What makes an entrepreneur? Good ideas, hard work and business acumen are all important ingredients. Even more critical are your willingness to take risks, your ability to call it quits, and confidence to try again.
Entrepreneurs who can assess their situation and move on to the next opportunity often become the biggest successes. It’s hard not to take it personally when your business doesn’t meet your goals, but what you learn from the business that doesn’t quite fly will make you stronger when you implement your next idea.
Patricia Boucher of Madawaska addressed her exit strategy from the moment she crafted her business plan. In Women, Work, and Community’s New Ventures Entrepreneurship Training, she decided to write three cash flow projections as she planned to purchase a local floral business.
Pat’s first projection was based on recent years of sales revenues and expenses under the previous owner. Her second projection was more ambitious: what she thought she could bring in, given the fact that she would be expanding the business from part-time to full-time and implementing new marketing strategies and lines of inventory. The last projection was the bottom-line breakeven: the bare bones needed to cover her business loan and bring enough income to cover her living expenses.
Pat bought the business in February 2009 — right before the recession set in and retail sales tumbled to a three-year low. She was able to sustain and slowly grow the business for several years through July 2012. Eventually, as she faced flat sales and health issues that made the highly physical activity of floral arrangements and deliveries more difficult, Pat’s bottom-line breakeven proved important in showing her when she needed to move on.
But Pat didn’t give up on entrepreneurship. In October 2012, she started a T-shirt printing addition to Madtown Clothing, where custom transfers, embroidery, clothing and accessories are sold on Main Street in downtown Madawaska. Guided by her experience and confidence to know she could build a better business, Pat found a new niche.
How did Pat navigate the process of closing one business and opening the next?
“It was heart-wrenching,” she said. “Emotions are so tied up into everything you do. It’s hard trying to force your mind to stay logical and make business decisions. The emotional aspect cannot be a part of the decision-making process.”
At the time, Pat asked herself, “I’ve worked so hard – why is this happening?”
Looking back, she said, “There’s always a reason, no matter what happens. When you finally move forward, that’s when you realize it wasn’t for you. But you have to move forward before you can actually understand and realize how important it was for you make that step.”
Pat’s new business brings many benefits: The work is less physical and easier on her health. Making T-shirts and apparel still utilizes her creativity, an aspect that drew her to entrepreneurship and floral design in the first place. Her retail inventory is no longer perishable, opening up new opportunities for online sales.
“Now we’re on Amazon, and we also have our own website. You can’t do flowers on Amazon!”
Pat’s experience illustrates that what counts as business “failure” is highly subjective. Entrepreneurs vary widely in what they consider success: A business owner with other sources of household income may need only a little above breakeven to meet profit goals and continue the business; another entrepreneur may need the business to put food on the table and cover all household costs. A storefront retail business will need more revenue than the same home-based business before it turns a profit. Health, family and other personal factors also play a role in knowing when to say when.
What makes your business a success or a failure? Only you can answer that question for yourself, based on your needs, your goals, your market and your profit margins. If you are able to assess objectively when it is time to call it quits and are willing to “fail up” without beating yourself up, your next business will be stronger by your experience.
Erica Quin-Easter is Microenterprise Coordinator for Women, Work, and Community in Aroostook County. Women, Work, and Community’s statewide trainings and services are open to entrepreneurs of all genders. For information on upcoming classes and other resources, call 1-800-442-2092 or visit www.womenworkandcommunity.org.