Dear Brit: 'When Should You Give Up On Your Business?'
Four foolproof ways to know if it's time to throw in the towel.
Brit Morin was 25 when she left Google to start Brit + Co, a lifestyle and education company aimed at helping women cultivate creative confidence. Now — 10 years, $50 million in funding and 1.2 billion pageviews later — Brit’s passion is empowering more women to take the entrepreneurial leap. She’s a managing partner at VC fund Offline Ventures, host of iHeartRadio podcast Teach Me Something New, creator of Selfmade, a 10-week start-your-own-business course for women founders, and most recently — Entrepreneur advice columnist. Find her here answering the most personal and pressing questions of women entrepreneurs.
Have a question for Brit? Email it to firstname.lastname@example.org, and she could answer it in an upcoming column!
Q: When should you give up on your business?
Let’s face it, being an entrepreneur isn’t easy. Every day can feel like a rollercoaster: From moment to moment, there are highs, lows, twists and turns that throw you for a loop. In the process, you’re bound to question what you’re doing and why you’re doing it, particularly when things get tough.
At some point or another, even the best founders consider quitting prematurely. That’s why resilience is such a critical part of sticking out this journey. There have been countless moments where I’ve wanted to quit: The early days where I was way in over my head and didn’t know which way was up; the days spent trying to raise venture capital and getting told “no” way more than I would have liked; the days that that the term sheet fell apart; and especially the days where my business got thrown for a loop, and I had to make staffing changes or face the existential threat of losing the company. (Spoiler alert: Somehow we are not only still alive, but growing at 40% YoY and profitable.)
Distinguishing the difference between fleeting hard times and the time to call it quits can be a challenge. Sometimes we need to know when it's time to give up on a company and shut it down. If you're not sure whether or not your business is worth salvaging, keep these considerations in mind:
1. Is your business making money?
The first and most obvious sign that it might be time to give up on your business is if you’re not making any money. This could be for a variety of reasons: Your product or service isn’t resonating with customers, you’re not generating enough traffic or sales or your costs are too high. Assess whether your business is, or could be, financially viable, in even the smallest way.
2. Do you have a clear path to success?
In order to be successful, every business needs a solid plan in place. If you don’t think you can make your business profitable, or you don’t know how you will grow going forward, you might need to regroup and reassess what your business model should be going forward. Perhaps subscription is a better alternative to ecommerce. Maybe you don’t need all of the fixed costs of employees and would fare better with variable costs of consultants so that you can ramp your business up and down as money comes through the door. Get crafty with that P&L, and consider all of the options in front of you.
3. Are you passionate about your business?
This might be the most important question of all. If you’re not passionate about your business, it will be difficult to stick with it through the tough times. On the other hand, if you’re really excited about your business and its potential, you’ll be more likely to push through the challenges. Does the mission still keep you up at night, or are you more concerned with the money? If you don’t solve this problem, who else will? Do you still light up when you tell other people about what you do? These questions might help you determine your passion.
4. Are you too closely woven together with your business?
So often, I see founders stick with a failing business for their own ego’s sake. They don’t want to fail at their business because that would make them a personal failure. Trust me, out of all people who can say that they are personally woven into their business, I think I am the poster child of this one (hello, Brit + Co!?). It’s taken me 10 years to slowly separate my identity from that of my business. Somehow, I can now look at the business objectively and, even if it fails over time, truly believe that I was not the failure. The reality is that most businesses fail. The odds are *not* great for you. But what if you flipped the script? I always like to think of my business as a board game or video game. I’m always making moves to try and win or get to the next level. One day I hope to win the game, but I recognize that in games, sometimes you win and sometimes you lose. Even if I lose, I always move forward and want to play another round — the next time, a bit wiser and more experienced than the time before.
Ultimately, only you can decide whether or not it’s time to give up on your business. However, by considering these four factors, you can get a better sense of where you stand as you make an informed decision.
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