Long after the human patients recover from the coronavirus and inflation is behind us, small businesses will still be struggling.
And long nights will be spent deciding whether to try to stay in business.
Here are some things to weigh as you consider the future of a struggling small business.
The desire to continue
The most important part of most small businesses is the owner. The owner supplies the vision and the drive that makes the business run.
If you are drained of vision and drive, then allow yourself to exit. Soldiering on just so you don’t have to admit you’re done is unlikely to have a good result.
If you’re game to continue, there are more questions.
Is the business viable
As we creep back to the new “normal”, the next gating question is whether there’s a post pandemic market for the business’s product .
And if there is continuing demand for the product, how long is the ramp up? What financial resources does it take to survive the ramp up? And what’s the likely volume of business to be expected over the short run? The longer run?
What is the debt load of the business? Is it really feasible to pay that off?
Reorganize for survival
The pandemic has forced change and re evaluation on all of us. When things are already disrupted, considering change seems less overwhelming. And more essential.
Could the business continue with
- fewer owners
- fewer employees
- no brick and mortar premises
- narrower market
- broader market
- partnered with others
Embrace the disruption and move the pieces around the board, at least in your mind.
New debt and lingering death
Business loans seem like an obvious option.
However, it’s worth some thought as to whether the business can handle more debt. What is the current debt structure, and were you paying that debt down before the current distress?
Another way to think about more borrowing is that it may be essential as a short term strategy to keep food on the table until you have more options outside of the current business.
Wind down and move on
Writing the existing business off as a lost cause isn’t necessarily an all or nothing choice.
Perhaps you fold the existing business but remain in the same industry, as a proprietor rather than an entity, or as an entity after a personal bankruptcy.
Maybe, this is the time to change industries, take a salaried job, return to school, or ????
Challenges for all
The issues are complex and intertwined. And with the virus still shadowing our lives and inflation worldwide, uncertainty abounds. Get professional advice and allow yourself some time to consider how you move forward.