I recently read an article in Entrepreneur magazine titled, Kevin O’Leary’s 7 Golden Tips for Startups. Tip #4, “Know when to pull the plug,” caught my attention, and I would like to know whether you agree. The tip said:
If you can’t make money after 36 months, and there’s no path to making money, it was a hobby, not a business. You have to take it behind the barn and shoot it.
I thought about this tip through the filter of my own business, which launched three years ago, has total sales north of $200,000, and is still struggling to get traction. No one would have blamed me if I quit after running out of cash the first few times, but I’m a stubborn S.O.B. – I’m a Taurus, what can I say?
Seriously though, I would’ve quit by now, but I can’t. It’s not because I’m too emotionally attached, or have my ego all wrapped up in the outcome of the business. Thankfully, I realized a while ago that what happens with the business has no bearing on what or who I am as a person; this realization allowed me to take a quantum leap forward with my mental health.
Entrepreneurs shouldn’t take their business failure personally because it could lead to depression. Nor should they take their business success personally because it could lead to hubris, which is maybe just as bad as depression-I don’t know.
Why I haven’t quit
The reason I haven’t quit though is because I once read that if you have a great product at a great price, you have a chance to be successful in business. And I have a brilliant product at a very good price, so I believe I should be able to figure this thing out.
So instead of quitting, I’ve taken a full-time job that has a flexible schedule and lets me work from home, and the company owner and employees all know I have my business and they are supportive of me continuing to hustle hard on WeMontage; this gig takes the financial pressure off and has improved my overall mental health. Plus I drive Uber on Saturday nights, which sucks because it doesn’t pay much money and I have to stay out until 4am, then get up and wrestle with three year-old twins, but it helps me get to my monthly income budget number.
So, with respect to Kevin O’Leary’s tip to quit your business after three years if you haven’t figured out how to make money, that doesn’t work for me. I have a few arrows left in my quiver that might help the company get traction with business customers who, by the way, spend $500-$1,000 per order, which is a lot more than the $100 per order my typical consumer spends.
And hell, this month, thanks to students going back to college, I may do $10,000 in sales.
What about you? Have you had to make the presumably hard decision to shut your business down-or not shut it down-after giving it a good go, but not getting enough sales? What did you decide to do, and why?
I’m keen to hear your comments.