A: I know your heart is heavy, and I admire your sense of responsibility to your employees, but postponing the inevitable is not responsible. And yes, I believe it is inevitable that you will close the restaurant. First, take a step back and assess what will happen if you do try to sweat things out for another year. Do you expect that the economy in your area will rebound quickly and allow you to swing back to a profit? If the answer is anything short of "Absolutely, positively," then you need to make the tough decision to shutter the business now. If you do not, the bank will make it for you. Banks and credit card companies are treating small businesses the way they're treating individuals: They're slashing credit lines on those they think can't continue to pay the bills. So even if you keep the restaurant open, your creditors will very likely pull the plug on you soon. And when that happens, watch out. In the process of cutting you off, they will probably jack up the interest rate on the debt you already owe. Also, there is a bigger issue at play here. If you saddle your bank with more bad debt by trying to stay open, you are potentially asking your fellow taxpayers to foot the bill for your failure. The federal government is forking over billions of dollars to banks teetering on mountains of bad debt; that's money that in one form or another will eventually come out of the taxpayers' pockets. Consider your role in all of this, and act responsibly. I respect that this is a wrenching decision for you, but please recognize that the first step in getting out of a big hole is to stop digging it any deeper. Closing the restaurant doesn't mean you are being cavalier toward your employees; they know the efforts you've made to stay in business. Now it is time to face facts and do what is right.
Suze Orman's most recent book is her 2009 Action Plan: Keeping Your Money Safe & Sound (Spiegel & Grau).