It might be the economy, it might be a bad break or you might have had the right idea but at the wrong time. There is a nearly infinite number of reasons why projects don't pan out, and such failures are inevitable. The mark of a great business mind isn't in never failing, but never letting that loss define you. The question for the entrepreneur is, how do you do that?
By quitting. Knowing when it's time to cut your losses and move on is one of the most useful and underrated implements in the entrepreneurial toolbox. Refusing to quit when necessary is equivalent to staying put on a sinking ship. You're doing the best thing for yourself and the rest of your team when you put an end to a failing initiative before it can become a full-fledged disaster.
Call it "constructive quitting." It's not the ultimate failure, but the kind that lets you build toward something better. The difference between constructive quitting and true failing is what happens next. If you've done it correctly, a temporary setback becomes the first step to something greater.
It probably sounds counterintuitive, especially when you've been trained to keep moving forward as you put your business together. The ability to keep that instinct in check is the difference between blind ambition and real, lasting success. It's a lesson that has continually popped up in my decades in the financial sphere, and one that buddingentrepreneurs can certainly learn from.
Weathering the storm
I've been able to find success in my field, but that doesn't mean my own road has been without those tough gut-check moments. In fact, I was well into my career the last time I had to make a major loss-cutting move.
Building my latest company, Vest, has provided me with an opportunity to put the lessons I've learned into action. Of course, it felt less like an opportunity and more like a hardship when it was time to make some difficult, company-reshaping cuts. It's been a tough road, lined with some of the hardest decisions I've ever faced in my 25-plus year career.
In creating Vest, we set out to build a financial wellness firm with a holistic approach. I was so set on my vision for what the company could be, that I didn't let our lack of a go-to-market strategy dissuade me. I made a mistake many entrepreneurs make: letting my ambitions overcome my practical side. They'd always served me well in the past, so my guard was lowered when things started to turn out differently from what we'd hoped.
I take pride in my ability to build an effective team, so I didn't realize immediately that the one I had put together wasn't getting the job done. Promises were being made and going unfulfilled, and as the one in charge that failure was reflecting on me personally. When it happens enough times, such misguided communication can put the whole operation into question. I took a long look at the entire company and even considered scrapping it entirely. Ultimately, I had to make the choice to let go of my CEO.
Looking back, it was the right thing to do, because it put us in the position to move forward productively with a new team. But, at the time, it felt like a massive failure. How could I, after multiple decades growing successful businesses, let this happen? It felt like a repudiation of all my earlier success. This is because I was letting pride dictate my thoughts.
The deadliest sin: Pride
I know what you may be thinking. You're an entrepreneur because you see things through to the end, because you're dedicated to creating the best product there is and you'll go through hell to make sure it happens. That's great! Relentlessbelief in yourself is an excellent mindset to have while building a business. Just know that pride can eventually become your worst enemy, especially when times get tough.
It takes a certain kind of humility to make the choice to cut losses and refocus. You've dedicated so much of your energy to building that project that cutting it loose can feel like a personal failure. Maybe it is, in a way, but it's not the kind of failure that will mark you forever.
If you're concerned about the way it'll look to others, consider this: When your company is in dire need of a reboot, you don't want to be the last person to know it.
It's not about winning every battle. It's about winning the war
Knowing when to cut your losses means overriding the irrational part of your brain. This is where the importance of mindfulness and self-awareness comes in. To be truly mindful is to know yourself, why you think and act the way you do. The ability to see from this outside perspective is the goal of mindfulness, and it's no coincidence that it has caught on in the business world. That exact skill translates to building a business, especially when it comes to making constructive quitting decisions.
It's called the sunk cost fallacy. You've spent so much time and money starting your business that your mind falsely believes you have to keep at it in order to justify that effort. Fighting this urge is the toughest part of constructive quitting. Just remember: You have one goal, and that's to build a successful business. Everything else -- the minor battles, the methods you use -- is secondary.
Climbing your way to the top won't be easy, and your response to your obstacles will end up defining you. Foolish pride and stubbornness are a surefire way to bury your business before it gets anywhere. Instead, being mindful of the difference between what your company needs and what you can jettison will prepare you for real, productive change. Rather than an admission of defeat, learning to quit may well be the best way to truly win.
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This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editors