Sign one:
You have numerous sunken costs. Almost all businesses have sunken costs, but once they reach a certain point there is no hope of continuing with the business. When you have sunken costs all you end up doing is putting good money into a bad situation, you are never going to see any return on your money. If you do this over a long enough period pretty soon you are not going to have any money left and your business will go bankrupt.

Sign two:
While it is a struggle to get your business up and running during the first few years, you should be making a profit at the end of your second year. If your company has been operating at a loss for at least three years in a row from the time you started the business it is only obvious that your business is not going to be successful.

Sign three:
Another way to know when it is time to pull the plug on your small business comes before you even start up your small business. If you have done some market research on your business and have discovered that there isn't a need for your product or service then you should pull the plug on your business before you even start. You can always go back to the drawing board and come up with a new idea.

Sign four:
If you have to borrow more money in order to pay your credit payments or any other business obligations. If you have more debt than you do have assets than your company is not going to make a profit, so you need to fix the problem, but if you have tried everything and still can't meet your monthly obligations than you will need to pull the plug on your small business.

Sign five:
Another sign that your business is in trouble is if you start getting past due notices from all of your suppliers because you do not have the money to pay them as they come due.

Sign six:
You have seen a huge decrease in sales and have no idea what the problem is. If you can't find a solution to increase your sales of products or service then you should pull the plug before it is too late.

Most of the reasons that people need to pull the plug on their small business is because they did not do any market research. By doing market research you can find out if your business will succeed in the area you have chosen and you can find out if there is a demand for your product or service. Another common reason that business fail is that the owners have not watched their finances and have not made smart business decisions. The key to running a successful business is to do market research to be sure there is a demand for your business and to create a business plan so that you can know what to expect from your small business.