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Knowing when to quit a business

Knowing when to quit a business

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It is important to fight against all odds but there are times when giving up is the right option. Follow the tips below to know the right time to give up

You aren’t meeting annual revenue projections

After two to three years, it’s time to take your company’s financial temperature. If you’re still not turning a profit and you’re out of money, this does not mean that it’s time for a loan that puts you further into debt. Instead, it may be time to seriously consider cutting your losses so you don’t wind up in personal financial trouble. After all, the whole purpose of incorporating (or having limited liability) is so that your business and personal finances are separate. The last situation you want to be in is personally repaying a business loan that you can’t afford.

Taking on that debt doesn’t just hurt your bottom line; personal financial losses can also be devastating to your family and health. It’s better to regroup and start again. Accept that you’ve learned a lot of great lessons in the process; then keep plugging away.

Your personal health has deteriorated

If you find yourself becoming unhealthy — whether through weight gain, weight loss, constant fatigue (which is a big difference from being tired as an excited entrepreneur), or heightened anxiety, then, you should evaluate whether your business is worth a decline in your physical and mental health.

Is that dreadful feeling that you used to get in the pit of your stomach before walking into your 9-to-5 — you know, the feeling that caused you to quit your old job and start your business in the first place — the same feeling you get when you walk into your own company? If so, this might also be a serious sign to reconsider at least the direction of your business.

Your mission loses its luster

Starting to forget why you started the business to begin with? This is definitely a sign that your company is heading toward the danger zone. It could mean one of two things, and both usually lead to the same unfortunate outcome.

Firstly, it could be that your mission is unclear. If vital checkpoints like objectives and a clear customer are missing, you could be spinning your wheels, spending unnecessary money and still not feeling fulfilled.

Or it could mean that you’ve lost your passion for your mission, one of the biggest propellers when times get tough. Without this drive, who or what else will push the business forward?

You love your product more than your customers do

Is your business providing a solution that customers are actually looking for? Or is your company centered on something you care about and really, really want others to care about, too? If it’s the latter — and you’re not seeing positive feedback through generated income — it might be time to shut it down.

Customer engagement is key. If the people you’re selling your product or service to don’t feel needed or special, you’ll likely lose their business, and without those sales, your entire brand will suffer.

Your key employees are leaving

The saying, “You’re always the last one to know” is especially true when the expert team you built starts to leave. If this is happening to you, you must ask yourself: is there something they know that I don’t? Have my employees tried to tell me something, and I simply didn’t listen?

‘Sleep Mode’ isn’t an option

Sleep mode is a dormant status that allows you to slow down your business and resume it at a later date.

People rarely think of purposefully stagnating their businesses instead of completely throwing in the towel. You can completely strip your business down to its bare bones and wait for your market to rebound (if it has boom-and-bust cycles), before coming back strong.

But there’s a catch: You need to have an alternative means of income for this to happen, because your business will not be generating any revenue during this time. If you’re on the verge of having to close your doors and sleep mode isn’t a viable option, then it’s time to bid your company adieu, thank it for the memories, and move on. It doesn’t mean that you have failed; just that you’re wise enough to start over.

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