You've tried your best, but you cannot get it to work. IS IT TIME TO GET OUT?
This short post is not a DYI guide. It is intended to assist you think about the circumstances, and to TAKE ACTION if appropriate!
OPTIONS:
There are basically 5 options in considering IF and/or WHEN to GET OUT!
1. Close the business without taking any remedial action, OR
2. Try selling it without taking any remedial action, OR
3. Fix it by doing it better, and/or
4. Fix it by doing it differently, and then
5. Sell it, OR Keep it
Which option you choose will depend on the specific circumstances and your state of mind.
RULES IN DECIDING WHICH OPTION MAY BE BEST:
Rule 1: You are probably too "close" to your business to make a well considered decision on your own. Get skilled, experienced, objective advice.
Rule 2: Be wary of the quality of your decisions if your state of mind is "troubled". Get skilled, experienced, objective advice.
STEPS IN DECIDING WHETHER TO "GET OUT"
STEP 1: ASCERTAIN WHETHER YOU ARE (OR SOON WILL BE) "TRADING IN INSOLVENT CIRCUMSTANCES".
The "failing" smaller business is often reactive in that it will recognise it's problem only after it's been experiencing that problem for some time - resulting in it "trading whilst insolvent".
This is most relevant if your business/ franchise is in a Company name.
Why? It has personal-liability implications. This will influence the urgency and the types of action that should be considered.
There are substantial loss-management & legal actions & implications that are too complex to to discuss here.
However, all is not lost! There may be ways out of it WITHOUT disastrous consequences for you. Get good advice!
Rule: WATCH YOUR MOUTH!
Be very careful about "broadcasting" your financial circumstances to anyone. There will be clauses in your Franchise Agreement and/or Lease Agreement regarding the viability of your financial position. Whether you intend to or not, your representations (whether correct or not) to your franchisor, landlord or bank may result in you losing control of the situation.
STEP 2: GET YOUR BUSINESS ASSESSED TO DETERMINE IF AND HOW YOUR PROBLEM CAN BE FIXED. (This applies whether you are "insolvent" or not).
This step need NOT cost you anything. This initial assessment and the drafting of Action Plans is offered by some businesses for free (with the hope of building a long term mutually beneficial relationship with your business).
These Action Plans may include a rough costing for implementation so that you can determine whether it's feasible to implement.
Get appropriate objective, experienced assistance for this process.
Remember:
a) There may be a ZERO COST (or very low cost) to implementing these plans, AND
b) The cost of NOT implementing the Plans may be greater than the cost of implementing them.
STEP 3: IF IT CAN BE FIXED AT ACCEPTABLE COST, ARE YOU WILLING TO FIX IT?
An assessment must be made regarding:
The likely costs, benefits & implications of not fixing it, and how they can be managed?
The likely costs, benefits & implications of fixing it, and how they can be managed?
Once again, don't make this decision on your own.
Many businesses can be quickly (and inexpensively) fixed by: focusing on a few aspects that can be improved, and/or by creative problem-solving and opportunity-creation.
STEP 4: ASSUMING YOU'VE DECIDED TO FIX IT, ARE YOU GOIING TO SELL IT OR KEEP IT?
Assuming you've decided to fix it you must then decide whether you are going to:
• Fix it and keep it? or
• Fix it and then sell it?
The terms of your Lease & Franchise Agreement will be pivotal in determining which of these options is viable and best for you. Your personal objectives & needs must also be considered (if you have the luxury of choice).
STEP 5: IF IT CANNOT BE FIXED, OR YOU AREN'T WILLING TO FIX IT.
A well though through plan to exit the business must be formulated and executed.
This will necessitate determining how best to sell or exit the business whilst maximising any potential benefit & minimising any further cost to you.
The Terms of your Lease, Franchise Agreement & Bank Loan (if applicable) will be instrumental in determining how best to do this.
Remember: Watch your mouth! (see above). "Loose lips" may cost you dearly
CONCLUSION:
Exiting a business is not the same as a "defeat". It must be a planned & orderly process to get the best result.
The Franchisees Advocate Group
Assisting franchisees and small businesses to achieve their goals quickly and inexpensively.
This short post is not a DYI guide. It is intended to assist you think about the circumstances, and to TAKE ACTION if appropriate!
OPTIONS:
There are basically 5 options in considering IF and/or WHEN to GET OUT!
1. Close the business without taking any remedial action, OR
2. Try selling it without taking any remedial action, OR
3. Fix it by doing it better, and/or
4. Fix it by doing it differently, and then
5. Sell it, OR Keep it
Which option you choose will depend on the specific circumstances and your state of mind.
RULES IN DECIDING WHICH OPTION MAY BE BEST:
Rule 1: You are probably too "close" to your business to make a well considered decision on your own. Get skilled, experienced, objective advice.
Rule 2: Be wary of the quality of your decisions if your state of mind is "troubled". Get skilled, experienced, objective advice.
STEPS IN DECIDING WHETHER TO "GET OUT"
STEP 1: ASCERTAIN WHETHER YOU ARE (OR SOON WILL BE) "TRADING IN INSOLVENT CIRCUMSTANCES".
The "failing" smaller business is often reactive in that it will recognise it's problem only after it's been experiencing that problem for some time - resulting in it "trading whilst insolvent".
This is most relevant if your business/ franchise is in a Company name.
Why? It has personal-liability implications. This will influence the urgency and the types of action that should be considered.
There are substantial loss-management & legal actions & implications that are too complex to to discuss here.
However, all is not lost! There may be ways out of it WITHOUT disastrous consequences for you. Get good advice!
Rule: WATCH YOUR MOUTH!
Be very careful about "broadcasting" your financial circumstances to anyone. There will be clauses in your Franchise Agreement and/or Lease Agreement regarding the viability of your financial position. Whether you intend to or not, your representations (whether correct or not) to your franchisor, landlord or bank may result in you losing control of the situation.
STEP 2: GET YOUR BUSINESS ASSESSED TO DETERMINE IF AND HOW YOUR PROBLEM CAN BE FIXED. (This applies whether you are "insolvent" or not).
This step need NOT cost you anything. This initial assessment and the drafting of Action Plans is offered by some businesses for free (with the hope of building a long term mutually beneficial relationship with your business).
These Action Plans may include a rough costing for implementation so that you can determine whether it's feasible to implement.
Get appropriate objective, experienced assistance for this process.
Remember:
a) There may be a ZERO COST (or very low cost) to implementing these plans, AND
b) The cost of NOT implementing the Plans may be greater than the cost of implementing them.
STEP 3: IF IT CAN BE FIXED AT ACCEPTABLE COST, ARE YOU WILLING TO FIX IT?
An assessment must be made regarding:
The likely costs, benefits & implications of not fixing it, and how they can be managed?
The likely costs, benefits & implications of fixing it, and how they can be managed?
Once again, don't make this decision on your own.
Many businesses can be quickly (and inexpensively) fixed by: focusing on a few aspects that can be improved, and/or by creative problem-solving and opportunity-creation.
STEP 4: ASSUMING YOU'VE DECIDED TO FIX IT, ARE YOU GOIING TO SELL IT OR KEEP IT?
Assuming you've decided to fix it you must then decide whether you are going to:
• Fix it and keep it? or
• Fix it and then sell it?
The terms of your Lease & Franchise Agreement will be pivotal in determining which of these options is viable and best for you. Your personal objectives & needs must also be considered (if you have the luxury of choice).
STEP 5: IF IT CANNOT BE FIXED, OR YOU AREN'T WILLING TO FIX IT.
A well though through plan to exit the business must be formulated and executed.
This will necessitate determining how best to sell or exit the business whilst maximising any potential benefit & minimising any further cost to you.
The Terms of your Lease, Franchise Agreement & Bank Loan (if applicable) will be instrumental in determining how best to do this.
Remember: Watch your mouth! (see above). "Loose lips" may cost you dearly
CONCLUSION:
Exiting a business is not the same as a "defeat". It must be a planned & orderly process to get the best result.
The Franchisees Advocate Group
Assisting franchisees and small businesses to achieve their goals quickly and inexpensively.
