It's a painful moment when any business can no longer support itself.
All companies, from startup to mature stage, can fail - whether that's well-known energy companies like Enron, which was liquidated after an embarrassing fraud scandal, or a local high street business.
These failures may be related to causes beyond a company's control, such as the economic downturn, or a result of unsustainable internal structures.
Either way, the death of a business is both a painful internal process that affects everyone from employees and shareholders all the way up to the boardroom, and a potential source of wider disruption in today's uncertain market.
What is a business in decline?
A failing business is one which can no longer retain profitability, either a result of dwindling sales, large debts, or large expenses that cannot be covered by its cash flow.
A business in decline is usually faced with a number of options: cease all operations and go into liquidation; restructure and try to cut costs; or seek a buyout from another company.
What do investors see in them?
If a company is publicly listed on a stock exchange, profit warnings are likely to make investors run a mile and seek cover in a more profitable enterprise.
However, there is one potential source of salvation for a company in crisis: the private equity firm.
Private equity firms manage large pools of money from investors and often purchase struggling companies, investing capital and resources in the hope of turning a business around and then selling it on for a profit or listing its shares for sale on a stock exchange.
Declining businesses in the UK today
According to the latest figures from the Department of Business Innovation and Skills, the number of company liquidations between September and December of 2013 fell by 7.1 per cent to 3,552 compared to the same period the year before.
Although that might still sound like a lot, there are over 3 million registered businesses in the UK alone, and the number of companies going out of business today is far below the 2009 peak.
The UK and the global economy may be slowly gaining traction again after the devastation of the financial crisis, but many businesses in the UK still face a number of challenges when it comes to keeping themselves in the black.
Eye-watering business rates and a lack of credit are just two examples of the barriers businesses, both large and small, currently face.
Although current low interest rates are helpful in the short term to help businesses deal with their debts, there is increasing concern about the rise of "zombie" firms.
These businesses are saddled with debts that prevent them from expanding or innovating but able to stay on life support as they generate just enough revenue to cover their interest payments in today's very low rate environment.
Case study: Polaroid
We explore the slow fade of an instant film pioneer.
Polaroid Corporation was once often described as the "darling of Wall St".
This home-grown American company revolutionised the world of photography with its instant pictures.
What started out as a company making specialised eyewear for the American army and navy became a photography giant when founder Edwin Land developed the first instant camera after his daughter asked why it took so long to see a picture once it was taken.
The Polaroid camera had seemingly endless applications: from creating passport photos, to ensuring continuity in films, even to capturing and recording crime scenes.
At its height, the company was known as one of the "Nifty 50", a group of companies that never failed to deliver on growth, and was constantly increasing its dividend payments to shareholders.
The success of the company, which at its height dominated the US camera market, was built upon its patents. In total, Edwin Land held over 500 patents and his company's unique position in the photographic market ensured that Polaroid Corporation remained dominant throughout the 1950s, 1960s and 1970s.
The digital age
"Polaroid became the leader of one product generation and was disrupted by the advent of another," says Ronald Klingebiel, Professor of Strategy at Warwick Business School.
That disruption came in the form of digital technology, which allowed users to take better quality pictures and access and store them virtually.
While it's often thought that successful companies are assassinated by their lack of foresight or declining appetite for innovation, Polaroid's case wasn't as simple.
"It's not that Polaroid didn't see digital cameras coming. In fact, they launched an early digital camera in 1996, the PDC-2000," says Ronald.
"But with years of experience in instant photography, Polaroid managers dismissed this venture into new unusual terrain quicker than they should have. They were concerned over the initially low capabilities of digital cameras. Plus they didn't want their core revenue source cannibalised."
So a lack of innovation didn't cripple Polaroid but what Ronald calls a "conservatism bias" that made the company averse to taking risks with new technology.
The death of Polaroid
It wasn't just failure to engage with the impact of the digital camera that killed instant film.
Polaroid's obsession with its patents, which in the end it used as a crutch, led its directors to pursue rival Kodak in a patent infringement case that lasted a whopping 14 years.
Although Polaroid was awarded $925 million (£550 million) in damages, the case dealt a significant blow to the corporation's finances and left it open to a hostile takeover attempt, which led to more court cases, and more legal fees.
Throughout the 1990s Polaroid struggled with stagnating sales and began restructuring, laying off thousands of staff as it began to withdraw back to its core market of instant film.
"Polaroid underestimated the wrenching changes that the digital camera eventually brought to the way we consume pictures," says Ronald. "Companies less biased by past successes took a different, more embracing approach to digital photography."
By 2001, Polaroid had filed for bankruptcy protection and the company as it had been known for the last 64 years no longer existed. In 2002, it was purchased by a private equity firm run by investment bank J.P. Morgan.
Since then, Polaroid has been passed from one private equity firm to the next and has fought off bankruptcy twice.
A company that once pioneered instant photography now limps behind, clinging on to the retro charm of its brand without the thirst for innovation that drove its original success.
The history of Polaroid Corporation
1926 Edwin H. Land drops out of Harvard after his first year to concentrate on light polarisation.
1932 Land establishes the company Land-Wheelwright Laboratories.
1937 Polaroid is founded.
1948 Land begins selling the Polaroid Land Model 95, the first instant camera with self-developing film.
1956-58 Polaroid Corporation manufactures its one-millionth camera. Polaroid products are now distributed in over 45 countries worldwide.
1957 Polaroid Corporation lists on the New York Stock Exchange.
1963 Polaroid's first colour film camera is introduced.
1977 Land registers his 500th patent. The OneStep Land camera becomes the best-selling camera in the US.
1980 Land retires as chief executive.
1983 Land's name is dropped from product names. Polaroid Corporation now employs over 13,000 employees and generates $1.3 billion in sales.
1986 Polaroid Corporation wins a patent infringement battle with Kodak.
1991 Edwin Land dies.
1998-1999 Polaroid's digital cameras become bestsellers in the US.
2001 Polaroid Corporation files for bankruptcy protection and trading in its shares is suspended.
2002 Polaroid Corporation is purchased by J. P. Morgan Chase & Co.'s private equity firm One Equity Partners for $56 million.
2005 Privately-owned company Petters Group Worldwide announces its acquisition of Polaroid Corporation for $426 million.
2008 Polaroid once again files for bankruptcy protection.
2009 Hilco Consumer Capital and Gordon Brothers Brands purchases Polaroid Corporation. Scott W. Hardy is named as the new president.
Source: The Photographic Resource Center, Boston University