At what point do you just euthanize the company. At what point do you just...shut it down?
When there's Nope, not Hope.
If it's just the debt that can't be paid off, most banks will restructure them, own the equity of the company, but keep the company going; they won't shut it down. Lots of creative ways for debts to be paid, and if you're lookin' for ideas, go and re-watch Les Mis.
The Shutdown Point happens when, say, a new 8-waffle hammer production system comes along that makes eight horseshoes for the same price as one. Now all of the single horseshoers can tighten their belts and cut costs and tweak production and marketing all they want...but they'll never compete with the new technology. At that point, as soon as you see the 8-waffler making shoes cheap and easy, then it's time to shut things down.
Related or Semi-related Video
Finance: What is a 1099?0 Views
Finance, a la shmoop. What is a 1099? Well it's a tax form for the rest of us the
non fully employed, the non recipients of crappy health care and benefit plans, the [Man looks shocked at his medical bill]
non recipients of fancy corporate business cards those of us who choose to [Business card for Brett Corporate]
go it on our own as consultants, contractors, day laborers and
independents who self employ under the yoke of many masters trying to make our [A contractors diary]
own little way in the world, yeah. Corporations who hire contractors in
whatever form, must deliver to those contractors a form 1099 which outlines [Corporation giving out 1099s to contractors]
and stipulates the details of the job performed for the contractee. That 1099
is a direct conduit to the IRS holding out their arm to shake your hand and [The form 1099s are sent to the IRS]
then turning it 90 degrees to the right. [IRS's hand out expecting something]
Up Next
What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...