ChApter 11 | AFTER YOU OPEN—KEEPING ON THE PATH TO SUCCESS | 189
Axiom: Bigger is not necessarily better.
Advice: To make your business bigger, plan as
carefully as you did when you began. Resist the
urge to overexpand. You will very likely continue
to do well if you expand slowly and sensibly.Getting Out of Business
What if your business is losing money and
you’ve already scaled down your expenses,
tried innovative marketing techniques,
and made sure you have a high-quality
product or service? You’ll need to either
fundamentally change your business or
get out of it. You’ll be wise to make these
tough decisions promptly if you keep
losing money. If you decide to get out of
business, you have the following basic
options.Lock the Doors and Leave
Disappearing is almost always a bad
idea unless you plan never to come back.
Walking out creates more problems than it
solves, not to mention the hassles you will
cause your landlord, your lender, your other
creditors, and your friends.Sell the Business
This may be a realistic option if your busi-
ness makes a small profit, or sometimes even
if it doesn’t. Someone else may be satisfied
with less than you are or may have visions of
how to make a better profit.
If you can’t raise enough cash to pay
your creditors and they aren’t willing to
take less than the face amount of what
you owe them, you may have to declare
bankruptcy just to get rid of the business.
Or, if you’re lucky, you may find someone
willing to buy your business and try to
turn it around.
Make a balance sheet for your business
similar to the Personal Financial Statement
you created in Chapter 5. A simplified
version might look like the following
example, although you will want much
more detail.exAmple:
Sally’s bookstore has been limping
along, almost breaking even for nearly
two years, and Sally can’t afford to
keep the store open any longer. After
preparing a balance sheet, Sally sees
that if she can sell her business for at
least $16,000 cash, she can pay her
creditors and come out clean.