When I was trading equities and futures on Wall Street, it was only numbers on a spreadsheet. Winning or losing it was all the same. Numbers on paper. But when I became an entrepreneur and started building businesses, and could point at what I was doing, then being wrong was far more obvious and painful.
So on top of the many challenges of starting a business, as an entreprenur you need to know when it’s time to fold. Sometimes you have to surrender first in order to win later. Here are five reasons why:
If you had a hundred dollars to invest, and you minimised each loss to only ten percent, you could trade a hundred times before losing it all. A hundred tries is a lot. Chances are that if you were disciplined enough to do that, eventually you would be right, and the winners would make you enough money to cover your losses. And if you pyramid on your winners and add to them as they grow, you could even multiply your gains.
Losing takes its toll, both emotionally and financially. It’s better to stop early, regroup, and start again rather than endure a lingering business death.
Admitting insolvency and facing family and friends after a failure is a hard thing to do and, for a while, might make it all seem worse. But things will eventually improve, and it is better to get it over with. Borrowing more money is rarely the answer. Your original business idea might have been a good one, but if you have executed it poorly or failed for any reason, and are now under a weight of debt, there is really no better way forward than to cut your losses and close down the business.
People become attached to their businesses, so they hold on and continue to throw good money after a bad idea. They had a reason for starting their business in the first place, and they struggle to admit that they were wrong. They always think their losers will turn around, and they usually don’t.
Don’t struggle with the temptation to doggedly try over and over again, expecting a different result. Don’t remain wedded to an idea that hasn’t worked. Being stubborn doesn’t make you smart.
It’s better for everyone to know what’s really going on. This builds trust, and it’s the right thing to do. It’s not a failure to be wrong and shut down your business. The only failure is not getting out when you should.
If your business isn’t making money – if you constantly need to subsidize it with more funding – don’t fool yourself, your investors, or your bankers into thinking it will come around. Be brave and honest. There’s no harm in being wrong and failing. If it’s not working, chances are it won’t. In life and in business, just get the hell out before the failure becomes spectacular.
Failure is not the end of your entrepreneurial ambitions.
It’s better to be persistent than dogged. Being persistent means if your business idea isn’t working, you don’t give up, but you do change the way you are doing things and try again. Doggedness means doing the same thing over and over and expecting the results to be different. Many people get these two attitudes confused. Don’t let it be you!
Paul Oberschneider is a seasoned start-up entrepreneur and property financier who has personally built businesses worth over 200 million. After a career of trading on Wall Street in the 1980s, Paul started again, went to central and Eastern Europe where he helped start a bank credit department, founded a mortgage company, and built the largest single-branded real estate company across five countries in Central Europe. He also developed a portfolio of hotels and shopping centers and hypermarkets in Eastern Europe, constructing over two million square feet of retail space. Paul has been featured in the Wall Street Journal, Bloomberg, Property Week, and Washington Post.
Today I am involved in the entrepreneur community, trying to share what I’ve learned and I serve as a mentor for startups.
I have authored a new business startup report called “How To Start A Business”. This shows you how to find, enter and profit immediately from a high demand market with virtually no competition… what I call a Blue-Sky Market!
This is how I could turn £400 into £50,000 in just 8 weeks.
Blue-Sky Markets are all around us. You just have to know where to look and have the courage to do things a little different.
To grab your free copy just click the link below: