Business: how to understand that it’s time to tie it up

The joke is that each project is a Russian roulette. Yes, you can have experience and knowledge, but still there is a chance to go into a minus. Therefore, one of the very first things that needs to be thought out ashore is the exit plan. More precisely - how to understand that everything, played enough, it is necessary to close the business.

Not to be able to go out in time is to risk the car first, then the apartment, and then mental and physical health. An important role, by the way, is in the risk of Ponte, but about this a bit later.
')
One more thing. Failure is usually not a tragedy, but a statistic. That is, it inevitably happens in most projects. Another thing is that in the case of your personal business, your first project may be the only one, since there will be no money for another.

Statistics is cruel

If we consider money as a tool, then their local losses are absolutely not important. What is important is that it emerges from the results of hundreds of repetitive experiments. Another thing is your separate project - you have only one attempt, and you need to set so that there is a chance to recover adequately later. And there is no backup. Therefore, the main tool and insurance is to determine how to understand when to close. At the stage of drawing up a financial plan. And then do not go beyond that line.

If this is not done, then the "even slightly" syndrome may occur. It is expressed in the fact that when things go wrong somehow, there is a feeling that it is still a little bit, and it is about to go better.

Why? First, because it is psychologically difficult to admit that the first case did not go. It would be rational to fix the losses in time and get out, but emotionally you still want to rectify the situation. You're not a loser, damn it!

Secondly, a novice entrepreneur probably has time to tell friends about what he is doing and how he is doing. Ponte may appear. A show-off suggests that it’s not so easy to “jump off” from the role of a successful businessman. As a result, a loan will be taken, taken on the sly, if only not to tell anyone about your bad deeds. And then everything will get worse.

Thirdly, there are often thoughts that you have to wait. Most of the projects are really gaining more customers over time - word of mouth, deferred effects of advertising, and just familiarity work here. 5 years to keep the store in one place - already enter into the head to everyone who walked past. “Oh, he was standing here with me as a child” - that’s what it is. But in reality, when there is no sales, it’s silly to do nothing and wait for them. The situation has a tendency to deteriorate, so you need to move constantly. He stopped - froze. If the demand is bad, then we must move, not hope. Hope is a very bad strategy.

Fourthly, there are hundreds more emotional arguments, starting from attachment to the team (which will have to be dismissed if this was your first business, and there is no place to transfer them) to the successfully found premises that you feel sorry for losing.

So what to do?

Since it will be quite difficult to understand the course of the play, it is necessary to put an end to the point of no return in the business plan for yourself. And stick to it clearly. For example, if they decided that it is impossible to fall less than minus two million, and fell by minus two million and the ruble - they closed right away. A ruble is a trifle, but so a ruble for a ruble can wait for minus three million.

Yes, it's a pity, yes, it happens, but it is better to be fixed with the muzzle of a robot than to continue to make mistakes of human emotions. Unfortunately, I saw a lot of sad stories in which they sold cars and took loans as collateral for an apartment. I know the story of a business with a very high for the first business entry threshold - 6 million, for which a person has saved for ten years. They warned, they say, check the mini-model somewhere, there is still no such market, you need to create it from scratch. Nifiga, went, went broke. This desire to start at once to do everything seriously, “I put on everything” is also very dangerous. If you have the opportunity to first deeply explore the topic and try something small, some piece to prove that the business will work at all - it is better to use it. Therefore, in a small business it makes sense to talk about the fact that profit first, then costs. You need to get it and prove that it happens, and then invest, and not vice versa.

I saw quite a lot of failures because of the inability to do something, for example, a very bad selection of personnel. Here, of course, it is possible and necessary to prepare in theory. Most often we are talking about collecting cones in the past place of work, from where you are already trained you go to your own business, in which you understand. If you mow too much, it is better to realize this in time and leave resources for a second attempt than to correct a bad situation in advance.

I saw a situation where the exit point was discussed by the two founders, and then, as the situation worsened, moved away. Like, here we did a good job this month, and the weather was still rainy - we'll catch up next. Nifiga, the weather should not affect. We agreed to train about deadline - no need to go for it. That's why he is a “grandfather”.

And another cool thing is when, at a certain exit point, eccentricities begin with bookkeeping. In fact, self-deception to delay the closure. It is also extremely unproductive, and may result in the investor's legitimate suspicions about fraud. What else spoils the relationship.

Scaling

Almost exactly the same can be attributed to projects within a larger business. For example, to break up some major tasks into projects. For example - we close 5-6 stores a year to transport them to new places, or open new ones somewhere else. This is a well-established business model. In the new directions - we are constantly trying something, surviving well if 2 out of 10 projects. This, by the way, is a serious success, the same startup incubators can play the lottery with a 1/50 chance. In general, an average business can generally be thought of as something that has already been tested and tested, and new experimental projects that may or may not shoot. We have this release and choice for localizing new games, opening new retail outlets, adding any new product to the range, and so on. But projects in such a stream have a systemic difference from their first project - sometimes you can safely lose money if the result is worth it. For example, if we release a game not for earnings, but for the development of the market, we will not mark up such a closing point (or rather, mark it up, but if we marry it, we will just dock the money).

In the case of business, if there is a stock of funds in other companies, there is still a moment - you need to evaluate the cost of exiting “here and now” and adding additional money. The second may be cheaper, oddly enough. But this is rarely, as a rule, when there are some lengthy processes that in the end increase the value of the company in the sale. If she will.

In general, even on the greatest enthusiasm we should not forget two things - how to understand that everything did well, and how to understand that everything did badly. The first is the plan for the year (“What will I have in a year?”), The second is the point of no return.