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Expert Panel, Forbes Coaches Council
Top business and career coaches from Forbes Coaches Council offer firsthand insights on leadership development & careers.
Starting a business is a complex, ever-evolving monster of a task, and tough decisions have to be made almost every day. Perhaps no decision is quite so tough as when an owner has reached the crossroads where money’s tight, frustration is setting in and it’s time to decide whether to press on or cut losses. That single decision could mean the start of a new direction for a business—or its end.
Unfortunately, many entrepreneurs may not know how to make that decision if they haven’t been there before. It’s often a matter of experience and perspective. We enlisted 13 members of Forbes Coaches Council to share the one definite sign they believe indicates it’s time to walk away from a startup business.
Members of Forbes Coaches Council discuss how entrepreneurs can know it’s time to walk away from their startup business.PHOTOS COURTESY OF THE INDIVIDUAL MEMBERS.
1. You’ve Lost Sight Of Your “Why”
When the going gets tough, do a gut check and ask yourself two very important questions: “Why did I start this business in the first place? Will I have any possible regrets down the road if I walk away from it?” Those two questions should provide the clarity you need in order to make your decision to press on or cut your losses. – Elizabeth Pearson, Elizabeth Pearson Executive Coaching
2. You’ve Stopped Loving The Process
A startup consists of a lot of, well, starting up. In other words, there’s going to be a lot of processes before you see results. Consequently, if you stop loving the daily actions of building your company, the results will either never come or be unsatisfactory. Research shows money can buy happiness (at least a little), but it can’t cure unhappiness. An intolerable daily grind isn’t worth it. – Justin Giddings, The Kickstarter Guy
3. Cash Flow Is Inconsistent And Insufficient
As an entrepreneur, it is vital to continue to look at the cash flow for your business. If your cash flow is not consistent and you have tried every way possible to make it work and it still does not, it is time to cut your losses. Cash flow is king for any business, and the numbers do not lie! Learn from the experience and figure out how you will be able to win next time! – Stephannie Addo, Dr. Stephannie Addo Enterprises
4. There Aren’t Enough Sales
Too many entrepreneurs are so passionate they ignore the signs highlighting no market need. In business, numbers don’t lie. Your profit and revenue are what they are. If you are not growing sales, lack repeat business or have to compromise profit for sales, something is wrong. Create a scorecard, and use that scorecard to determine if you have a potential business or a flop. – Brad Federman, F&H Solutions Group
5. You’re Borrowing Beyond Your Set Limits
Experts say when you go to a casino you should have an amount that you are okay to lose. Entrepreneurs who go beyond their set limit and start borrowing beyond their plan can create great stress. Holding on to the idea and being passionate can go too far when you are attempt to recover your losses by gambling more. Know your limits, and set them. Go beyond those with your advisors’ clear consensus. – John M. O’Connor, Career Pro Inc.
6. You’re Feeling Unhappy, Exasperated, Depleted
Business is supposed to be hard, but it should not deplete your resources or your life for an extended period of time. If you find that you exasperated, frustrated and simply unhappy and you have tried everything to make it work, it just may be time to cut the ties and move on to something else. Take the lessons learned and make your next endeavor one that you will love and that will help you to thrive. – Pierrette Raymond, Pierrette Raymond Consulting & Coaching
7. You’re Not Having Fun Anymore
It’s time to walk when you’re not having fun any longer. Entrepreneurs wake up with an overwhelming urge to create value and achieve their goals. The fun of the challenge fuels their passion. Times can get tough, but keep going if you still enjoy what you are doing and have funds available to keep moving. If at the end of the day it fails, you can look in the mirror and know you gave it your all. – Rick Itzkowich, Vistage Chair San Diego
8. There Is No Sustainable Market
It’s time to walk away when you objectively determine there is no sustainable market for your product or service and you are not willing to make the investment to educate a market. At that point, there is no upside to continuing to invest time and money. Everything you have already put into the business becomes a sunk cost. The risk is turning a sunk cost into a sinkhole. – Tracy Levine, Advantage Talent, Inc.
9. You Feel Like There’s No Way Out
If you’re simply in too deep and you just can’t see yourself getting out, get out! At the same time, if you’re one sale, one deal, one client away from pulling it off, get off your butt and do everything you can to make it happen. – Ryan Stewman, Break Free Academy
10. Your Health Is Suffering
This question is certainly one that is tough to answer. I would say that the best sign would be one’s health. Naturally, health is the most important thing one should always look after, above and beyond dollars and cents. If your health is suffering severely because of owning a business, it may not be in the best interest of your family or the business to continue. – Danielle Jenkins, Integrity Management & Consulting Group
11. You’re Feeling Regret
It is understood that entrepreneurship is inherently risky, and as the old adage goes, “A good businessperson knows when to fold.” That being said, from experience, feelings of regret are a sure sign that the emotional drive of the said entrepreneur has reached a point of no return. Since that emotional drive is necessary for success, it should be seen as the end point of that particular project. – Kamyar Shah, World Consulting Group
12. You Feel You’ve Done Everything Possible
There are times in the entrepreneur’s life when they will have to decide whether it’s either time to retool and reset or walk away. A sure sign that it’s time to walk away is when you have done everything that you can possibly do and the business still isn’t thriving. This means you’ve invested heavily in systems and services to help you, but nothing is working—not marketing, not coaching, not cash. – Dr. Venessa Marie Perry, Health Resources Solutions, LLC
13. You No Longer Believe In The Reason You Started
There are many business analytics that provide indications and forecasts, but none will be as definitive about the health of your startup as your core belief in what you’re trying to achieve. Startups will have struggles and may survive bleak financial statements, but if you no longer believe in the reason you started, it’s time to evaluate your “why” and see if it’s worth sacrificing more. – Erik Fredrickson, Erik Fredrickson Coaching