women on wine (& 1 on tequila) searching for life’s answers!

I was recently talking with a friend who had to close down their business - VERY sad day. She was telling me that she felt like a failure because she couldn’t make the money to pay her business expenses. She’s not alone. In fact, she’s not the only one. I’ve talked about restructuring my jewelry business early in 2009 to put it a little further back on the burners.

Luckily I am blessed with talents that allow me to roll myself into something that will make money in RKN Studio. I’m not saying that to brag … just that during tough times we have to re-evaluate and figure out a way to make ends meet.

I just read a great little side article in Entrepreneur Magazine this month titled Closing Time. Here are three tips that Jennifer Wang gave to know when it’s time to raise the white flag and do something different:

You find yourself positively spinning–or outright denying–the negative numbers.
Entrepreneurs tend to be optimistic, and in the face of bad results, there’s a tendency to think, “Just a bit longer.” But Barry Staw, a professor at UC Berkeley’s Haas School of Business who has studied how often escalate commitment to failing endeavors, warns: “Don’t be the person who needs to be hit over the head with a sledgehammer. The longer you keep going, the harder it will be to withdraw–and the more money you’re probably going to lose.”

Nobody else thinks it’s a good investment.
Would you put into the business as it is now? Ask others for an honest answer and take the nos seriously. “You should never sit on a stock unless you’re willing to put in new money for it, and the same thing goes for a business,” Staw says. “Many entrepreneurs have both successes and failures under their belts. There’s no point in betting your whole entrepreneurial life on a single venture.”

You passed your “quit” threshold a while ago.
Every business is different, so there’s no universal cutoff that marks when you should call it quits. But while things are good, impose a limit on yourself (number of months in the red, a total debt amount, the moment you consider dipping into your kid’s college fund). Write it down and stick to it. Otherwise, you’ll keep changing your story. “It’s far easier to make logical decisions before things start falling apart,” Staw says. “Remember, an intelligent retreat isn’t the same thing as failure.”

After I read this article I re-thought my decision early in 2009 and realized that it was a very smart idea to put My Little Pretty on the back burner. I’m still working to pay off some of the debt that I incurred with doing trade shows, etc. but I never compromised my families livelihood or spent Zac’s college fund. Honestly - I’m still doing SOME business with My Little Pretty … just not as much and one day, I believe I will still be able to sell what I have built to someone who loves the branding and designs that I have already done :D.

It was (and still is at times) a tough decision to make … but the fact that RKN Studio is growing leaps and bounds since we launched it tells me that we’re on the right track.

What tough decisions were you forced to make that have turned into the best decision you could have made?