When quitting means winning
This article is about when to quit a business even if it is not a failure or not making money. You can decide to quit a business venture and sell just because your ROI will be at it's highest. Quitting does not necessary mean stopping what you are doing or taking a new direction. You don't need to quit the whole business, it is healthy to quit parts of it. Shed unprofitable sections and either sell them off or just cut them loose. I call it adapting (in my view anyway).
When do you decide when to quit
Well you don't decide, or should not decide, to quit business when things are really bad. When things get tough it is often very difficult to see and judge objectively what is good and what is bad. In most cases people quite just before the market pics up again. The reason for this is physcological. Everyone has a break point. An emotional break point when you cannot go any further or you are too scared to go further. People that reach this stage have all one thing in common; the never planned ahead. Before you start the business of campaign you should have planned when you will quit. Do enough market research and the trigger points will surface. If you are going to loose too much by quitting at a certain point, don't start.So how do you know when to quit?
It is basically when you have hit a cul-de-sac. When you have exhausted all business opportunities or channels and no matter what you put in there will be no progress or new sales. Basically a dead end. It is a bad place to be, but take what you have and get out! But make sure that you have considered all potential avenues of marketing or business models before quitting otherwise you could miss a golden opportunity. Quite often other people are quitting at the same time as you. That is when the high risk entrepreneurs pounce in and wipe out any potential market share you could have had.If you plan to quit, it is strategy and not a failure.Once you have planned your business exit point or time, it becomes much easier not to quit. Very strange thing to say but it is very true. You are then also less likely to quit at the wrong time, and that is more important than anything else.
Never quit your business when you are at your lowest point, it is just then when things will start to pick up again. Rather plan to quit when you are ahead. It sound counter intuitive, but so true. Just have a look at the Forex markets or investment markets. Investors sell when prices are high, never when they are low. You buy when they are low! Get my drift :)
So when did I decide to quit a business and product line
Just as easy as I enter new adventures, I have no qualms in quitting dead ends. There are two areas where I have quit, one is a business and the other is products or product lines.First lets have a look at when I have quit a business direction completely and why.
Quitting a business
Before the internet became the way one could market a business profitably we used a telephone book called the "Yellow Pages". Well to my surprise they still exist but in a much reduced volume. You had to plan ahead and a rep would contact you each year when it was time to book your advertising space. I did my marketing planning in September with my rep and they published in December/January. Unfortunately for me the company decided to change the bookings to July instead. The problem is that my representative never told me and also never contacted me so in the end I missed the deadline. Just imagine you cannot host your website for a year, what do you think could happen to your business. Luckkelly I just ended a very big contract but it was not enough to pull me through the whole year.That is when I decided to quit. I sold everything and applied for a job at a very big company. It was as easy as that. I was not going to stay on doing what I did at a mediocre level. There was no point in going on, I missed the bus with my marketing tool and that was it.
Quitting a business the second time
The second time I quit was during my job as a representative. The company I was working with had unrealistic targets and the European managers was not willing to lower their expectations. So in essence our division was "under-performing" in their eyes. We all knew that they wanted to close us down. So I kept my eyes open for new opportunities. Luckily for me my wife and I both got sick and tired of corporate toxic stress and bullshit at the same time. We needed to get out. Finally, an opportunity came around at the same time they announced that we all are going to be retrenched. Now instead of waiting for the whole time consuming retrenchment process to drag on and end itself in tears I decided to resign (or quit) before I got paid out.The point is I was not willing to waste my time for a little money to be paid out and lose valuable opportunities in my new business. I got out as quickly as I could and put all my efforts in the new business. That business I am still running with my wife and very successfully too.
Quitting a product line
So that was the two main directions I decided to quit. In my new business we had about 75,000 products we could sell supported by about 80 suppliers. Yeah, that much and we could do more. Anyway, we only had about a maximum of 25,000 listed on our accounting system that we thought was worthwhile. Just imagine, we were only two people managing so many products! After about a year or so into the business we realized that we had to reduce our product range and start to focus. As our business developed our decisions to cull product lines and suppliers were based on the following criteria and we enforced them diligently.- Obsolete products that don't not sell
- Products with little information that we could convey to our customers
- Any supplier that failed to support us with their products got removed. Remember you are only as good as your suppliers, don’t lose credibility due to a supplier.
- Any product that has production problems, bad quality, too much variation in quality
- Products that cannot be shipped via courier
- Too much competition. Competition is healthy but if everyone is doing it your margins shrink. Too much effort for too little money, and I don’t have a lot of time on hand.
- We only buy from suppliers that do not sell directly to the public.
- Any supplier that does not fit into my way of doing business is removed.
- We have to maintain a certain profit margin, if any product is sold on the market below our set point, we get out. It does not help selling the product at a higher rate and losing faith or credibility to customers.
Those are just a few criteria and there are more. But we will not hesitate to remove products or suppliers that do not add value to the way we are doing business.
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