How long in years should I go before I give up and close down a business that is unprofitable?
I was listening to a podcast where Kelvin O'Neal1 was featured. He said, "If you are not making money after 36months(3 years), you've gotta take a behind the barn and shoot it. It's just a hobby. It's not a business."
According to him, "people can get so stuck on a bad idea that they just keep thinking that if I keep working on it, it's going to fix itself. It doesn't fix itself. It was put on your journey to teach you, what not to do."
- To what extent do you agree or disagree with this assertion ?
-Have you had a business that even though it wasn't profitable in the first three (3) years, then it kicked off to bring in good returns in the fourth (4th) year?
3 years does seem like a long enough time to determine whether a business is profitable and whether you have the right passion to sustain it over the long run. It's far too easy, especially in the age of internet businesses, to leave a business running as a zombie or barely breaking profit. Sometimes it can be hard as the business owner to admit to yourself that a lot of invested time and money was potentially wasted along the way, if it is unable to sustain itself or see a bright enough future to keep going. However it can be freeing once the process has ended and you can start to heal again, maybe choosing a different idea or building up savings again by working for someone else.