Ask a Pro: Closing Time With businesses everywhere struggling, how do you decide if it's time to throw in the towel?
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Q:When is it time to call it quits?
A: What business isn't struggling right now? But still, there are some red flags:
You find yourself positively spinning--or outright denying--the negative numbers.
Entrepreneurs tend to be optimistic, and in the face of bad results, there's a tendency to think, "Just a bit longer." But Barry Staw, a professor at UC Berkeley's Haas School of Business who has studied how organizations often escalate commitment to failing endeavors, warns: "Don't be the person who needs to be hit over the head with a sledgehammer. The longer you keep going, the harder it will be to withdraw--and the more money you're probably going to lose."
Nobody else thinks it's a good investment.
Would you put money into the business as it is now? Ask others for an honest answer and take the nos seriously. "You should never sit on a stock unless you're willing to put in new money for it, and the same thing goes for a business," Staw says. "Many entrepreneurs have both successes and failures under their belts. There's no point in betting your whole entrepreneurial life on a single venture."