will end up doing more harm than good to the company.
To close is the smartest choice
When a company has losses, do not delay the closure because of an emotional issue or neglect, because closing carries not only sentimental but economic spending. It’s hard, it’s part of learning but mistakes are also learned. Those at the helm of business incubators know this very well. It is becoming more common to go to one of them, to advise us from the beginning of a business adventure.
Big companies like Toshiba surrendered. With a hundred years of history behind it, its outdated business model and its bad practices, it only produced losses and layoffs. When the time came, they had to say goodbye.
The closing plan
It is very important to understand that closing a business is almost as complicated as starting it.
If, when starting up a company, it is difficult to have money in the box, it will be also at the time of closure, and this makes everything more complicated. The most tempting solution is to run away and let the situation rot behind us while we cry in some corner, but that alone will make problems more complicated and that our personal brand (and perhaps our heritage) will be ruined forever.
The closing process of a business must be included in a “closing plan”. It is the equivalent of the business plan with which the company started. It should include a true balance of the company’s situation and all the actions that must be carried out in order to pay as much as possible to creditors and workers (most of them will accept a reduction of their credit), and it should be detailed how the cancellation of existing contracts (rentals, servers, domains, advisors, etc.) will be executed.
And move on.