When To Say When

How do you know when to give up in business? That answer is easy - never. Never, ever give up in business. But it may be reasonable sometimes to give up on a certain business idea. So, how do you know when this is a wise thing to do?

Well, when things are consistently moving backwards, not forward - this is a strong indicator that it may be time to pull the plug. Remember that its normal to lose money in the beginning, and perhaps feel like you are wasting time. But with a successful business, you should eventually start to lose less and less money as time goes on.

The key is to be honest with yourself, and honest with the situation. For instance, lets say you invested $1,000 into a business idea. You find that as time goes on, you have to keep investing $1,000 a month to keep things afloat. Over a 12-month period, not only have you not made any profit - but you feel that you need to start investing $1,500 a month. This, obviously, is a business idea that needs to get axed.

On the contrary, lets use the same scenario and say that you were seeing an increasing return on your investment each month. January - $100, February - $200, March - $300, etc. Well, this may be a idea to hold on to because by October you're going to break even and by November you'll be profitable. Even if your expenses went up, the pattern shows that you are closing the gap - and that is exactly what you want.

Never give up on an idea that is showing all the signs of eventually becoming profitable. Always remember that it is normal and common for it to take months or years to reach profitability.

There are no hard rules, however. Use your discernment and learn to develop entrepreneurial instincts. A true entrepreneur, although patient, is not stubborn - but instead, knows when to say when. If you find that you did make a stubborn mistake, don't become a repeat offender.