The Right Time to Say Goodbye
Your business is much like your baby. You birthed it, named it, did your best at raising it and it's betraying you by causing nothing but stress and never turning a profit. Unfortunately, this is the parenting story of too many entrepreneurs. What’s even sadder is although many entrepreneurs are in this bad parenting nightmare, they won’t share this and the thought of closing their baby - their business is absolutely impossible.
We want to discuss the elephant in the entrepreneurial bedroom. It is okay to close your doors. No one will judge you, you are not a failure, no you could not have worked any harder or done more. Now that all of those mental thoughts are out of the way, let’s discuss when giving up makes sense.
This business causes you continual mental or physical discomfort. As an entrepreneur, you’ve basically signed up for a lifetime of mental and physical discomfort between late nights, early mornings and constant worry of when a bill will be paid - but this level is different. If you work in a physically demanding industry such as restaurants and you are constantly in severe pain because of it, it may be worth re-evaluating your continued role in your business. I personally subscribe to the mindset that there is no amount of money that is worth your health and that applies even more here. Burnout is real and do not let the “possibility” of making it big be the reason you end up laid on a stretcher.
Your current situation will probably persist for the next 6 months to 1 year+. There is a real stress that comes from lack of financial stability. Ask yourself, how likely is it that this position you're in right now will continue and for how long. Would you continue if you were still in this position in 3 months, 9 months or 2 years? We all have our personal tolerance timelines but make sure you do have a timeline so you avoid just coasting through life stressed.
Your finances do not add up. You got into business to make money. Yes, there is a ramp up time frame where you will probably not make what you expect, but do you have working capital or any reserves to hold you over? How will you fund any deficits if you do not have cash reserves? Is it worth it for you to go into personal debt or rely on unconventional financing to make your dream a reality? It may feel like your expenses always outweigh your revenue. If months and years into business this continues, it may be time to consider a pivot or closing completely.
Most entrepreneurs will consider this at one point or another - “I need to get another higher paying job in order to keep this going”. This pivotal point is important and I need you to pay attention once you get there. If you have to get another job to sustain the business you started so you wouldn't have to work for others, there is a problem. 1, because you will be busy working the other job, you can’t even spend time at the business and 2, it indicates that there is a long road ahead before the business can ever start sustaining itself. Heed that call when you get it, it will save you many more months of constant stress.
Yes, it is hard, yes there is an emotional attachment, but take the emotions out of the thought process for just a minute. Lay out the facts and the numbers. You can even calculate your numbers for yourself using our free Break Even Projections spreadsheet. This sheet allows you to plug in some numbers and see where your business stands as well as some hypothetical scenarios.
Many entrepreneurs don't know when to give up because they don't know what else they would do if they are not working in their business. Trust us, there is light at the end of the tunnel. You will find another passion and just because this business doesn't work does not mean that it never can. Right now wasn't the best timing. Maybe you did not have enough funding now but if you close and save a little, you can retry in a few years. Every millionaire has a business or two that failed. Do not be too hard on yourself and make the decisions that are best for you.