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Why Are So Many Small Businesses Closing? It's Not Always the Economy

bakery bakery business small business small business closure why are small businesses closing Oct 15, 2026
Pastel pink bakery storefront with elegant gold signage, a pink awning, floral decorations, and a warmly lit interior featuring a pastry display case filled with cakes and baked goods.

I don't know about you, but lately my Instagram feed feels like it's telling TWO completely different stories about entrepreneurship.

On one hand, I've seen TONS of videos of creators preaching things like...

"Let me show you how I made $10,000 in 7 days!"

"I make $75,000 a month selling cookies!"

"Here's how I gained 10,000 followers in 30 days!"

And on the other hand?

I can’t scroll more than five videos without seeing a small business owner announcing they're CLOSING THEIR DOORS.

And THOSE are the posts that break my heart.

Not necessarily because they're closing, but because I know how much goes into building a business. The money, the sacrifices, the missed moments, the sleepless nights, and the emotional attachment to something you worked and prayed so hard to create.

But there's something I think we need to talk about that often gets overlooked in these conversations.

Businesses don't always close because they're failing. Sometimes, the person who built the business simply OUTGROWS it.

And I know that because I've been there.

Sometimes You Outgrow the Business You Once Prayed For

When I opened my bakery in 2009, my three girls were 4, 6, and 8 years old.

I was passionate. I was driven. I had BIG dreams, my back was against the wall, and I was willing to work my ass off to make them happen.

And I DID.

I built an award-winning bakery, grew a team, expanded my business, and accomplished things I couldn't have imagined when I first started.

But here's what nobody really prepares you for when you enter into the world of entrepreneurship…

The person who STARTS your business isn't necessarily going to be the same person who RUNS it ten years later.

By 2019, my girls were teenagers, getting ready to graduate high school and head off to college.

And ME? I was a completely different woman.

My priorities had changed. My definition of success had changed. What I wanted my everyday life to look like had changed.

And the business I had once been SO passionate about building wasn't necessarily the business I wanted to keep running for the rest of my life.

Those feelings ultimately contributed to my decision to walk away from my bakery.

Did that mean I failed?

NO. It meant that I had grown. (Which is a part of being HUMAN).

And sometimes growth requires you to make decisions that the previous version of yourself would NEVER have imagined making.

Your Life Changes. Your Priorities Change. And that's NORMAL.

I've coached so many business owners who started their businesses during one season of life, only to find themselves questioning everything a few years later.

I've had clients who were literally in the middle of building out their dream bakeries when they found out they were pregnant with their first child.

Just think about that for a second. You've spent YEARS dreaming about opening this business.

You've invested your savings, signed a lease, purchased equipment, and committed to making this dream a reality. And suddenly? You're preparing to become a MOM.

Now the business you were SO excited about opening comes with a completely different set of emotions.

You start thinking about how many hours you'll be away from your baby. Whether you'll have the flexibility you imagined. Whether the life you're building is actually the life you WANT.

And it's not just motherhood.

Maybe you started your business at 25, and now you're 35.

Maybe you got married. Got divorced. Lost someone you loved. Developed new interests. Or maybe you're just EXHAUSTED from spending the last decade doing the same thing.

Whatever the reason, you're allowed to want something different from the life you originally planned.

That doesn't make you ungrateful.

And it certainly doesn't make you a failure.

But let's talk about the OTHER reasons small businesses close.

Now, is that the reason EVERY small business closes?

Absolutely NOT. Sometimes businesses close because they were never financially sustainable in the first place. And this is where I’m gonna share with you some really hard truths about entrepreneurship that you might’ve never heard.

While I wholeheartedly believe in pursuing your dreams, I also believe we need to stop romanticizing entrepreneurship without talking about what it actually takes to STAY in business.

You can be incredibly talented.

You can have an amazing product.

You can have customers who LOVE what you do.

And you can STILL find yourself in a business that's bleeding money.

PASSION IS NOT ENOUGH TO MOVE YOUR MISSION FORWARD.

I said what I said.

1. You Started a Business Without Enough Money to Sustain It

One of the biggest mistakes I see small business owners make is underestimating how much money it actually takes to operate a business.

Especially when it comes to opening a brick-and-mortar location.

People get so excited about the storefront, the branding, the equipment, the grand opening, and FINALLY having a place to call their own.

But what happens AFTER the grand opening?

What happens when sales don't immediately cover rent?

When payroll is due?

When equipment break?

When business slows down?

When you've invested everything you have into getting the doors OPEN, but you don't have enough money left to keep them open?

That's a VERY different conversation.

And it's one we need to be having BEFORE people sign commercial leases, uproot their lives, and quit their jobs.

2. You're Doing EVERYTHING Yourself Because You Can't Afford Help

I recently came across a business closure announcement from a husband-and-wife team that really stuck with me.

They shared that they'd been doing practically everything themselves for months.

And because they couldn't afford to hire employees, they were actually SLEEPING in their bakery.

Can you imagine?

I don't know the full details of their financial situation, and I’m not one to judge someone else’s decisions, but I can only imagine the emotional, physical, and financial strain of trying to keep a business alive when BOTH people are responsible for doing absolutely everything.

And unfortunately, I see versions of this all the time.

Business owners who can't afford to hire help because they're not making enough money.

But they can't make MORE money because they're already working at full capacity.

So what do they do?

They work longer hours.

They stop paying themselves.

They sacrifice their weekends, their relationships, and their health.

And eventually, something has to give.

If the only way your business can survive is for YOU to work yourself into the ground, that's not a sustainable business model.

That's a warning sign.

3. You're Making Sales, But You're Not Making PROFIT

Can we PLEASE stop confusing revenue with success?

Because making $10,000 in sales doesn't mean you MADE $10,000.

And having a line of customers out the door doesn't automatically mean your business is profitable.

You've still got ingredients, supplies, labor, rent, utilities, insurance, taxes, and a whole lot of other expenses that need to be paid.

And if you're not paying attention to those numbers?

You can be BUSY AS HELL and still be BROKE.

I've seen business owners continue selling products for prices that don't even cover their true costs.

They think they need MORE customers.

MORE orders.

MORE sales.

But more sales won't automatically fix a business that's losing money on what it sells.

In some cases, it just creates a BIGGER problem.

Revenue keeps your business moving. PROFIT helps keep your business alive.

And if you don't understand the difference, you're putting your entire business at risk.

4. You Built a Business That Doesn't Give You the Life You Wanted

Here's another reason small business owners eventually close their doors that I don't think gets talked about enough.

They built a business that makes money...

But they HATE running it.

Maybe the business is profitable, but they haven't taken a real vacation in five years.

Maybe they have employees, but every single decision still requires their approval.

Maybe they're missing family dinners, birthdays, holidays, and important moments because the business can't function without them.

At some point, you have to ask yourself:

What was the POINT of starting this business in the first place?

Was it to create financial freedom?

More flexibility?

More time with your family?

The ability to make your own decisions?

Because if the business you built has taken away every single thing you originally wanted, it's probably time to reevaluate how you're running it.

And sometimes, that means making operational changes.

Hiring people.

Creating systems.

Delegating responsibilities.

Changing your business model.

Other times?

It means acknowledging that you're ready for a completely different chapter.

And BOTH are valid.

How Do You Know When It's Time to Close Your Business?

This is where things get complicated.

Because there's a BIG difference between wanting to close your business because you're having a difficult season and wanting to close because the business genuinely no longer makes sense for your life.

Before making that decision, I'd encourage you to ask yourself a few questions.

Is my business actually profitable?

Not how much revenue you're bringing in. Not how busy you are. How much money is actually LEFT after expenses, including paying yourself appropriately?

Am I burned out because I hate my business or because I'm doing too much?

Those are two very different problems, and they don't necessarily require the same solution.

Could my business operate differently?

Would hiring help, improving your systems, adjusting your pricing, reducing your hours, or changing your offerings make the business more sustainable?

Do I still WANT this business?

And I mean REALLY want it.

Not because you've already invested thousands of dollars.

Not because you're afraid of what people will think.

Not because you've spent the last ten years building it.

But because the business still aligns with the person you are TODAY.

Closing Your Business Doesn't Always Mean You Failed

I think one of the hardest parts about entrepreneurship is how much of our identity gets wrapped up in what we build.

We spend YEARS telling people about our dreams.

We share the milestones.

We celebrate the wins.

We make our businesses a huge part of who we are.

And then when things change, we start worrying about what everyone else is going to think.

What will people say if I close?

Will they think I couldn't make it?

Will they think I gave up?

Will they think I FAILED?

Friend, hear me when I say this...

You’re allowed to change your mind about a dream you once wanted more than anything.

You're also allowed to acknowledge when something isn't working.

Sometimes the smartest business decision you can make is to restructure.

Sometimes it's to get help.

Sometimes it's to sell.

And yes, sometimes it's to close.

But whatever you decide, I hope you make that decision based on what's best for YOU and your future, not because you're afraid of what other people might think.

Because at the end of the day, your business is supposed to SUPPORT your life, not consume it.

And the fact that you once loved something doesn't mean you're obligated to love it forever.

Your business can be a successful chapter of your life without being the ENTIRE story.

And I think more entrepreneurs need to hear that.