In the business world, nothing is constant. In one moment, things might look good for your startup, but it can go downhill in the next. Unfortunately, this is a sad reality that many new entrepreneurs have had to face in their journeys. Business startup failure rates stand at 90%, and sometimes the best option is to shut down and let go of your startup. Some factors could inform such a decision, and below are a few. Identify what is not working
Usually, the number one culprit is financing. Whether it is the lack of it or misappropriation of funds, money tends to be the leading cause of many business startups’ failure. However, in other instances, it can be more than that. This is why you are responsible for conducting an internal investigation to determine the cause(s) of your business’ slowdown. Sometimes you will discover that poor leadership, ineffective communication, lousy marketing, among several others, are responsible.
After careful introspection of your operations, you may be in the position to decide whether the business is worth keeping or letting go. It might also be an excellent decision to sell your business online, so keep this in mind. You can hope that the new business owner can turn things around. All this can be possible only when you identify what is not working in your startup.
Determine if it is a slowdown or a failure
As already indicated in the introductory part of this article, businesses experience a dip at some point. It is a natural part of business growth, but the advantages can only be claimed by steering it in the right direction. The difference between an experienced entrepreneur and a novice lies in determining the road ahead. That is, if it is a dip or a dead end. If it is the latter, an astute business owner will take timely steps to let go before running the establishment causes irreparable damage.
In the first quarter of 2020, the ripple effects of the pandemic impacted businesses, education, health, etc. This was a typical example of an external circumstance that brought about slowdowns in the business world. According to CNBC news, 60% of small businesses in America closed down in the same year.
However, by the second quarter of 2021, 40% of these same businesses were acquired by interested parties. Only a tiny number merged with other startups to commence operations again. With this scenario, it is pretty clear why some entrepreneurs let go, and others found an opportune moment to merge.
Persistent justification of bad business
It’s already been established that during the business lifecycle, there are ups and downs. However, it is a signal to let go when you find yourself justifying every bad business move. Often, negative experiences and results are indications to correct the wrong or abort the mission altogether. Indeed, there is no reason to sink with the ship when you have the option to jump out in your lifejacket. If you have a team, it is a good business practice to alert them of the situation. This way, they also have time to move on elsewhere or decide to stay with the business, hoping to turn things around.
Undoubtedly, it makes sense to want to salvage a dying situation. However, if it’s gone far beyond salvaging it, it might be a better business decision to let go than save it. Perhaps, after letting go, you can have more time to put together a new business plan and work it to fruition.
Loss of energy and motivation
How well do you identify with the reason you started the business in the first place? Admittedly, entrepreneurship is not a fun ride, but your daily motivation can be an effective tool that keeps you moving. Unfortunately, when motivation goes out the window, so do your energy levels. Before you know it, your lack of motivation can run the business down. Nothing hurts more than being directly responsible for a business failure.
Therefore, when you begin to feel like the business you built from the ground up no longer gives you the same drive, it may be time to move on. It might be a better business decision to sell it off. That way, you still make money and have enough time to build another business that drives your mojo.
Last but not least, sometimes, letting your startup go may have nothing to do with something you did wrong. Instead, you might have worked so hard that an interested party offers a good deal you just cannot refuse. In a scenario like this, it would help if you considered all the pros and cons before letting it go.