How To Know When It's Time To Close Your Business

Article Summary

In this article, Amanda McKinney and Erika Lucas discuss the topic of knowing when to shut down a business. They emphasize the importance of listening to customers and being receptive to their feedback and also checking in with yourself to ensure the business is still connected to your values. They also discuss failure, adaptability and getting support from other entrepreneurs. The combination of understanding data (revenue, product-market fit, etc.) as well as your capacity and willingness to continue are the keys to understanding if it's time to shut your business down or address burnout. Throughout this conversation they both share personal examples and highlight that all entrepreneurs have moments of doubt so you're not alone if you're feeling this way.

Takeaways

Listen to your customers and be receptive to their feedback.
Failure is a natural part of the entrepreneurial journey and should not be attached to personal identity.
Adaptability is crucial for success in entrepreneurship.
Self-evaluation is important to determine if your business is still aligned with your values and goals.
Seek support and guidance from other entrepreneurs who have experienced similar challenges.

**This was also a podcast episode (episode #230). If you'd like to listen to this conversation, use the link below.

Listen To The Podcast

Ep 229 - 5 Mistakes To Look Out For As A New Entrepreneur (Erika Lucas)

"In entrepreneurship, we often talk about when things are rosy but we don't talk about when things aren't going well." - Erika Lucas

"I think entrepreneurs feel very lonely and like they are the only ones going through that and don't talk to anybody, so then they get more isolated and instead of troubleshooting, they get more in their head." - Erika Lucas

Listen To Your Customer Before Closing Your Business

"Sometimes we have to be patient, keep going, or pivot and do the things we have to do to make our business solutions work by listening to the customer." - Erika Lucas

"What are the customer's saying. Are you getting enough revenue to validate the idea?" - Erika Lucas

If you're listening to the customer or they aren't coming to you and they aren't buying what you have, there's an issue with your business model and that needs to be adjusted.

Are you brining in revenue? If yes, how much?
Do you have product market fit?
What are customers saying about your product/service?
Is your current business model the best fit?
Am I serving my client/customer in the way they deserve?

How To Know If You Have Product-Market Fit In Your Business

"At the early stages, I don't believe in surveys because they can be very biased. At the early stages, you have to do things that don't scale. You have to do things that feel uncomfortable but in the early stages you're in discovery mode." - Erika Lucas

"We go into these conversations trying to sell our solution but we need to go into the conversation to listen." - Erika Lucas

"You have to be adaptable." - Erika Lucas

Understand the customers pain point and what they've tried before
Don't be stuck on your solution, listen to the person who is struggling with that issue

Image of someone on a video conference call with 4 others

Accepting Failure As Part Of Entrepreneurship

"This is what many entrepreneurs get stuck in - failure doesn't mean that you're a failure." - Erika Lucas

"Failure is part of the process. It's always going to be there if you're trying to improve. So the faster you can accept that, the better of you'll be." - Erika Lucas

"This doesn't mean to remove your emotions from going through the failure, you have to go all in and feel it and it will take time." - Erika Lucas

"This is also where a lot of founders struggle because they think if they shut down (their business), that everyone will think they are a failure." - Erika Lucas

What can I learn and apply to the next business or project?
Ensure that you're not attaching your personal identity to your business performance.

Listen To Yourself Before Closing Your Business

"There's another component and that's burnout. When you're no longer passionate and the work you're doing isn't fulfilling and in addition to that, you're not bringing in enough revenue to care for yourself, your employees if you have them and to make things work." - Erika Lucas

"Make space for yourself." - Erika Lucas

"Burnout is not infinite. There are ways to mitigate it and take care of yourself." - Erika Lucas

"It's important to listen to customer feedback but also check in with yourself and your values and what you want too." - Erika Lucas

Do I see myself doing this in 1 - 5 years at the same pace?
Am I hustling in ways I don't need to?
Do I need to bring in people or systems to streamline?
Am I still enjoying it? Does it still align with my values? Is it additive to my lifestyle that I want to live?
It's critical to remember not to take into account what others think during this process.

Take Away Message / Action

If you're in a place where you're questioning closing your business, go through these questions but also get support as you do this so you don't feel alone.

"Get support. Talk to other entrepreneurs who have been there before." - Erika Lucas

Until next time, give yourself permission to decide what's best for you and grace along the way. I'll talk to you soon.

About Erika:

Erika is the Founder of StitchCrew, an organization providing capital and resources to women and minority entrepreneurs. Erika also founded VEST, an investment fund and peer network for women professionals. In this capacity she invests in women-led companies supporting women, working parents and inclusive employers. She also connects women professionals across industries, regions and career levels. Erika is a LinkedIn Top Voice on Venture Capital, Entrepreneurship and Strategy. She is on the Board of Directors of Arvest, the Diversion Hub, and the Oklahoma City County Health Department as well as a member of the Latino Corporate Directors Association, Familia VC and LatinxVC. Prior to StitchCrew and VEST, Erika was a Partner at a Private Equity Firm and Global Director at the Oklahoma Department of Commerce.