Written by: Dawn Kennedy, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
This is one of those topics that nobody really wants to talk about. For some reason, when we close a business, people feel bad for us, or it seems like we are supposed to have feelings of shame or failure. However, losing a business can be a power move where you cash out of something you’ve built but that is no longer serving you. I’ve been here. I am an admitted serial entrepreneur and have voluntarily closed businesses for reasons that were beneficial for myself and my family.
Businesses close for a variety of reasons, and the smart entrepreneur knows when a business idea has run its course and it is time to get out of the venture before financial difficulties begin. Too often I see owners who are holding onto a business for emotional reasons when it is no longer thriving. Or are staying open because they just feel obligated. Both of those are a recipe for financial distress, burnout, unhappiness, and eventual mismanagement because they stop caring. Here are a few examples of when closing a business is a power move.
1. The Market Changed, But You Don’t Want To
At the Ready Publications, LLC existed from January of 2013 through September of 2018 when we decided to no longer publish “The Online Magazine for First Responders.” The magazine still exists, and the site is active. You can go read an issue if you would like. But the LLC is dissolved, and we no longer publish anything or do any consulting. Fun fact. I was a paramedic and firefighter in Arizona when I first got out of the Navy in the early 1990s, so I really understood the field.
When we started ATR, most first responder specific magazines were still published in hard copy and the subscriptions weren’t cheap. We were only available online, free, targeted to support more rural areas, and not supported by subscription fees. Over the five years, we held events, published issues, and consulted with a variety of agencies and businesses.
It grew to a respectable six figures, and it was fun, making an impact, and read each month around the world. But the market changed. Our competitors were showing up online with more and more free content and much larger subscriber lists. And heavy hitter sponsors. Then two of our competitors announced that they were only going to publish digital versions of their very well-known industry leading magazines starting in 2019, and we made the decision that we didn’t want to try and compete for readers in that space.
We completed our issues and our agreements, deposited our checks, dissolved the company, and disbursed ourselves the cash. We decided to cash out. And we did.
2. Your Client’s Needs Changed and Your Business Has Run Its Course
Businesses that do well solve a problem in the marketplace. Another of my ventures, Dragon Slayer Tutors, supported law students through school to the bar exam. The niche was law students like I was: mid-career working adults with families. I was a peer tutor starting in 2013 and started Dragon Slayer Tutors around 2017.
I went to law school in a part-time program in a school where students were required by the State Bar of California to take the First Year Law Students Exam, or Baby Bar. If you’ve heard that Kim Kardashian was in law school and has been studying for a state test after her first year, this is the same exam. This exam was required to continue studying in the program. Failing the exam meant dismissal from law school.
I developed my own approaches and supported students through this exam and through regular law school classes. I then opened a monthly membership for students who wanted weekly group review sessions and did very well. I was helping students prepare and pass the rigorous First Year Law Students Exam and move through their studies… until my law school’s status was changed by the state and students were no longer required to sit for the statutory exam to continue through school to the bar.
This changed happened in late 2020, so the incoming class of students didn’t actually need my exam prep anymore. A few still wanted law school class support, but there wasn’t the same number of students who needed the extra group sessions and practice for the statutory exam that was no longer required.
So, I’ve kept a few students here and there, but the core of my business really ran its course by October of 2020 when my last remaining students passed that final admission of the exam by the state. Recognizing that my services are no longer needed is a strength, not anything to feel bad about, and to be honest, I am thrilled that my alma mater’s accreditation has changed.
3. The Business No Longer Serves You
You are master and commander of your business. You get to decide what your business gets to look like, what it offers, who it serves, and how you want to run it. Sometimes the business no longer works for your life.
Your passions can change. You can decide that you no longer want to be in that business anymore. I know a specialty boutique owner and a restauranteur who both said, “I’m not having fun anymore, I want out.” And they got out.
The finances can change. The wholesale cost of something may raise to the point that you’re no longer profitable right now. Perhaps you need to go back to a J-O-B for a little bit because something in your life changes and you need the stability, or the insurance.
The business model can change. Maybe the brick and mortar needed to close, and you only run a wholesale line of your amazing bath products. Or because you want the flexibility to attend the out-of-town soccer games when your kid makes the regional team.
I think this is the area where people feel bad about closing, but this is a power move: balancing your business with your life. Keep in mind that you can always open again in the future. Again, you are master and commander.
4. The Business Evolved Into Something Else
You aren’t meant to stay the same. You are meant to grow and to change and to evolve. And your business can too. Sometimes we close one business because it became something else. I see this all the time in my consulting business.
In my own business, my branding is changing because I am evolving from more coaching to more consulting-type services. My old brand, “Entre Money Coach” will, in fact, close, and I will just use my name. So, I will be closing another business by the beginning of the year, but it is just another power move.
We need to start normalizing the evolving and dynamic nature of business, particularly solopreneurs who gain skills and evolve offers regularly. I know few of my law school classmates who are still practicing in the areas they started in after graduation and some have left practice to pursue other ventures. Rather than seeing these moves as failings or closings as something negative, let’s begin to celebrate these moves and teach others to look at these evolutions for what they are: power moves.
Dawn Kennedy, Executive Contributor Brainz Magazine Dawn Kennedy is an attorney, business consultant and mentor, author, and CEO of Convoy Road Coffee Roasters. She has an extensive background in program management and strategic planning, working for the U.S. Army and for companies in both government and private sectors. Dawn began business consulting in 2011 and, since 2017, has focused on small business growth and profitability. She works in a variety of industries, including attorneys, coaches, spas, restaurants, retail boutiques, and e-commerce businesses. She is the CEO of Convoy Road Coffee Roasters, a company she started with her husband in January of 2021 and has grown over 3500% by the end of July. Dawn is the author of "The Profit Accelerator for Small Business" and hosts the Profit Accelerator podcast. She believes above all else that all entrepreneurs have a unique gift to bring to the world, and they should be profitable doing it.
