What are some telltale signs that your business is going to fail? I just want to know when I should throw in the towel and call it quits. -- Paul of San Diego, CA
The following answers are provided by the Young Entrepreneur Council. Founded by Scott Gerber, the Y.E.C. is a nonprofit organization that provides young entrepreneurs with access to tools, mentorship, community and educational resources that support each stage of their business’s development and growth. The organization promotes entrepreneurship as a solution to youth unemployment and underemployment. E-mail your questions about best practices for starting up and/or managing a small business to firstname.lastname@example.org.
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No. 1: Loss of passion
From Kris Ruby of Ruby Media Group
When entrepreneurs start businesses, they wrap their identities around the specific niche their business is in. While other people in the work force have more time to experiment with "who they want to be when they grow up," entrepreneurs often feel locked into the sect of the industry their business is in. Don't be afraid to change courses if your passion has changed- allow yourself room to grow.
No. 2: Call it quits when the potential reward is no longer worth the risk
From Elizabeth Saunders of Real Life E®
Knowing when to cut your losses should be considered not only from a professional perspective, but from a personal one. If continuing with your entrepreneurial venture could have serious, lasting repercussions such as costing you your marriage, your relationship with your family or your health, you need to consider whether the potential gain from pushing on is worth the risk of this damage.
No. 3: You're taking the skeptical view of everything
From Eric Bahn of Beat The GMAT
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As a business owner, you should be the most optimistic person among your team. As the leader, you need to believe deeply that against all odds your business will succeed. However, if you start to find that you take the negative view on most of the decisions your team is making, or about future prospects for growth, then you may want to stop. If you don't believe, you will fail.
No. 4: No repeat customers = no new customers
From Benjamin Leis of Sweat EquiTees
I tend to judge the health of a company by its repeat business. If I see that a company doesn't have any repeat or referral business there is a big issue. If you aren't satisfying and creating customer love why be in business at all.
No. 5: Read the signs
From Timothy Sykes of Millionaire Media LLC
I have failed several times and I have noticed it's when: a.) I am spending more time fixing nominal problems, b.) my urgent to-do list keeps growing while I am getting more frustrated every day. and d.) it feels like I am working backwards and there's no light of day ahead. Sometimes in order to move forward you must shift entirely.
No. 6: Is your pride or optimism steering you wrong?
From David Schnurman of Lawline
Sometimes when you make a decision in business and you see it is not going in the right direction, you end up sticking with it either out of pride or hope you can turn it around. As entrepreneurs, by our very nature we are all optimistic, so it is very hard to quit something especially when it's your business. So always take this into account when considering if you should throw in the towel.
No. 7: Are you all in?
From Brenton Gieser of Be Social Change
Ask yourself the simple question: Am I all in? Are you and your team willing to commit everything to make this work? If your team is not aligned under the one strong vision and committed to going all the way to execute that vision, you might as well just fold then and there.
No. 8: Feedback is everything
From Adam Gilbert of My Body Tutor
As important as a "failure is not an option" attitude is, if you're not getting any positive feedback whatsoever, it's time to call it quits. Positive feedback can be a number of different things such as customers telling you how great what you do is, repeat customers, word of mouth, positive press, lots of inquiries, people talking about you online, referrals, etc.
No. 9: Believing that quitting is an option
From Lisa Nicole Bell of Inspired Life Media Group
The most successful entrepreneurs I know are hopelessly devoted to the success of their businesses. Instead of asking "When should I quit?" the question should be "Am I doing everything possible to make my business a success?" Attitude is everything in the success of an entrepreneur. Your business will only be as big as your thinking is!
No. 10: Be careful of demand
From Dan Schawbel of Millennial Branding LLC
One of the most obvious signs that your company is going to fail is that there is no longer demand for it. If what you offer isn't important to your audience anymore, your revenue will start dipping, while your expenses either stay the same or increase. At this point, you need to make a move fast.