When to Pull the Plug on Your Failing Business?

08 Oct When to Pull the Plug on Your Failing Business?

Using personal credit cards to prop up a struggling business by Jonathan Ginsberg, Atlanta bankruptcy attorney, is on my list of 10 symptoms for diagnosing when to pull the plug on your failing business, topped only by borrowing from the government by not paying your taxes.

Jonathan hit the nail on the head when he said small business owners will hang on for months after an objective observer would have concluded the business model no longer works.

Here are 10 symptoms to help you decide when to pull the plug on your failing business:

  1. Not turning in your sales or payroll tax returns because you don’t have the money. This is a huge one because you are personally liable for these taxes and you cannot discharge them in bankruptcy.
  2. Using personal credit cards to prop up your business.
  3. Using credit cards to pay your personal expenses because you don’t take home any money from your business.
  4. You are not paying your trade creditors and are increasing your business debt.
  5. You are cash advancing or balance transferring to have the money to pay your credit card payments.
  6. Not keeping up with your bookkeeping so you have no idea where you stand with your business finances.
  7. You are behind on filing your tax returns or business licensing paperwork.
  8. You have bouncing checks because you bank accounts have insufficient funds.
  9. You are using payday loans, pawnshops or car title loans.
  10. You are working longer and longer hours in your busines but still not taking home a profit.

This is not an exclusive list. There are many other factors to consider when to pull the plug on your failing business.

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Jill Michaux has helped Kansas consumers with debt problems for three decades. She and her partner, Mark Neis, are Topeka's only bankruptcy specialists, board certified in consumer bankruptcy law by the American Board of Certification. She help start the National Association of Consumer Bankruptcy Attorneys.
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