How to Decide if it's Time to Quit Your Business
Consider reconsidering if you feel deeply about any of these factors
Happy Friday everybody!
I always say this: Founders are some of the most passionate people around. They live and breathe their businesses, and who’s to blame, it’s what the job demands.
However, this humbling statistic about startups snaps things into perspective:
As many as 90% of startups fail.
It is what it is, there’s no sugarcoating it. It is the risk we all take when we choose this journey.
So naturally, quitting your business can feel like the ultimate defeat.
I just want to tell you that, if done smartly, it can potentially be the best move you make for yourself.
Here’s how to know when it’s time to bow out gracefully:
1. Consistent Financial Losses
A business by design is supposed to generate revenue and make profits.
If it doesn’t do that, then it is an expensive, resource-eating hobby. If your business is consistently draining money and no cost-cutting or strategic pivot seems to help, consider this to be the most important window to reconsider.
Case in Point: Quirky, a startup that aimed to crowdsource product ideas. Despite raising over $180 million, it filed for bankruptcy in 2015 due to consistent financial losses. The company couldn’t turn ideas into profitable products fast enough.
2. Loss of Passion
Passion is what drives every entrepreneur to show up everyday, despite the uncertainty, the fear, the outside motivation.
So if it happens that you’re waking up dreading the day ahead, lacking motivation, or simply uninterested in your business, it’s a clear sign that something’s off. Don’t burn yourself out, consider reconsidering.
Case in Point: Gina Bianchini, the co-founder of Ning, left the company despite its success because she felt her passion shifting.
She went on to start Mighty Networks, where she found renewed enthusiasm.
3. Market Changes
Staying relevant is crucial, and sometimes that means knowing when to step away.
Markets are ever-evolving, especially today; it’s important to be realistic about your market position.
If your industry is on the decline, your product/service is becoming obsolete, or if you find it hard to innovate or stay ahead of competitors, it might be time to rethink your business model or consider exiting.
Case in Point: Blockbuster’s failure to adapt to the digital shift in movie rentals is a classic example. Despite opportunities to buy Netflix, Blockbuster couldn’t keep up with the changing market and eventually went bankrupt.
4. Impact on Health and Well-being
You can’t pour from an empty cup. Health is a non-negotiable, and if your business is causing you excessive stress, health issues, or negatively impacting your personal life, it’s time to reassess your priorities.
No business is worth sacrificing your long-term well-being.
Case in Point: Arianna Huffington collapsed from exhaustion in 2007, leading her to prioritise health and well-being. This experience influenced her to start Thrive Global, focusing on health and stress reduction.
Pre-Quitting Actionable Advice
Financial Vigilance: Conduct regular financial audits and seek external advice to manage finances effectively.
Task Delegation: Delegate energy-draining tasks to maintain focus on what excites you.
Health Prioritization: Set work-life boundaries, prioritise your health.
Growth Analysis: Consistently analyse growth metrics and explore new markets or demographics.
Strategic Partnerships: Seek partnerships that can help scale your business and reach new customers.
No one is questioning how tough making this decision is, but by recognising the signs and making an informed choice, you can pivot towards new opportunities and growth.
Remember, exiting doesn’t mean failing — it often means you have the insight to move on to bigger and better things.
What is it about your startup that keeps you going?