I’ve heard from several people recently that they’re reevaluating their business. They don’t mean they’re reconsidering how they run their business but whether they should be running a business at all.
It always makes me sad to hear people talk about shutting down their business, but it never comes out of the blue. If you’re asking yourself that question, it’s because your business has become a burden.
Let’s look at the three most common reasons a business becomes a burden, then I’ll share the single most important factor you should consider when deciding if you should try to fix what’s wrong or call it a day.
When most of us think about money, we think in terms of revenue. We think if our business is bringing in money, our business is healthy. There’s a difference, though, between bringing in money and making money. If you bring in $1 million in revenue but you spend $1.1 million and don’t pay yourself anything, your business is not healthy. Your business is bleeding out.
Take a good hard look at your numbers and understand the difference between revenue, profit and paycheck:
- Revenue is the total amount of money your business brings in by selling its goods and services. It’s also called gross sales.
- Profit is your revenue minus expenses. It’s what’s left over after you’ve paid all the bills and paychecks—including your own. It’s also called net income.
- Your Paycheck is the money you actually take home. I know this sounds obvious, but too many of us small business owners don’t actually pay ourselves enough.
If you’re feeling that your business is a burden, it’s because it is causing stress in your life. Don’t underestimate how stressful it can be if you’re dealing with cash flow issues in your personal life because your money is tied up in your business and you’re not paying yourself.
The lesson: Pay yourself and keep an eye on profit. If you’re spending more than you’re bringing in, you need to make changes—fast.
One of my favorite questions to ask someone is, “Why do you do what you do?” The answer always gives me a lot of insight into what drives someone and what they’re passionate about. In all the years I’ve been asking that question, no one has ever said to me, “Jim, I just love bringing in business. Sales sales sales. It’s all I think about, all day.”
There are people who love sales, of course, but most of us small business owners go into business for ourselves because there is a particular thing we’re good at and enjoy. You love building decks for families to gather on, or maintaining healthy and safe rental residences, or helping someone find their forever home. You love the intricacy of electrical work or the detail of drywall and painting. That’s what you want to do, and because you’re great at it, you think—you hope—that skill will be recognized and business will just fall into your lap.
As you’ve probably discovered by now, that doesn’t happen. Sure, you might have a leg up in brand-building if you’re a franchisee or your service might sell like hotcakes during a particular time of the year, but it’s not enough. That’s the straight-up truth: If you own a business, you have to do the business part of the business. If you don’t, your business will become a burden.
The good news is, there are ways of spending less time and energy bringing in business than you think you have to. If you develop a strong, consistent program of marketing, networking and referral strategies, you will build a funnel that keeps business coming in, even during what some people might call your “slow season.” (Pro tip: There is no slow season. You need to keep on this year-round.) The even better news is that there are strategies for bringing in business that work for everyone: introverts, extroverts and everything in between. You just have to find those strategies, use them and keep using them.
The lesson: Find ways to bring in business that work for you and that you use consistently. Still hate selling? Don’t worry: When you rev up your sales, you’ll be able to afford to bring in someone who loves selling.
Learn more: If you hate selling, check out my video I HATE Selling: Bring in Business NOW.
Even if you’re paying yourself well and bringing in business steadily, you may find that your business struggles to get the work done. Some team members are falling short; others are working hard to take up the slack, and they’re getting overwhelmed and frustrated. You’re getting overwhelmed and frustrated, too, and feeling maybe this is all more effort than it’s worth.
Here’s another straight-up truth: Employees do not develop themselves. You would think we all have the ability to grow our skills and forge our own career path, but not all of us do. Sometimes it’s a lack of ambition, but it can also be a lack of experience or maturity or the feeling that what we do doesn’t matter.
If you’re going to own a business, you need to lead your people. You need to make sure that they believe in what they do and that they have the skills and tools to do it well. That means knowing your employees and understanding what drives them. Why do they do what they do? Why did they come to work for you? What professional goals do they have? What do they want out of life? What do they worry about? What holds them back?
You may not feel like leading comes naturally to you, but we all have it in us to learn to lead. Start with these three things:
- Envision what you want your organization to look like. Map out the organizational chart of your business’s future: what roles you’ll need and what kind of people you’ll need in them. It’s easier to lead when you have the right people in the right positions, and it’s easier to grow efficiently and effectively when you have a vision.
- Know what your employees need and want. Know what your employees need and want professionally, but also personally. Then help them get it. (Pro tip: What an employee needs and what they want aren’t necessarily the same thing.)
- Meet with each team member on a regular basis. Hold monthly mentoring meetings. Help individual team members set quarterly and annual goals. Lay out clear career paths in your organization.
The lesson: Don’t wait for your people to develop themselves. Helping them become the best they can be, professionally and personally, helps your business become the best it can be.
Learn more: For more on empowering and developing your team, listen to my podcast with HR Guru Kay Congdon, People, Position, Passion!
Should You Keep Going or Close Down? The Single Most Important Factor in Your Decision
When your business becomes a burden, you have to ask yourself if you want to try to fix what’s wrong or close up shop. In more than 20 years of experience, I’ve found that there is one factor that gives you more insight into that question than any other: the health of your relationships.
What I mean by health is whether you, your family and your employees are being hurt by the business or being helped by it. Does the business bring prosperity and the opportunity to thrive professionally and personally, or does it create stress and prevent people from having the time and energy they need to do the things most important to them?
This is so important because our relationships are so important. It’s the people around us who sustain us through the bad times and celebrate with us during the great times. If your business has become such a burden that you’re not able to take care of yourself and it’s breaking your relationships with your family, friends and employees, your business is too much of a burden.
Let me be clear about something: We all get unbalanced. In the life of any business, there will be days, weeks and perhaps even months when our risk-to-reward ratio gets out of whack. That’s perfectly natural, and it is okay. What’s not okay is when that imbalance becomes permanent and starts doing real damage.
The lesson: The health of your relationships is a good indicator of the health of your business. There is no business worth risking the people around you for.
Learn more: If you’ve forgotten what you want and need out of life, read my blog How to Start Dreaming Again.
A Last Piece of Advice: Questioning Your Business Doesn’t Mean You’re a Failure
As sad as it makes me to hear people ask if it’s time to shut down their business, I’ve asked myself that same question—more than once. Since I’m obviously still here, it’s not a spoiler to tell you that every time I ask myself that question, I come up with the same answer: It’s not time. That’s because going through this thought process always reminds me why I’m here in the first place. It helps me rediscover my purpose and passion. It refocuses me and leads me to find new and better ways to do the good work I still want to do.
I hope it does that for you, too. If it doesn’t, though, that doesn’t mean you’re a failure. It means you’re taking the blinders off. It means you know this is no longer the right path for you, that you’re no longer getting what you need from it. That will probably feel disappointing and it’s never easy to walk away, but our purpose in life isn’t to run a particular business; our purpose is to serve ourselves and others in the best way we can, in the way that is right for us and the people around us. Sometimes, running a business stops being the best way.
There is power in that; it means you can go out and find the new best way. And who knows? Maybe that means getting a job. Or maybe it means trying again in the future and running a different kind of business. What’s important is that you and the people around you are happy and well cared for.
If you do decide to stick with it, commit to making things better and getting back in balance. Start by looking at how you think about money, how you approach sales and what you’re doing to help your people succeed. Then, reach out and build up a support network. That may include engaging a coach; when you get stuck, it can help to have an outside perspective and expertise.
(For more on what coaches and consultants do and which one might be right for you, listen to my podcast Business Consultant vs. Coach.)
Whatever you decide, know that you are acting to make your life better. I celebrate you for it, and I would love to be part of your support network. Please reach out to me if I can help.