Sometimes the old clichés are valid and it’s time to cut your losses, throw in the towel, pull the plug and call it quits.
This may sound negative but it’s actually a positive concept because the goal in business is to constantly improve.
Determining when it’s time to end something that was once an important part of the company can also be one of the toughest things in business. The “something” could be a business venture, an employee you once valued, a vendor relationship, a partnership that hasn’t gone so well or a product that simply isn’t selling.
Sizable investments of both time and money have usually been made in these situations and if we walk away, we’ll most likely lose those investments. Calling it quits also has an emotional impact, ranging from great relief to a feeling that we’ve failed somehow or wasted our time. But it’s sometimes essential and healthy to walk away from a business situation.
These decisions can be very difficult to make because we don’t have all the answers and can’t predict the future. And they bring to mind a lot of “if only’s” — things like, if only I invest a little more money, or if only I put in more time, or if only I do things differently, it might work. Walking away from something in business generally falls into the category of never really having enough information to make the decision. When facing these dilemmas, it’s helpful to look at various factors to help you decide what to do.
A big factor is money. Will keeping the “something” require an additional outlay of capital? Do you have the money, and will it be worth it? Sometimes it’s better to accept that you’re going to have a loss on that particular thing and move on.
Could hanging on to the “something” harm or jeopardize your business? Let’s say you have two divisions and one is profitable while the other is a continual financial drain. An unprofitable division could pull the entire company down so it might be best to cut your losses and close the division.
Another area to look at is why you want to hang on. Does the situation truly represent a viable opportunity to create value in the company or are you simply dreading the actual process of letting it go? A good example is an employee whom you like on a personal level but whose work habits are unsatisfactory. It’s unpleasant to fire an employee but it might be what’s best for your company.
Passion for your business is a big factor. If you’ve lost your passion for what you’re doing and it has become burdensome, then maybe it’s time to let it go. If neither you nor anyone else in the company is passionate about trying to achieve what you originally started, then it’s highly unlikely you will achieve it and very likely that you will waste a lot of money trying to do it.
Some business owners hang onto a situation, even though it’s not in their best interest, simply because they don’t want or know how to make hard decisions.
The next time you face one of these scenarios — and eventually you will — try to take an honest look at the situation. If you evaluate the issue, determine what’s causing the problem, and are willing and able to fix it, then you might want to keep that “something” in the company.
But if that person or thing is a drain on the overall business and on you, personally, maybe it’s time to just call it quits.
Laddie and Judy Blaskowski are partners in BusinessTruths Consulting, Inc. and several other businesses, and authored The Step Dynamic: A Powerful Strategy for Successfully Growing Your Business. They can be reached at Judy@BusinessTruths.com.