We all go into a new business venture with the hope that it will be successful. But any successful entrepreneur will tell you that an important aspect of success is learning to accept and manage failure; there may likely come a time when you have to decide whether to push forward against the obstacles, or when it is time to throw in the towel on a failing enterprise and cut losses so you can move on to your next venture. A good entrepreneur knows how to make this decision effectively.
Someone once said, “If you are going to fail, fail early” and there is truth in this adage. Learning to accept when the time has come to let go can help you identify challenges and work through solutions in the future. There is some merit in learning how to fail, and paradoxically, these experiences groom you for future success as an entrepreneur.
Some straight-forward questions can help you diagnose the success of your company, and inform your decision regarding when to move on. Honest responses to the following five questions can help predict the future potential of your endeavor.
- Does your product or service have proof of concept?
Proof of concept is the positive response garnered in the market from third-party buyers. The product may fill a gap in the market that the consumer recognizes and wants to benefit from. If not, it might be wise to cut your losses early.
- Does your product or service appeal to a broad range of potential buyers?
If you are only able to tap into five percent of your target audience, are you still able to thrive and survive? If this is not the case, it may be time to move on.
- How’s the competition?
If your service or business is something that anyone can do, you could get under-cut or nudged-out by rivals. If your company doesn’t offer something distinctive, or the niche is too easy to replicate, it may not be worth investing any further. On the other hand, if you are offering a product or service that is very novel you should move on to the next question.
- Do you have the resources?
Does your company possess the human and capital resources to make the most of this opportunity? Being an entrepreneur requires motivation, funds, and a network to nurture and support the endeavor when you are just starting out. If you are operating on a shoe-string, consider carefully before making any further investments of your time and money.
- What is your heart telling you to do?
There are times when you may want to trust your gut instincts; are you willing to do whatever it takes to make this company a success? If you answer ‘no’ to this question, then don’t worry about your answers to the previous questions. It may be time to move on.
Be Honest in Your Diagnosis
Winston Churchill once said that “Success is going from one failure to another without loss of enthusiasm.” Successful business people and entrepreneurs don’t give up after one ill-fated endeavor; these are the experiences that foster success next time. A prudent and successful entrepreneur becomes adept at making these tough decisions, experiences failure early, and moves on as quickly as possible. This may involve moving on to the next, more successful project, or, coming up with inventive solutions to work through the difficulties that come with making any business a success.