Knowing When To Cut Your Losses and Stop Building A New Business

I know it has been a couple months since I posted anything, but I am back. In the two long months since my last posting, I have learned many new lessons and re-learned a few old ones. In the coming posts, I plan to share a lot of what I have learned. You will also see me launch a new business, from the very beginning. But first, let me tell you why you haven’t heard from me for a while.

Simply put, I got myself into a business deal that ended up going against almost all of the criteria I have for my business ventures. I got into a partnership, where my responsibilities far outweighed my ownership stake in the company. Our roles and responsibilities were too vaguely defined from the beginning, and this led to a quick meltdown of the working relationship between me and the main stakeholder. Most importantly though, I allowed myself to sacrifice the flexibility and lifestyle, I have worked so hard to achieve.

The good news is that I have developed the ability to recognize when things are not working. I have a very good idea about when I can turn things around, and when they will only get worse. I needed to get out of this, but I had to be very careful to do it right. Oh, I didn’t mention that one of the partners was a very close friend, and all of the partners (except for me) were lawyers?

I am not a quitter. If I commit to something, I am all in. I will almost always stay in a bad situation longer than I should. Now that I have kids though, I have had to shift my mindset and my priorities when it comes to my businesses. A long time ago I decided that it was more important to me, to spend time with my family than to make as much money as possible. For me, lifestyle often trumps income. Don’t get me wrong, I enjoy a nice lifestyle and make a good income. It is just that I could never be one of those dads who has a very high paying job that keeps him at an office from 8 am to 8pm. There is nothing wrong with it, but it is not for me.

I stayed with this project about a month after I recognized that it was not what I wanted to do. I really tried to make it work. I put all of my other projects on hold (including my consulting business and this blog), and put all of my effort into making the business work. Meanwhile, my relationship with the other main partner was quickly deteriorating, and we would often end up arguing. I was sacrificing too much. I was not happy, and I was not hiding it very well.

Coming to the decision to leave the partnership was not easy. As I said, a very good friend was a stakeholder, and his financial investment was not the only issue. My leaving might put him in an uncomfortable position with his partners. I also wanted to make sure I was not opening myself up to litigation. Also, I still thought the business was a good idea, and I was struggling to figure out where it went from something I was excited about, to something I could no longer do. There were a lot of factors, but I think in the end, it came down to personalities.

I spoke to my friend first, and then to the other partners. I really agonized over how to approach them, and what to say. Of course when I finally made the phone calls, it was not as bad as I feared. None of the conversations were confrontational, and we were able to leave things very amicable. They may even enlist my services as a consultant from time to time.

I have always said that action is exponentially better than inaction. I would rather make a bad decision and correct course, than be caught up in the quicksand of indecision. When you take this approach though, you have to be willing and able to see when you have made a mistake, and willing and able to take the actions necessary to correct it.

You are ultimately responsible for your own success and happiness. Before you start a business, or go into any business deal, you have to give a lot of thought about how you define success. What sort of lifestyle do you want? How much money do you need? Will this business or opportunity help you achieve your goals? If yes, do it! If the answer stops being yes, be prepared to stop doing it.

There was a time when I would have thought of this experience as a waste of months of my time and a lot of money. I do not look at it that way. I learned a lot of things that will make me a better adviser to my clients, and gained knowledge and insight that I will be able to apply to future ventures.

I am re-energized and motivated to put my energy into teaching people how to start and grow their businesses. I am lucky to have found something that fulfills me personally and professionally, and I will be very hesitant to stray from this path again. What I like to do is teach. The wonderful thing about teaching is how much you can learn while you do it.