When to give up on your business idea
Numerous startups always have a good business idea but still fail when there is a lack of clarity and money.
There are a lot of people with a lot of new ideas. Not all of those new ideas are good ones, and many new entrepreneurs find themselves frustrated when they receive negative feedback from investors, or from family and friends. There is often some point where new startups ask, should I just give up on this idea?
This post will review three fundamental questions to ask before deciding to throw in the towel.
Question 1: Is it clear what needs to happen next?
Oftentimes, entrepreneurs think about quitting when they really just need clarity on what to do next. Negative feedback or rejection of financing can leave a black hole in what next steps should be taken. If you just need clarity on where to go from here, then work through your business plan and map out new scenarios. Did your Plan A for financing fall through? That’s okay; start working on your Plan B. Are you feeling roadblocked by negative feedback from others about your idea? That’s okay too; start working on a clearer pitch and re-define your target audience. You may just be pitching to the wrong people, or maybe pitching a concept that just needs to be fine-tuned a bit.
Be careful not to quit an idea in response to not having clarity on next steps.
Question 2: Has the demand been proven?
People with amazing ideas tend to get early feedback about it that drives them forward. When you started down this path, did anyone’s eyes light up when they heard your business concept? Did they think it was interesting and make you feel this was actually a viable option? If so, that is a form of proof of demand. Early commitments to become your customer is an even better proof of demand.
If you decide to quit on this business idea, are you leaving a demand unserved? If so, then someone else will try to meet that demand eventually so you might consider staying the course and capitalize on being the first to market. Otherwise, if you have never received positive thoughts or interest from anyone about your concept, then maybe there isn’t a need for your solution.
Be careful though; many people mistake lack of demand for lack of validation. If you have never truly brought your idea to others, or you have never tried to survey people about whether they may be future customers, then you may just need to make that your next step before you call it quits. Who knows, you may have an idea that is a home run, but you will never know if you don’t share it with others.
Question 3: Is it financially compromising to continue?
Money money money. It’s often the real reason entrepreneurs think about quitting. Funds run out, savings get spent, and if the business isn’t bringing in cash, then startups can get desperate pretty quickly. In these cases, it is important to avoid throwing good money after bad. This means you may need to pause your business idea while you go re-build savings through a temporary job, or pivot away from the business costs for now until things feel more financially stable.
If fear of “losing it all” is on the horizon, then be careful and trust your budget. Without stable cash reserves, you can quickly become financially compromised and join the ranks of 82 percent of startups that fail due to cash flow problems.
A final thought, try to make sure you are making “big picture” decisions about your business. If you recently received negative feedback or just feel stuck right now, take some time and let the situation settle. Avoid making a permanent decision based on a temporary feeling or circumstance. These times of careful decision making are what separate the rock-solid business founders from those who can’t take the pressure.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
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