Hi!You’ve spent a lot of time and energy on starting a business - using your own savings, convincing others to work with you, and pouring your heart into it. Even though you’ve been at it a long time already, you’re still going at it…convinced that this is the next big thing! Or is it? At what point do you ask yourself if you should keep persevering? When do you call it quits?
I suggest that you should know before you even start. Let’s consider a simple version of raising funds to illustrate the point.
When you’re seeking investment capital from an Angel or VC, you are selling a specific vision. Included in that is a set of expectations of how you plan on executing that vision with the funds you’re seeking to acquire. Since the investors will hold you accountable for those expectations, if you can’t execute, you can be certain that they won’t invest in your business again.
In this scenario, it’s pretty easy to understand when it’s time to shut down your business. The funds will eventually run out. And when you run out of money to cover operations, it’s game over.
However, during the early stages - before funding - the rules of the game may not seem as clear since you’re not operating a business with investment capital. Instead, you and your team are putting in sweat equity by working nights and weekends, and I’ll argue that the blood, sweat and tears you are putting into your idea pre-funding are much more valuable than any amount of money an investor will put into your business.
Time is your most valuable resource because you can never get it back once you have used (or not used) it. You are basically an investor of your own time. So, before you embark on a project, make sure to sell yourself on your own vision; if you can’t do this, then stop here. Progress will be slow, and you will never be able to sell it to potential team members and future investors.
Once you’ve bought into your own vision, set up reasonable expectations on how to execute that you and your team can agree on and, most importantly, commit to. The best way to do this, so that you can track your progress, is to form milestones. (This is with the understanding that the process used to reach these milestones may change.) Here’s an example of a simple set of milestones:
- Finding essential members of your team within 2 weeks
- Building a prototype within 4 weeks
- Get 5 early customers into your business within 8 weeks
- Establish partnerships for distribution/acquisition within 10 weeks
- Get commitments from investors within 12 weeks
If you’re not meeting these milestones within a reasonable margin of error, then you should consider whether or not to continue investing more of your time and energy.
Success may be around the corner, but if you’re still struggling to get out of the gate six months after starting your business, then you need to have an honest discussion as to why. Identify the roadblocks and either figure out how to get around them or stop where you are. There’s no shame in folding a hand you know won’t win. You can always play another round.
