An entrepreneur may decide to stop doing business for a number of different reasons:
- retirement - transferring ownership is complex and must be planned well in advance of retirement but, if the company has an established market presence, the owner should consider handing it on, as it preserves all of the company's achievements, especially skills and jobs.
- voluntary closure - entrepreneurs simply decide to close down their business and therefore have to follow the relevant national procedures.
- bankruptcy - sometimes businesses are forced to stop trading. It may be because they are unable to adapt to the continuous changes that are part and parcel of business life - increased global competition, new products on the market, new technologies - or because of unforeseen events, such as the failure of a major customer.
To minimise losses for all concerned, early action is vital - either by planning a rescue strategy or deciding to liquidate.
Bankruptcy need not put honest entrepreneurs off starting afresh. Many restarters learn from their mistakes and their new businesses often prove more successful than others.