What do you
do when you’ve sunk a lot of time and money into a business that just isn’t
yielding the return you had expected or hoped for? You may feel as if you’ve passed the point of
no return because you’ve dumped so much money into it but it’s just not
working. Should you cut your losses or
keep pushing along in the hopes that things turn around? These are hard questions to answer and there’s
really no magic formula, as the solution may vary predicated on your specific
situation. Unfortunately, many
entrepreneurs and business owners are faced with this situation in their
pursuit of success.
You’ve probably
read all of the hokey posts and memes that attempt to be inspirational. They all say that success is about perseverance
and not quitting, but could there be instances when quitting really is the best
thing to do? There are times when
quitting is most definitely the wise choice.
Particularly if you’re running a business that’s going nowhere. Maybe your time and energy would be better
utilized on another business venture with better opportunities. Although, sometimes people don’t realize how
close they were to succeeding when they decided to call it quits.
Grappling
with this type of quagmire is enough to cause apoplexy. However, along with all of the other
difficult decisions that an entrepreneur must make, so must this be considered. When faced with such a quandary, one must
analyze all of the facts in an effort to come upon the most logical solution. Should you continue along the torturous path
of operating a company in turmoil or should you just bail?
Don’t Get Emotional
The best
business decisions are based upon wit, not emotions. Being emotional will only cloud your
judgement. We’re all human so this could
be very difficult, depending on your personality. Consider bringing other people into the equation. Solicit the advice of friends, family and
other business owners who might have a good understanding of what you’re
encountering. Write a pros and cons list
so that you can physically see the facts in front of you rather than just picturing
them in your mind.
If you are
not comfortable with your current situation, don’t worry. Comfort is not a feeling that business owners
always have. Chaos inspires change far
more than complacency. When everything
is running smooth at a company, many business owners take an, “if it’s not
broke, don’t fix it” stance. When there
is a severe shortage of cash, the creative juices begin to flow out of necessity.
Determine Your Risk Tolerance
Being an
entrepreneur requires an iron stomach. A
certain amount of risk is always involved in starting or operating a
business. It usually involves risking
both time and money. It’s up to you to
determine how much of either you are willing to lose. Drawing a line in the sand may enable you to
figure out how long you are willing to be in the game. No one wants to lose but losing is always a
possibility for an entrepreneur, despite the presence of extreme determination.
Risking
everything you have is usually not a good business model. Losing any amount is a hard pill to swallow
but it’s always a good idea to determine how much is too much. Once you’ve figured out what that number is,
then you have a better idea as to how much time and money you are willing to invest
into your business before pulling the plug.
Devise Alternative Solutions
If you think
you want to stick it out, you may need to be have a plan B. If whatever you’re currently doing is not
working, it is probably time to shift gears.
Insanity has been described as doing the same thing over and over again
but expecting different results.
Consider a drastic change in how you are conducting business. Open your mind to the possibilities. If you really want to hold onto your
business, maybe there is something to gain by considering a partner who brings
something different to the table. Maybe
a partner has a valuable book of business or client database, more money for
working capital, a different set of skills, etc. Doing so could breathe some life into your
operation.
Another
option is to consider an investor.
Convincing someone to give you money, particularly for a seemingly
failing business, is most definitely challenging. However, if your business possesses a
component that can lead someone to believing that it has value, you might have
a chance at some venture capital.
Crazier things have been done before.
Just keep in mind that if you bring someone in who has nothing to offer
other than money, you may have just hired yourself a boss.
Other
alternatives may include co-branding, diversifying, strategic alliances or teaming
up with another company that might have something to gain by having you under
their umbrella.
Consider an Exit Strategy
If your
business doesn’t work out, then what? If
you don’t have an answer to that question, you should start thinking about
one. It’s always good to have a backup
plan just in case things go wrong. Try
to make this plan before things get tight, when you’re still thinking
rationally. An exit strategy may involve
selling your business, closing your business, merging with another company,
downsizing, liquidation, hiring someone to assume your role while you figure
out what your next move will be, etc.
Business
owners tend to become emotionally attached to their companies as if it were
their baby. Walking away from a business
could in some way evoke the same feelings one would have about deserting a
family member or abandoning a close friend.
It’s rare for a person who worked hard to accomplish something would
ever feel good about giving up on their dream.
It’s just important to know that the road to success has many potholes
and speed bumps. What may appear to be a
failure could merely be a stepping stone to something greater.
This article
is not about quitting or perseverance. It’s
about considering the possibilities when faced with the many challenges that go
along with operating a business.
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