Meet Laura. In this story, Laura has finally quit her nine-to-five job to follow her dream: starting up her own business. She is excited! She can finally choose her own hours and be her own boss. She is working with her passion, and she is determined to make it work. There is only one issue: Right now, her business is losing money. Should she give up and go back to her old job, or should she prevail?
There is no easy answer to this question, but I will tell you this:
When you’re making an investment, there’s no certain outcome. Ever. That said, if you’ve done your homework regarding the viability of your business, you should be able to assess if it’s worth taking the risk to keep going.
Like any business endeavor, you have to back into it from your desired outcome. Do you have the stomach for the time it will take to get to your break-even point? I think that’s an important question to confront.
You need to ask yourself: Can I be comfortable bleeding cash, trusting the vision I have for my product or service? And that my profit calculations will pan out? If the answer is ¨no,¨ then you have to figure out what you can get comfortable with, so you don’t walk around in constant fear of failing.
Just like when you buy stocks, you have to know what kind of investor you are – whether you prefer a more certain gain but with a lower return or if you’re comfortable with a high risk – high return scenario.
Keep it cool
No one said it would be easy starting up your own business, but whatever you do, keep calm! Losing money can stress you out, which in turn will cloud your judgment. You don’t make any drastic or impulsive decisions that can turn a bad situation worse.
Have you done your research? If you would still like to keep your business going, it is time to look at your bookkeeping skills. Unfortunately, if yours is a small business, you likely lack the funds to hire an accountant. However, there are could-based apps you can use. First, look at what luxuries your business can live without. Then, look at what tasks you can do on your own. Finally, if you have employees, it can be a difficult decision to make them redundant. It is something that can never be done lightly or without much thought, so if it’s a road you think you might have to go down, make sure you get some good consultation first.
Read more here:
5 Causes For A Small Business Losing Money (Forbes)