Should you call it quits in your small business?

should you quit your small business

At GoForth Institute, we’re all entrepreneurs too, and most of us have been business owners more than once. Entrepreneurship is a rewarding journey, but it’s also got its fair share of failures and struggles.

Obviously, we want you to love what you do, but like the song says – sometimes love just ain’t enough. If you’ve been getting that nagging feeling that maybe this particular stage of your entrepreneurship journey is at an end, one or more of these signs might sound familiar to you:

  • You’re losing money at a rapid pace. It can take up to three years for a small business to turn a profit, but if you’ve tried everything and still see your money slipping away faster than it’s coming in, it’s not good. Lack of cash flow is the number one cause of business failure.
  • Your relationships are suffering. If you’re so stressed that you’re taking it out on your loved ones, or work so much that you never see them, it could also be an indication that it’s time to close up shop. However, it could also be an sign that you need to hire some help!
  • You’re bored. When you started your small business, you were thrilled by it and spent every waking hour dreaming and planning. But what if you have no more ideas and are just running on fumes? Could you benefit from seeking outside help with planning or networking?
  • You dread your workdays. If the thought of another day as a small business owner makes you feel miserable, that’s not a good sign. Analyze this feeling. Would a new direction for the business help? Some new employees to take the load off? Think about what it would take to make you love your small business again, and plan out all options.
  • Your health is taking a turn for the worse. If the pressure and stress you’re feeling about your small business is taking a toll on your health, then something’s not right.

Is it time to close your business?

If you answered ‘yes’ to one or two of these things, you may have a problem. It might be a sign that it’s time to think of an exit strategy. However, it could also be a sign of a problem that can be solved in a different way – a staff member to take the load off, for example.

As we said above, most businesses don’t become profitable until about the third year of business, so we usually don’t advise throwing in the towel after, say, 14 months. However, if you’re starting to feel like maybe you want out, take it seriously. Take time to analyze all options available to you, to make very sure this is the best course of action. If you do decide to close up shop, regroup, reflect, and plan for your next small business!

We should also mention here that skills training can make the difference when it comes to entrepreneurship success. No matter what stage of business you’re in, small business education, like the kind offered by us at GoForth Institute, may help you tip the balance from “What do I do?” to “I have a plan!” Knowledge is power!

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When to hire in your small business

when-to-hire-in-your-small-businessWhen we interviewed successful entrepreneurs across Canada, one of the areas of difficulty they found in their businesses was the decision of when to hire employees.

So – how do you know when to hire your first employees?

  • Sum everything up in a big pros and cons list — identify what benefits an employee could bring to your company, as well as the drawbacks and costs of being an employer that would result.
  • Which business activities are you really good at? Which could use some improvement? It often doesn’t make sense to hire someone to perform an activity that your company is particularly skilled with.
  • Consider the financial impact that hiring will have on your company, as well as on corporate culture and daily operations.
  • Take a look at your business’ finances and calculate your ability to afford payroll.
  • Assess the variety of options you have available, such as full-time, part-time, hiring on contract/a freelancer, or hiring a student.
  • If you find you’re not ready to commit to hiring a new employee, consider contracting or outsourcing the work through personal networks or websites such as Upwork or Freelancer.
  • Consider the business activity that will be happening in the next month, three months and six months. Is this a workload that you’re able to handle on your own? Think about the business processes you’re currently responsible for that you could hire help for — things like accounting, administration, manufacturing, website design, marketing and public relations.
  • Once you’ve calculated an allowable budget for hiring, consider whether you can afford a part-time or full-time employee or if it would be more beneficial to contract the work.

There’s a lot to keep in mind when making the decision to hire your first employees, but with proper planning and research, it can be a very rewarding experience!

After you’ve hired:

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Tip of the Month: Hiring Your First Employee

Your small business is growing and you’re finding yourself with more work than time – great conditions to warrant hiring your very first employee! So, now, how do you do that?

Firstly, this might seem like a no-brainer, but make sure you really do need an employee. As with every business decision, we encourage you to sit down and write out a plan. What will this person do? How often? For how long? Can you afford to pay someone? Can this person actually be kept busy and fulfilled?

Once you’ve decided that hiring an employee for your small business is definitely the way to go, here are some next steps:

  • Open a payroll account with Canada Revenue Agency.
  • Ensure you follow all governmental Human Resources Regulations.
  • Identify job requirements and prepare the job description for your first employee.
  • Use application forms for applicants and be sure you know what you can and cannot ask.
  • Begin to interview your chosen candidates (we recommend you set yourself a limit of interviews).
  • Check all references provided.
  • If this position requires any kind of testing, this can be undertaken at this point.
  • Once you’ve selected your ideal candidate, prepare an offer of employment letter.

Check out GoForth Institute’s How-To Guide for Hiring a First Employee for a step-by-step, more detailed document you can download for free to reference whenever you like.

Hiring your small business’ first employee is a very serious consideration, but it’s also infinitely rewarding and even fun. Enjoy!

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