Flagging business: When it is time to cut your losses

Kenny Rogers, the darling of many a country lover, in his song The Gambler sang: “You’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away and know when to run.”

While his advice was directed at gamblers, it also holds true for business persons.

This is because sometimes businesses fail, and it takes courage to walk away from an enterprise that is no longer viable.

Here are some indicators that it could be time to sing the dirge for that faltering business.

1.  You have lost energy and motivation

Nothing is worth spending time on if it is emotionally draining and the enthusiasm is no longer there. An entrepreneur starts a venture with the aim of solving a problem and making profits.

The promise of regular income and success are the key motivators for putting in the long hours even when things do not go their way. But when this drive is gone, an entrepreneur can no longer put in the same effort. This is the beginning of the end. At this point, it is advisable to move on before the inevitable happens.

2.  You have tried different solutions, but it is still not working

In street lingo, “imekataa” (it’s not working). This is where one starts a business at which everyone else seems to be thriving, but for some reason, you keep on hitting the dead end. It can get tedious if you keep on failing. And while patience is key in getting it right, constant failure can break the spirit of even the most patient of entrepreneurs. 

3.  You are constantly running into losses

Why did you go into business? Charity? Fat chance! Many companies are wound up because they fail to be profitable. It should be no different for your business. You have invested your time, capital and emotions into your business, and you need a reward for it. Every factor of production should be rewarded; it is the reward that keeps one motivated and willing to continue facilitating production.

If you are making losses constantly, it is probably time to call it quits and find something else to invest your time, money and your skills into. 

4. There is no growth

You do not want your business to stagnate. You want your customer base and product offering to grow. You want to move into a bigger space, have a better market understanding, travel more and expand your social network. If your business does not seem to offer you any of these things, then walk away from it. A stagnant business should be avoided like the plague. 

5. There is a newer, sophisticated way of doing it, but you cannot afford it

Say you own a handcart for ferrying people and goods and then there is an explosion of motorbikes, which are more efficient. This is likely to put you out of business. As the new technology catches on, your market share is bound to shrink. You are left with no choice but to upgrade or be phased out.  

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