For Start-ups in Southeast Asia: When is it Time to Quit or Time to Pivot?
Being stubborn that your venture is going to work is very important to the entrepreneurial journey, but there’s a difference between being stubborn and going down with the ship.
PHOTO CREDIT: Getty Images
If your company isn't experiencing the results you desire, how do you know when it's time to pivot, when it's time to quit and when it's time to double down?
Here are a few clues:
1 - You Have Been At It for Less Than 6 Months
My experience, and conversations with other entrepreneurs, shows that a 6 to 9 month window is required to see if a new initiative or venture will bear fruit.
This means you must have the wherewithal - and the resources - to make it at least this length of time.
Even at the 6 to 9 month mark, it is unlikely your business will cover all (or many) of your expenses. A good rule of thumb is to have at least 12 months of cash available to cover 100% of your personal expenses.
2 - You Haven't Been 100% Committed
I have been renovating my basement for the past 9 months. Is this because it takes 9 months to renovate a basement? No. It's because I haven't been 100% committed to the project. Work, travel and other obligations have taken precedence.
If you aren't 100% committed to your business - if it's just a sidehustle - you need to extend the time horizon before you decide it's not a success. There are many businesses that will never be a success until you are fully committed.
3 - You Have Paying Customers
The definition of a business? One with paying customers. If your customers are willing to pay you, then you have potential. If you aren't making the sales you had hoped, or the size of the sale is less than you expected, it may be that your focus is too narrow.
Anfernee Chansamooth learned this lesson in his own business.
He originally established Simple Creative Marketing so his clients could outsource the creation of content. With tepid sales, he took time to really listen to what his customers needed and realized they struggle creating their overall marketing strategy. By focusing on this larger problem, Anerfee grew his project size and found a way to effectively utilize his content creation services.
4 - You Aren't Having Fun
Creating a business is a huge undertaking. It will consume the majority of your life for a good part of 3 years or 1,000 days (if you still feel overwhelmed after this timeframe, it's time to ask for help - you are doing something wrong).
Yes, there will be rough spots, but in general, you must enjoy the process. If you find that you are too stressed out, too overwhelmed or in general unhappy, then it is time to get out.
Entrepreneurship and small business ownership isn't for everyone, and that's okay. Life is way too short to do something that makes you miserable.
5 - You Haven't Defined Your Exit
The decision to stop, invest more or make a pivot must be based on what your overall goal is for your business.
If you want to sell your business, are you building value (customers, recurring revenue, product) that can be sold?
If you are building a lifestyle business, are you making more money than you would working for someone else? And what kind of lifestyle is your business affording you?
If you plan to transfer the business to someone else (family for example), do you have the right processes and procedures in place for that to happen?
Very few entrepreneurs can answer this most important of questions. It is the one I ask first when advising a company owner on what they should (or should not) do next.
It is important to be committed to your business, but it is as important to properly way the decision to stop, to make a deeper investment or change direction.