You can find a million articles about how to start a side business, but very few about when it's time to shut it down. People like to remain positive and shuttering a business is anything but.
Years ago, I helped start a small advertising company that had an innovative way of leveraging retargeting. We signed up publishers, we reached out to potential clients, and we actually sold some business.
Even today, years after we shut down the business, I still think it's a great idea and I don't know anyone who is doing it. At the time, retargeting was still very new and so we had the challenge of not only selling the idea of it but also ourselves and our innovative strategy. It was too many sells, other opportunities looked better, and we moved on (a gentle euphemism for "we shut it down").
Not every passion turned side hustle will be a roaring success. But shutting it down isn't necessarily a bad thing.
How Do You Know When To Shut Things Down?
It is the hardest decision a hustler can make because it runs counter to our very nature. If things aren't going well, we respond by pushing ourselves. You can always work harder. If there is an obstacle, we try to go up, around, or through it. We aren't trained to quit. We're trained to work harder than the next person and persevere. Quitting is for quitters!
Quitting is also sometimes necessary and there is no easy answer as to when you should. It's often said that we make decisions based on emotion and then look for facts to back them up. I believe, in the end, whether you should shut down is a gut feeling. You will know, deep down, that fighting another day and grinding another week just won't cut it. If you're feeling those emotions, or think you might be, let's try to find some facts to back it up. Let's try to determine whether you're just passing through a rough patch or if it's time to to shut the doors.
How Well Did You Test This Idea Before Executing?
Did you make your first sale? How about your second? A problem many entrepreneurs run into is that they fall in love with their idea and they don't test it enough. They don't try to locate their market and ask their potential customers what they want. You're essentially building a prototype business to see if it will fly. If it does, you can build it for real. If it doesn't, you can toss it and move on without having invested too much money, time, and energy.
If you haven't been able to sell enough of your product or service, does a market even exist for it? It's as simple going out onto the street and walking up to complete strangers to ask for the sale. If you can't or are unwilling to do so, maybe the business isn't meant to be. For our retargeting business, the market was still very young and while it exists today, it didn't really exist back then.
Has Your Life Situation Changed?
[My friend] J shared with me the story of why he shut down Love Drop. What he was doing was fantastic and while it wasn't a for profit business, he would've continued running it had his life situation not changed. He discovered he would become a father and he wouldn't be able to travel as much, which was core to Love Drop. Rather than put stress on himself and his family by continuing, he made the difficult decision to shut things down.
Do You Still Believe In The Business?
This is arguably the most important reason because if you don't believe in it, no one will. The tricky part about this is that your faith will be tested often. You will have bad days but do the bad days shake your foundations?
I find it's extremely valuable to step away from the business for a few days, clear your head, and try to re-assess when you're not emotionally drained. Employees do this every week, entrepreneurs and hustlers tend to push through weekends as if they don't exist. If you can't get away or if a few days is not enough, I suggest asking someone else for their opinion.
Consult A Mentor
Every entrepreneur should have mentors they look up to, whether it's peers in their industry or just trusted advisers from their personal lives. You need someone you can confide in who can give you an honest assessment of your business. If nothing else, being able to speak with someone about your struggles can have a therapeutic effect.
Also consider finding a mastermind group that you can join, or start, to have that support structure in place. Talk to them about your concerns for the business and whether it might be time to shut things down. They'll be objective in their assessment and they might even have advice for how to proceed.
I joked in the beginning that quitting is for quitters, but I don't believe that. Our lives are a string of successes and failures — it's our responses to either that define who we are. If you choose to shut something down, it's not the end of your entrepreneurial career. It's merely a bump in the road and one that, hopefully, you will have learned from. The lessons you learn in a failure will prove invaluable in the next venture. Bargaineering started as a site that curated bargains, it ended up as a personal finance blog. It was a failure before it was a success.
It's never easy to pull the plug on a business and one that shouldn't be taken to lightly. Hopefully, with these suggestions, you can make the right decision with confidence.
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Jim Wang got his start as an internet entrepreneur when he founded Bargaineering.com, a personal finance blog acquired for seven-figures, and now focuses on Microblogger.com, where he teaches readers how to start their own businesses on the internet. Over the years, he's started, and ended, numerous businesses and has learned more from his failures than he has from his successes. Follow him on Twitter @wangarific.