The most likely problems—beginning and end poorly connected or lacking a definite turning point—aren't all that can go wrong. Some problems can happen to any kind of story, and I'll get to those in a minute. But there are two other problems to which circular stories are especially prone. Knowing what they are will help you watch out for them.
One problem is assuming that, because the story continues beyond the final confrontation, it doesn't have any plot chores to do. Such an ending can turn into something like a Victorian epilogue, babbling on about what happens to major (or even minor) characters for the next thirty years or so. There's no development, no plot, nothing but the author droning on until eventually the story falls dead of exhaustion.
Circular endings do have a job: showing the homecoming, the new norm; establishing how the middle (turning point) matters; bringing the story full circle.
After they've done their proper work in as direct and compact a way as possible, they should shut up.
Another problem is stopping the story short at the conclusion of your final confrontation, your Big Scene. Ending with a bang is fine for a linear story, but it short-circuits the potential strengths of structure and of resolution which make circular stories special.
After the gunfight and the defeat of the hired killer, Shane pauses for a moment to reassure the boy who's the story's narrator and then rides off alone, mirroring the story's opening in reverse order. Shane ends as it began, with a lone horseman in the distance, being watched by a young boy; but neither Shane nor the boy is precisely what he was at the outset. They're no longer strangers—to each other, or to the reader. The reader knows how each has changed the other's life for the better. Peace is now possible—the new norm.
Although we don't expect either man or boy to live blithely happily ever after, and although the story ends with a parting, a final farewell, we know both Shane and the boy are going to be all right now. This story is over, and it's a positive resolution even though not precisely a "happy" ending. We don't need the details. We know that something of importance has happened and now is resolved.
The close of Gone with the Wind seems even grimmer, if we consider only the gross facts of the situation. Rhett has finally left Scarlett for good. Her sole child has died. She has no husband and no way of supporting herself. None of these things is developed any further. They're left as flat facts, final.
But the story's main issue was Scarlett's resiliency and courage in defending and maintaining Tara, her home, and only secondarily her stormy romance with Rhett. Rhett's walking out is the crisis which leaves Scarlett alone again at the story's center— again the sole mistress of Tara. Whatever she may have lost, she still has that. And when she echoes the line that's helped her survive so many past crises, "I'll think about it tomorrow," we believe that somehow she'll cope and survive, and so will Tara, just as they always have.
That's all the resolution needed to make the ending a complete, satisfying one. The important things are settled—not every possible thing the author might have dragged the story out to explain.
And ending with an implicit reminder to the reader of Scarlett's proven (sometimes ruthless) ability to survive makes this story's close, like that of Shane, upbeat and positive in mood. It emphasizes Scarlett's essential identity—the lady of Tara, then, now, and always—and her characteristic refusal to accept defeat, even amid the wreckage of her life. We know she'll get by somehow—dead child, no money, lost lover notwithstanding. And that makes it a happy ending.
If you want the power of circularity and connectedness for your story, bring it back, bring it home first. Then let it be over.
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