When It’s Time To Get a Divorce

Throwing in the towel could save you money, time, and allow you to move on to new opportunities.

In times of crisis or even after we’ve tried our best, the reality of divorce may seem feasible. It’s not that we don’t love what we have, but instead it’s been proven that things aren’t working out as anticipated. Even as we try to avoid the inevitable, this could unfortunately do more damage as time progresses.

This is particularly true if you’re a business owner, inventor, executive, or subject matter expert. It’s not an anomaly to see operational struggles within a business because of the implementation of a new initiative. Thus, sometimes throwing in the towel on business ideas is warranted, especially when all potential strategies have been tested, resources are exhausted, and the risks outweigh the benefits.

Below are 4 signs that it may be time to let go of an idea or new service/product within your organization:

Downward Slope to Indefinite Debt

Know the difference between indefinite debt and profit decline. When the expenditures of an idea are increasing and/or revenue is diminishing, it’s common to remain optimistic because there may be a practicable tactic to protect the bottom line. Although for iterations where there’s profit decline, which has led to breaking even, loss, and continual operation with no revenue, this can initiate debt. It’s not to say there aren’t ways to adjust your overhead or pin point ways to generate more in sales, but it’s more so of a reason to conduct a financial risk assessment. This analysis will take into account cash flow streams, variance of returns, the prospect of an ideas success or failure, and possible future market statuses. If it’s determined that there’s less than a 25% change to achieve a particular rate of return in order to make a particular idea succeed, walking away from it may actually help to avoid debt.

Inefficient Plans Lead to Ineffective Execution

Planning is the preceding step to implementation in many realms of business. This includes: schedules, budgets, level of effort, risk management, and affiliated procedures. As many ideas are accepted, if they aren’t properly supported, outputs may be ambiguous. Many new investments include a strategy, but as business declines, some operational processes aren’t able to be sustained. It’s quite easy for this to happen when funds have been depleted, risk mitigation is nonexistent, and next steps are unclear. You’ll always have to ask, is driving blind folded worth it, or is it best to stop.

Consumer Responses Are Louder Than Your Sales

Asking your targeted consumers what they think of a product/service is important. Sometimes the business hasn’t marketed the product/service correctly, the price is too high, or competitor offerings seem better. Although, you’d have to know what the customer needs in order to identify if you can render it. There may be low cost approaches for greater return and there are others which aren’t as practicable, but are needed to keep the business afloat.

Wasting Time on Something That’s Already Been Proven

Time is the only resource that a business can never recoup, which is why understanding labor hours is prominent. Even if you’re not paying exempt employees or even yourself for all of the time spent, it doesn’t necessarily mean that it’s not costing you. One common expense is low employee morale, but the biggest is that those same efforts could have been redistributed to a more profitable opportunity. Once it’s made known that something isn’t working, getting a new horse, is better than beating a dead one.

Sometimes tossing in one idea allows us to create a better way to achieve the same objective. Then in other instances, this also provides more time to fine tune what’s already working & dovetail into more research + development for the next product/service.