When to Decide Not to Pursue a Business
Someone posed a question at Yahoo Answers as to why some people invest money in a business and then quit before they've even started. Why indeed, considering that they already plunked down money for the business?
I ventured 10 possible reasons:
- They realized a little late that they are not cut out for entrepreneurship; that they are better off working as salaried employee or find other means to earn income other than starting a business
- They started to have doubts about their capabilities to run a business and their cold feet made them turn away from entrepreneurship
- They realized that their business is a losing proposition so they decided to cut their losses now than waste resources more down the line
- They underestimated the capital requirements of their business and realized that they do not have sufficient resources to successfully start, grow and manage the business - and that they don't know or can't get additional funds
- They failed to plan out how the family would be affected by the business; or members of their family objected to the business
- They simply lost interest in the business; and some other interest captured their attention
- They faile to foresee that starting a business means work, LOTS of work, and they decided that they don't want all these responsibilities
- They fear that they may run afoul of the law and don't want to risk it (e.g. zoning, regulatory problems, etc.)
- They really don't know what to do or how to proceed next; and they cannot find someone to mentor or guide them
- Partners or other investors involved pulled out of the business; and these partners either have the knowledge, skills and resources to push the business to success
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posted by PowerHomeBiz.com @ 9:07 PM 1 comments links to this post
1 Comments:
Nice list, but it leaves out the two most important reasons as to why people quit and they are also the number one and two reasons why people in business close the doors after they start.
As a consultant in customer service and customer experience management I often end up rescuing people from the jaws of bankruptcy and some times they have no clue how close they really are.
The number one reason for not opening doors or for closing them is the lack of information. This includes market analysis, SWAT analysis, competitive analysis, product or service analysis, management analysis etc. This actually all comes under the heading of a business plan. The big problem is people fail to plan for success. Most business have no business plans and the ones they do are usually for the VC and not for running their business on a daily bassis.
The second reason in both categories is being under funded. Living on a shoestring maybe ok when working for someone else, but when you are trying to run a business that way is like putting the hang mans nose around your neck. This usually results in the slow and agonizing strangling of a business. Some times the funding is there in the beginning but dries up or a partner pulls out.
Lack of needed resources other than money is number three on the big all time.
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