[Guest post by Jim Wang – formerly of Bargaineering.com before he sold it for $3+ MIL!]
Starting something new is always exciting. I only recently started Microblogger and all of the excitement I had when starting Bargaineering came rushing back to the forefront. I was learning a new niche, reaching out to new people, making new friends (maybe a few enemies), but it’s been fun.
You can find a million articles about how to start a side hustle or business, but very few about when it’s time to shut it down. People like to remain positive and shuttering a business is anything but.
Years ago, I helped start a small advertising company that had an innovative way of leveraging retargeting. We signed up publishers, we reached out to potential clients, and we actually sold some business. Even today, years after we shut down the business, I still think it’s a great idea and I don’t know anyone who is doing it. At the time, retargeting was still very new and so we had the challenge of not only selling the idea of it but also ourselves and our innovative strategy. It was too many sells, other opportunities looked better, and we moved on (a gentle euphemism for “we shut it down.”)
Not every passion turned side hustle will be a roaring success. But shutting it down isn’t necessarily a bad thing.
How do you know when to shut things down?
It is the hardest decision a hustler can make because it runs counter to our very nature. If things aren’t going well, we respond by pushing ourselves. You can always work harder. If there is an obstacle, we try to go up, around, or through it. We aren’t trained to quit. We’re trained to work harder than the next person and persevere.
Quitting is for quitters!
Quitting is also sometimes necessary and there is no easy answer as to when you should. It’s often said that we make decisions based on emotion and then look for facts to back them up. I believe, in the end, whether you should shut down is a gut feeling. You will know, deep down, that fighting another day and grinding another week just won’t cut it. If you’re feeling those emotions, or think you might be, let’s try to find some facts to back it up. Let’s try to determine whether you’re just passing through a rough patch or if it’s time to to shut the doors.
How well did you test this idea before executing?
Did you make your first sale? How about your second? A problem many entrepreneurs run into is that they fall in love with their idea and they don’t test it enough. They don’t try to locate their market and ask their potential customers what they want. You’re essentially building a prototype business to see if it’ll fly. If it does, you can build it for real. If it doesn’t, you can toss it and move on without having invested too much money, time, and energy.
If you haven’t been able to sell enough of your product or service, does a market even exist for it? It’s as simple going out onto the street and walking up to complete strangers to ask for the sale. If you can’t or are unwilling to do so, maybe the business isn’t meant to be. For our retargeting business, the market was still very young and while it exists today, it didn’t really exist back then.
Has your life situation changed?
J shared with me the story of why he shut down Love Drop. What he was doing was fantastic and while it wasn’t a for profit business, he would’ve continued running it had his life situation not changed. He discovered he would become a father and he wouldn’t be able to travel as much, which was core to Love Drop. Rather than put stress on himself and his family by continuing – he made the difficult decision to shut things down.
Do you still believe in the business?
This is arguably the most important reason because if you don’t believe in it, no one will. The tricky part about this is that your faith will be tested often. You will have bad days but do the bad days shake your foundations?
I find it’s extremely valuable to step away from the business for a few days, clear your head, and try to re-assess when you’re not emotionally drained. Employees do this every week, entrepreneurs and hustlers tend to push through weekends as if they don’t exist. If you can’t get away or if a few days is not enough, I suggest asking someone else for their opinion.
Consult a mentor.
Every entrepreneur should have mentors they look up to, whether it’s peers in their industry or just trusted advisers from their personal lives. You need someone you can confide in who can give you an honest assessment of your business. If nothing else, being able to speak with someone about your struggles can have a therapeutic effect.
Also consider finding a mastermind group that you can join, or start, to have that support structure in place. Talk to them about your concerns for the business and whether it might be time to shut things down. They’ll be objective in their assessment and they might even have advice for how to proceed.
I joked in the beginning that quitting is for quitters, but I don’t believe that. Our lives are a string of successes and failures – it’s our responses to either that define who we are. If you choose to shut something down, it’s not the end of your entrepreneurial career. It’s merely a bump in the road and one that, hopefully, you will have learned from.
The lessons you learn in a failure will prove invaluable in the next venture. Bargaineering started as a site that curated bargains, it ended up as a personal finance blog. It was a failure before it was a success.
It’s never easy to pull the plug on a business and one that shouldn’t be taken to lightly. Hopefully, with these suggestions, you can make the right decision with confidence.
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Jim Wang is the founder of Bargaineering, a personal finance blog that was acquired in 2010. He now works with bloggers at Microblogger.com, where he shares his lessons learned from the successes and failures he’s had over the years. He can also be reached on Twitter, Facebook, and Google+ – reach out and say hello!
EDITOR’S NOTE: Do you know what else quitting a side hustle does? It opens up time for you to try out another! Which you’re about to see tomorrow ;)
[Photo by pagetx]
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I think starting out with some goals from the beginning might help keep any business in perspective. I’ll give this business 6 month to achieve X% of sale, etc if they are not reached you should reevaluate. This way its just not open ended.
Milestones are great for monitoring your performance but setting them properly can often be a challenge. As long as you don’t expect it to be a “make it or break it” type of milestone (if I don’t get $5,000/mo in sales within 6 months or I quit!), you’re safe.
Yeah, it’s def. hard to gauge ANYTHING until it’s out in the real world, but I agree you need some sort of check points to make sure things are as sexy as you’re thinking they are in your head (at least, that’s what I need a lot ;)). Luckily I can gauge “success” or not with how excited/passionate I still am w/ the project. As soon as I lose that – no matter what the numbers/goals look like – it’s usually downhill from there. I’m too damn emotional.
J – Thanks for the opportunity!
Great tips! I am just starting out side hustling and these are good suggestions to keep in mind as I get going and to remember to stay nimble.
Thank you Kelly!
It is indeed really difficult to quit, especially if you are still confident that it’s going to work eventually. I guess that the best way to deal with this is to set a goal: quit in 3 months, 1 year or whatever if you don’t get to your #1 objective. Because as J Money said, quitting sometimes opens up the opportunity to start something better!
Setting goals that way can be tough because what if your business is going take off in 4 months when you set your target at 3? It’s hard to set goals based on time, it’s better to set them based on accomplishments so you have a better sense of trajectory. 500 subscribers by 3 months is better than quit if it’s not doing well.
Yeah, I’ve learned after shutting down like 6 projects in the past 2 years that there is ALWAYS, ALWAYS, another one around the corner. One you’ll usually just as excited about as the previous one, so if it’s not working out after the given period, you can move right on to the next. Although, 2 caveats here – 1) if you’re not an idea person, then you may not have one lined up and need to partner up with someone who is, and 2) it’s REALLY easy to jump ship and get into a new one without giving it enough time. And only you can figure out what “enough” is unfortunately – no rules out there :(
Rules work until you try them in real life. :)
Great post! There are definitely times when quitting a side hustle is needed, and it doesn’t make someone a horrible person.
Nope, quitting just opens up the next opportunity!
Good post Jim! I think that, to a certain extent, this really calls for you to be real with yourself and honest about where your business/side gig is going. Of course, that can be easier said than done many times. But, I do think that failures can be invaluable teaching tools as you said.
Thanks John! It’s hard to be honest with yourself but unless you do, you might be spinning your wheels for a looooong time.
Hey Jim! I like your point about taking a breather and recharging a bit before making a decision to quit. Long hours can be draining and sometimes you just need to step back a bit to make an objective decision. Also like your idea of a mastermind group to get other opinions as well as motivation. That’s something I need to look into.
Hi Mike! Mastermind groups, mentors, or just a friend – talking to an objective third party can’t hurt.
Great article and perfect timing for me. I’ve been trying to get into blogging and finding it tough to stay motivated when there are no readers coming to the sites. I can work harder and make it happen but I’m throwing around the idea of whether it’s worth it or not. At the same time, I have 2 WordPress blogs (with a third setup but on hold) and a tumblr blog so I might have just started too much at once.
I’m really at a point where I need to start pushing all of them, a subset of them, or just call it quits all together to simplify things.
Hi Terry, Thank you for the compliment! It sounds like you might have too much on your plate, why not pick your favorite and focus on that? If things work out, keep going. If they don’t, move onto the next one?
I’ll second that one. I think you also have to ask your self WHY you want to do all of them? Or the new one? Like, what the *point* is at the end of the day? Is it for fun? To help people? To make millions of dollars and quit your day job? It doesn’t really matter *what* your answer is, but usually once you pinpoint it that can help you make decisions faster for the future.
Quitting sucks but plugging away at something you shouldn’t is even worse. I would personally quit a side hustle whenever it was no longer profitable enough to continue.
I agree, it’s just hard to know when you shouldn’t keep plugging along. I think we’re taught to work hard and success will come, so we keep working hard and never quit. It’s hard to be objective and say “hmmm… this isn’t working” and move on.
Another reason to have a good mentor/biz partner. Nate once asked me why I was still doing GiveawaysAreSexy.com when it seemed like it wasn’t growing and my passion had left it (both very true), and I thought to myself, “Huh. I don’t know?” Haha… No one had ever asked me before and it made me stop for a second and reconsider the project. The next month I ended up shutting it down, and no one hardly noticed :)
What an insightful article. So very true that our society celebrates the opening and “starting up” of business but we never hear of the very often tough decision to “throw in the towel” and close a business. I had a retail business for over 10 years and was quite successful…but competition, consumers taste, and other issues effected the bottom line and profitability of the business. After much thought… I realized I no longer had the “fire in the belly”…and no longer looked forward to each and every day. I made the decision to shut it down…a wise decision as it turns out as several folks tried to make it at my location…with no sucess.. I learned much…made a couple of bucks and sought new opportunities that I found exciting and promising. But it was a tough decison none the less….
Thank you jestjack – we do celebrate the start and we also, even if it’s unintentionally, look down on failures or think someone is a failure if their business fails. Sometimes you lose the fire and you have to shut it down, and yes it’s extremely tough (especially after 10 years!) but you feel better about the decision right?
Jim I closed that business down in 1989 and will forever be grateful for the lessons I learned, money I made and friendships I established. To this day I am stopped while doing errands by a past customer or acquaintance to recall the “ol’ days” and be commended for being a good business owner who gave back to the community. MAN that was 24 years ago….I’m a “legend” in my own mind!…LOL…Thanks once again for this insightful article.
I believe in making money. You can talk passions, being epic, and all of that crap as long as you want. Do you make any money? Free is simply not a business model.
You’re right. I think a lot of emotion takes over when people have invested themselves in something. Always important to remember that sunk costs are sunk…
It’s really hard to accept that sunk costs are sunk :)
Life is all about cycles – rarely do we stay in the same thing forever. So quitting is for quitters. Quitting is also for anybody that wants to try something new, or for anybody that wants to pursue something else and succeed at that instead. Great post!
Looking forward to seeing what J meant about tomorrow too…
I think a lot of people focus on the end and not the beginning!
Did you come back and find out?? :) If not, check it out!
RockstarFinance.com
I think a huge point is when your heart is no longer in it, it’s time to let it go. If you don’t have the love and enthusiasm, your end product is going to show. That just becomes a disservice to your customers/readers. Excellent article.
Well, if your heart is no longer in it, nothing else really matters right?
Here’s another reason – When you find out they are lying about the business model: http://www.stoptheamwaytoolscam.wordpress.com
Unless it’s just a passion project, I always set the business goals when I start – monthly, quarterly, annually. Then I revisit to see how I’m performing. If I’m off track, it’s a good time to rethink your strategy and see if there’s a way you can improve it, or if it’s time to pull the plug.
I’m looking forward to selling my first business, one of these days…
Selling is one of the most rewarding things :) Cuz not only does it mean you made something successful, but someone ELSE wants to take it and (hopefully) make it even better! And pay you handsomely for it too, so you can go and build the next thing on the list ;)