Side Hustle School Ep. 3072 - Q&A: “Why do struggling businesses keep their doors open?”
May 30, 2025
How do some failing retail stores manage to keep their doors open? Discover the surprising factors that contribute to their longevity, including external funding and tax benefits. Explore the complexities of unprofitable businesses that persist due to loss leadership or personal passion. This discussion sheds light on the resilience required to navigate challenging environments while maintaining a business, revealing the intricate reasons behind keeping ventures alive despite financial struggles.
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Why Some Unprofitable Stores Survive
- Some retail stores remain open for years despite low profit or losses due to hidden factors distinct to their business model.
- These factors include psychological investment, business strategy, and unseen financial advantages.
Hidden Business Strategies Explored
- A store might operate as a loss leader, billboard, or strategic presence for a larger business or franchise.
- Tax advantages, favorable leases, or external funding can also keep them afloat despite financial losses.
Psychological Attachment Keeps Stores Open
- Business owners sometimes keep stores open out of hope for future profit or psychological attachment.
- This can lead to prolonged operation despite ongoing losses; they remain stuck in the business.