8 things to consider before you give up on your business idea

Step back to reflect

How do you know when it’s time to give up on a business idea? Many entrepreneurs try not to address this question head on.

They may keep forging ahead with their business, even if stress starts to take its toll and it starts to feel as though good things do not necessarily come to those who hustle.

However, there are certain considerations anyone should reflect on before they decide to completely give up on a business idea.

8 things to consider before you give up on a business idea

Before you decide to throw in the proverbial towel and give up on your business idea, ask yourself:

  1. Is there a demand for your product?
  2. Does your business have a core group of fans?
  3. Have you talked to your mentor?
  4. Have you already made substantial progress?
  5. Are you able to financially continue?
  6. Do your partners know how you feel?
  7. Will you need to dissolve the business?
  8. Do you still believe in, and have passion for, the company?

Running a business is hard work, but it should not turn into work that you struggle to get excited about or approach half-heartedly. Before you give up on your business idea, keep the following considerations in mind. This will help you figure out if you should keep going or pivot into another direction.

1. Is there a demand for your product?

Take a moment to revisit your business plan. This plan outlined details about what your product or service does, what allows it to stand out from the competition, and why consumers would invest in this offering. It also includes a section for your market analysis.

Before you give up on your business idea, look at the market analysis which covers who makes up your target audience, the growth of said market and its needs, and how you plan to attract, capture and retain this audience.

This is a two-fold consideration, as you need to step back and consider your business offering and the existing market.

Are people not buying what you’re selling? Perhaps there are ways to tweak your existing offering to meet customer demands. You may survey your existing customer base to get their opinion before you give up on the business idea.

Certain changes, like the price point, might be necessary in order to meet consumer needs.

It’s also possible that competing businesses may have similar offerings. You might need to redefine what differentiates your services from the crowd. Or, you may even consider creating a new offering that can reach another market and satisfy their needs.

Related: How to re-evaluate and update your business plan

2. Does your business have a core group of fans?

To loosely paraphrase a quote from musician Lady Gaga: 100 people can be in a room. Ninety-nine don’t believe in you, but one person does. It’s that one person who, ultimately, changes everything for you.

Small businesses typically need a few more people in the room than one person to believe in them and their offerings. The good news is that all you need to get started is a small, core group of fans.

If you have happy customers, you have cheerleaders.

 

They will return back to you to do business, write positive reviews, and share great word of mouth about your company to countless individuals.

If your small business doesn’t have a customer base like this (or any customers at all), it may be time to give up on that business idea.

However, if you do have this base — regardless of its size — then keep moving forward. The fans that believed in you from day one will continue to be there for your business through its successes and growing pains.

Related: Turning happy customers into customer advocates

3. Have you talked to your mentor?

Give Up On Business Idea Girl On Phone

Many entrepreneurs pride themselves on being able to go it alone with their small business. However, nobody should be without a support network. These are the individuals that encourage you to keep going and never give up.

One individual you may need to consult is your mentor .

A mentee/mentor relationship isn’t designated solely to the initial stages of starting a business and receiving advice on what to do and not to do. You should be able to reconnect periodically with your mentor as time progresses.

Tell them what’s going on, all things good and bad. See what they advise doing next, and take notes as you go.

Beyond your mentor, you may also want to seek out feedback from trusted, successful entrepreneurial friends. They know what it’s like to doubt yourself when the chips are down, and may be able to help you avoid giving up on your business idea.

Related: Finding a mentor — Where to look and what to look for

4. Have you already made substantial progress?

How much do you want to quit your business when you’re riding high on a success wave? I’m willing to bet that your answer is “No way!” That’s a completely natural response. It’s rare to encounter an entrepreneur that would say, “I’m ready to give up on my business idea!” after hitting a revenue goal, establishing a great partnership, or receiving incredible press.

Think back to all the times your venture made substantial progress.

 

You might revisit your business plan and check in on the goals you had placed for the next three to five years. How are you progressing along in meeting these goals? If you’ve already met some, great! Make a note of that. If you’re still working towards certain goals, examine where you’re at and what needs to be done next to stay on track.

If you don’t already have one, create a media kit.

This highlights what your business does, its services and offerings, and notable statistics. Some of these stats may include more information about:

  • How many followers you have on social media platforms
  • Your website traffic and visitors
  • Established relationships or partnerships you have with brands
  • Media outlets where you have been featured

For all the moments where you feel as though business is not taking off as quickly as you’d like it to, look back at the areas you have made progress. You’ll feel proud about how far you’ve come since your early days in business!

Related: What is a media kit?

5. Are you able to financially continue?

Answering this question requires brutal honesty.

You may have a business idea that you’re extremely passionate about and have spent a substantial amount of time working on it. However, you must also face the financial reality of your situation.

Are your products or services not selling? Are you running out of savings and taking out loans just to make ends meet? If your business keeps accumulating debt and running ROI negative every month, you might make the decision to quietly close its doors because it’s not sustainable.

6. Do your partners, or co-founders, know how you feel?

Do you have partners or co-founders? If you incorporated your business as a general partnership, then you cannot decide to give up on a business idea on your own. Partnerships are agreements between two individuals. As partners, you split costs, share profits, and make decisions together as a team.

Most partnerships tend to be built on the common foundation that both partners — or co-founders — are passionate about the business.

Your partner might be surprised to hear how you’re feeling about the business. However, they may also be able to remind you why you both got into business together and get you excited about the company all over again.

What if that’s not the case?

If this happens, you may consider a voluntary withdrawal from the partnership. This clause is typically outlined in a written partnership agreement. Certain terms will be outlined that detail what happens once a partner exits the business and if a new partner may be admitted in their place.

7. Will you need to dissolve the business?

Give Up On Business Idea Closed Sign

Let’s say you didn’t incorporate as a partnership and you’re ready to give up on a business idea.

You’re running the company on your own as an entity like a limited liability company (LLC). If you truly don’t see a future for the startup or your business idea, you will need to file for a dissolution.

What’s a dissolution?

When a business files for a dissolution, they are telling their state of incorporation that they are no longer active and have formerly closed. Doing this alerts the state not to charge your business with any annual state fees or taxes because it has been dissolved.

Filing for a voluntary dissolution is a fairly straightforward process.

First, you will need to file articles of dissolution. These documents include information about your business name, the date of its dissolution, and reason for dissolution. If you have incorporated as an LLC, keep in mind that your managing members must have all agreed on the dissolution. This is also true for corporations, which need their board of directors to vote on the dissolution and agree to it.

Once you have filed the articles of dissolution, you need to make a formal announcement in a dissolution proposal. This is particularly true of corporations that have dissolved, as the dissolution proposal will be part of public record.

Corporations must also file Form 966 Corporate Dissolution or Liquidation with the IRS. This document must be filed within 30 days of filing articles of dissolution.

Finally, any business assets must be distributed to the owners depending on the percentage of the company they own. If anything is owed to creditors, they must be paid back first. Then, owners may receive the remaining assets.

8. Are you still passionate about the company?

There’s usually a telltale sign of unhappiness that slowly begins to creep up when you’re no longer passionate about your passion project. While this is not a scientific list, some of the warning signs include the following:

  • Your heart’s no longer in it. More often than not, you feel as though you’re going through the motions.
  • Challenges are challenging, not exciting. You dread the idea of trying to jump over more hurdles because the hurdles get more and more difficult with every turn.
  • Thinking about your business, and everything you’re working on, leaves you feeling drained instead of pumped.
  • The stress of running the business is beginning to seep into your personal life. Or, you feel as though the lines are rapidly blurring between your personal and professional life.
  • You often find yourself thinking about other entrepreneurial ventures you could pursue, and are distracted by the idea of going into business in a new field.

For some entrepreneurs, all it takes is knowing that the passion is gone — and not likely to return — to close up shop entirely. However, there are still a few ways you can rekindle your passion and salvage the business.

  • Revisit your mission statement. Do you still believe in the mission of your business? Has it changed since then? You may edit the statement to reflect new values, or rediscover old ones that were the reason for getting in business.
  • Figure out your Plan B. If you give up on your business idea, what will you do next? Will you take a traditional 9-to-5 job, or decide to pursue graduate studies?
  • Do you need a break? Sometimes, our fatigue is the fault of constantly being “on” with the business and not pausing for breaks. Going on a vacation or taking a long weekend away may help you rest up and recharge to return back to being in business.
  • Are you practicing the power of positive thinking? It’s easy to fall into the negativity trap and believe everything you are doing is wrong and you are doomed to fail. Readjusting your mindset, little by little, to think positive thoughts may be the key to reclaiming your passion for being an entrepreneur all over again.

Remember that if this specific business does not work out, this does not mean the end of being an entrepreneur. You can always start another company, or pursue a side hustle that inspires you.

You may even move your full-time small business into part-time work while you work a full-time job. This allows you to keep making a salary to support yourself, but also keep at it with your dream job and find the clarity you need to reconnect with it all over again.

The above content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

Image by: Yasuo Takeuchi on Unsplash

Deborah Sweeney
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.