Knowing When to Walk Away From a Business

We all have different reasons for wanting to make an extra grand a month.  Whether you want to make more money to pay for your kids’ college or to save for your own retirement or to pay off debt, it is important to recognize that your first idea for making a grand per month may not work out, and that is okay.  Recognizing when to walk away from a business venture is important.

Five years ago, I had the bright idea (read the sarcasm here) to open an eBay store and sell designer kids’ clothes.  This was before the 2008 economic downturn, and several eBay sellers were making a full-time income selling kids’ clothes.  Several of these sellers sold manuals explaining how to sell on eBay, and all of them said to build up inventory slowly and to avoid debt.  I adhered to this advice—at first.  Then I became convinced the only way I would make money was to have a lot of inventory, so I bought too much and went into debt.  Long story short, my store never really made money, but I held on for four long years hoping to make a profit.  I closed the store last July and just paid off the last of the residual debt in May, 2012.

Had I walked away from the business after a year or two of not making money, I could have moved on to an endeavor that would make money, and I wouldn’t have had as much business debt.

When I was in the process of closing the eBay store, I started a new side business—freelance writing and virtual assistant work.  In less than a year, I made more money from this business than I ever did from my eBay business, and I didn’t have to go in debt to start the business.  In fact, my freelance business helped me pay off the debt from the eBay business.

Don’t be afraid to close one business if you don’t enjoy it or you don’t make money from it.  If you are not seeing increasing income within 6 months to a year, that may be a sign that you should move on to the next business.  It doesn’t mean you are a failure; it just means the right business is still waiting for you to discover.

Not incurring debt is vital when you are starting a business.  If you don’t have debt from the business, you can easily walk away and start the next venture.

There are plenty of ideas on this site for side businesses that you can start with very little, or no, capital.  Try one of them out for a few months, and if you aren’t increasing your earnings during that time or find the job isn’t for you, don’t be afraid to move on to your next venture.  We have it engrained in our minds that you shouldn’t quit and should persevere.  After all, many famous people failed before their ideas finally made millions.  But often, when you are trying to find a successful gig, giving up and moving on to the next venture may be exactly what you need to do.  It was for me; I just wish I hadn’t waited four years!

This is a post written by Melissa who blogs at Mom’s Plans.