Business. Entreprenuer.
Most of us start this journey in a similar manner. We have an idea. A product. An opportunity. Or we spot a need that needs to filled.
We do some research. We ask friends. Is this a good idea? Would you pay me money for this?
We decide to forge ahead in spite of the many words of caution from well meaning friends and family. “You already have a great job…”. “It’s Risky…”. “Think of your family”.
We go to Mum, Dad, brother or sister. Even that enreprenurial Uncle or Aunt. We ask for money. We ask for a loan. We bootstrap. We pool our savings together.
We are thoroughly optimistic and believe in the impossible. Our Motto is “Think and you can Achieve”.
And so, we launch our business. We are called entreprenuers.
Now we have to run the business, get appointments, secure orders, deliver, collect the money, account for the money and report it to Income Tax. As the business grows, we hire more people to help. Hey, maybe we even pay back that loan to Uncle and Aunty…with interest…
Some of us will continue to expand our business, service our debts, attract additional capital or investments, continue growing until one day, we become fouders and owners of a listed company.
Some of us will make a comfortable amount of money. Good returns on capital. Enough to see the kids to college overseas as well as buy properties and other assets to build our personal wealth.
Some of us will make a little money. Enough to meet our operational expenses and reward ourselves with an overseas trip…but not enough to expand the business.
Some of us will break even. Every dollar earned goes back to the company’s expenses.
But most of us might find ourselves facing a situation where we need to decide “Should I go on or Should I Quit?”
On paper, it may seem to be an easy decision to make. A so called “No-Brainer”. If expenses are more than income, and that is the case for a long time, then you should close your business. Your capital may be better employed in a fixed deposit account.
In reality it is a difficult decision to make.
A decision to cease operations of a business you founded is a statement that you have failed. That your idea was worthless. That the opportunity you saw, did not need any filling. You were WRONG. Big Time. How many of us are willing to face this demon?
The decision to close also requires you to have a thick face and unsentimental heart. You may need to apologise to your Mum and Dad. Brother or Sister. Or that Uncle and Aunt that you
borrowed money from. You are telling them that they were suckers to have believed in you. Their money is now gone. How many of us can do this to our family and friends?
Ceasing of operations also means that you have to disregard the loyalty and hardwork of your staff who had worked hard to achieve Your Goal. Your Vision.Thanks for helping me build up the business, you don’t have to come in tomorrow.
Ceasing operation or calling it quits is not a simple decision based on a number.
This situation is compounded by the nature of the entreprenuer themselves. An entreprenuer is driven. Is thirsty for knowledge. An entreprenuer will have read about other entrepprenuers success stories. How they
faced adversity and became the success that they are today. How they were sleeping in their cars and eating at soup kitchens at one stage before making it big. An entreprenuer is infused with the “Can Do” spirit.
Most of the time, an entreprenuer would be swayed by the story of other entreprenuers, the can do attitude, the belief that if they think it they will achieve it…and so…go on with the business and contiinue to lose
money. To the extent that they may start dipping into the children’s education fund to meet operational expenses.
Don’t get me wrong. I personally believe in perseverance. If we stop whatever we are doing or whatever we are striving for at the slightest hint of problems, then it will become close to impossible to become a successful businessperson. Remember the story titled “Acres of Diamonds”..what if financial success was just around the corner? We need to persevere because people and the universe want to see how much we want this. We need to persevere because if we succeed it will validate our ideas. We need to persevere because we have not paid back our mum or dad, brother or sister as yet.
But is there no way to really say to oneself, “Hey, you’ve done everything possible already. The business cannot continue to operate. Close it down.”
In my opinion, no matter how many diagrams, charts or words we use to prove to ourselves that the business is no longer viable, the decision to close down a business is an emotional decision.
Ways to counter this would be to find a way to knock logic into the equation or use a counter argument based on emotions.
If the business can no longer pay its operating expenses and you need to borrow it from somewhere, it is time to close. Is increasing debt the best way for you to expand your business?
If the business can no longer pay its operating expenses and your salary, it is time to close. Why spend more time on a venture that can’t pay you what you are worth?
If the business continues to bleed money, it is time to close. A business is measured by its profitibility and profitibility alone.
Emotional counter arguments such as “If you continue to run your loss making business, your kids will not be able to afford college.” or “You can earn a better salary elsewhere and provide more for your family.” might sway the entreprenuer to close the business.
As the operating of a business is cold and emotionless, so must our attitude be towards business.
I would rund thorugh a checklist of the following items before i decide
1) If more of my personal money was put into this struggling business, would i be able to get back that money with interest? If you don’t think so, then don’t invest.
2) Is there anything else i have not tried yet?
3) Am i being paid my worth?
If you answered No to all of the above, then it would be best if you chose to close..
