When to Cut Your Losses

I met with a friend over the weekend who just had her second little kid. She also happens to be an entrepreneur who bought a business a couple years ago and has been limping along trying to keep it afloat. Having two small kids is hard, and then add to it all the sweat equity that a small business requires . . . phew! She was wondering about whether going the non-profit route would be a good option. 

I don't think I've shared much of my non-profit philosophy on this blog yet, but I am not a huge proponent of going non-profit. My friend shared some of my views. For one, you are reliant on the grants coming in. So you're spending all this time working on grant applications (most of which you don't receive) and then you actually have to DO the program and then you have to continuously follow up. Another thing is that you are at the whim of your board and responsible for documenting every decision and purchase with justifications. Some of this should be done in a for-profit model as well, but in a non-profit, the liability is much bigger if something goes "wrong."

After discussing this and deciding it would be best to stay a for-profit (which was her initial inclination), she confessed that earlier this year she had said her partner that maybe they should just let the venture die. 

In moments when you don't feel like you have one last drop of inspiration, let alone energy, to put into your business (or your training or project), remember that life is full of ebbs and flows. Creativity comes in bursts, not a steady stream. There are also times in life when you are saving and stockpiling money and other times when you're digging into those reserves. If you are at a point where it feels like you're using up the valuable stores that you need, step back and look at the big picture. 

"I don't think you should give up on the business just yet," I told my friend. "You have invested so much time and money and the business is not growing right now because your energy is needed elsewhere (the new baby)." This business makes sense in the line of my friends work and passions and she's feeling drained because it's one of those ebb times for her, but big picture, this business still makes sense. If you happen to be asking yourself the same question right now, take a step back (or even better yet ask a friend to help you) and examine the big picture.