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Three signs it may be time to quit... or at least pivot.

Three signs it may be time to quit... or at least pivot.

Oct 23 2014

Part of the entrepreneurial ethos is the notion of persistence and never quitting.  I believe strongly in persistence and absolutely believe that it is a very important part of being an entrepreneur.  I am going to talk about an area that you VERY rarely hear spoken of, and that is knowing when to quit.  First of all, let me set up some parameters and disclaimers here.  I don't believe you should ever quit on pursuing your passions.  I do believe that sometimes you may need to adjust your expectations and adjust HOW you pursue your passions. 


I am going to relate this to one of my experiences.  In 2007 I started developing a concept, that turned a product, that turned into a company.  I won't go into the areas where I made mistakes and where I did things right, but what I will tell you is that I eventually had to quit.  This was not a decision that was made easily, and in many ways, was not a decision at all, but a consequence.  And because it was a consequence rather than a decision, it was not handled as well as it should have been.

 

Once the writing was on the wall, that failure was pretty eminent, I was given one of the best pieces of advice I have ever received in business.  My friend Avi in Tel Aviv told me that the key to be a successful entrepreneur is to stay alive long enough for success to present itself.  What he meant, was keep your business around long enough, and success will present itself. I have really taken that to heart and have tried to develop some principals to assist me in that area.  At the time I had not instilled these principals into the business I mentioned earlier and it cost me.

 

I am going to list a few things that are probably signs you need to quit, or at the very least make a major pivot.

1. The business starts negatively impacting your most important relationships.  I have some relationships in my life, on which I would not put a value.  Those include my wife, my parents, my sister and my closest friends.  In many ways this sounds really cliché, but in practice, this is much more rare than you may think.  How many times are relationships destroyed for money?  It happens frequently.  For me, I would rather maintain these relationships than build a billion dollar company.  When your business starts harming your relationships, and it is usually the marriage that is most susceptible to these negative impacts, it is time to consider quitting.

 

2. When the business negatively impacts your health.  Being an entrepreneur is a high stress, high pressure proposition.  As someone who suffers from a genetic disposition towards severe depression, I am acutely aware of how these pressures can threaten your health.  These stresses can manifest themselves through depression, and can also physically impact other areas, such as cardiac health.  Remember that NO AMOUNT OF MONEY is worth sacrificing your health. 


3. When the business threatens personal financial ruin for you.  One of my critical mistakes that I made in the business I mentioned earlier, is that I built out the overhead too quickly.  Before a year was up, I had built my overhead to over $50,000 per month.  I had the sales to justify it for most of those months, but when the bottom dropped out of the sales, my business was stuck with a lot of bills.  Now I had started and helped to start lots of businesses, but most of those businesses were built on a shoestring budget and never had more than a couple of thousand dollars in debt, and I could always handle that personally if I had to.  Now I was faced with feeding a monster that I was not in a position to do. 


Knowing when to pull the plug is not easy.  It may be one of the hardest things you ever have to do.  Much of your self-worth and identity are wrapped up in your business.  In my next blog post I am going to discuss some steps to take to avoid auguring in, and how to conduct a controlled crash that minimizes damage.

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