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When should an entrepreneur give up on a business idea that they are passionate about?
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5 Answers
There are several scenarios that should indicate that an entrepreneur should give up the idea of a business.
1. Is it really more a hobby than a money making venture? Handcrafted items, for instance, are seldom a life supporting business concept. Or you may be a gourmet cook but owning a restaurant is a very different animal.
2. There is an extremely limited market. You love purple coats but the market for those may be so limited as to prevent it from being a viable business.
3. There is nothing unique about your concept nor does it supply a need or solve a problem. You love planting things and want to open a small nursery. Not only is it likely to be seasonal but it is highly unlikely you can compete in price with large nurseries or big box stores.
4. If you have no background in the industry or even business, then at least put your passion on hold until you can gain essential knowledge through education, observation, intern or training programs, seminars or mentorship. You may love to tinker with computers but that does not mean you are ready to open a computer repair business.
It depends on the objective of the business idea (success for every business isn't always measured in financial gain alone) and how long the resources (time, money, personnel, etc.) you've allotted to the opportunity will sustain you. Once one of the necessary resources dwindles and you have still not reached your objective, it may be time to move on.
I agree with Gail above, but should include: If you are not making money. you should make money in your business generally after 2 - 3 years. You need to know when to cut it off, if you are in a position that you can not pay back your supporters of loans (relatives, bank, friends), then you need to figure out how to pay them back and obviously it isn't the business you are in.
When they've determined that their idea is undoable. It either costs too much to create and could never be sold at a profit, or it is not something that there is a market for. It could be that the idea is something that is in a product market that is over saturated making a situation where the entrepreneur would not be able to realize a successful business with it.
When they realize they are not making any money. When there are no profits.
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