How Long in Years Should I Wait Before I Close Down an Unprofitable Business

[WatChe]

If you are doing business and you see that it is not moving forward, you should think and observe what is going on with it, that you are not making profit, but there is no business that brings profit easily, before you start a business, you should know about what you are trying to establish in business, you should think about what customers prefer to buy that increase the customer happiness and service.so that you can sell to them and advertise it, because it is sometimes difficult to get profit when starting new business. Is not advisable you should stay for 3years if business is not going smoothly, is better you should change it and go for new one.

There are examples where people kept on trying for years before getting success. So there is no definite period defined after which your chances of success are zero. But if you are not getting success then you may look at strategy you are following. Something reconsidering or redesigning the strategy also work. I think there is no way one can get success if he is determined, consistent and equipped with right strategy.

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[darkangel11]

I know a person who was barely making ends meet and they kept running the business for years until it finally exploded. The business was a small food truck and they were never behind, they were just barely making any money on top of all the expenses, but it became popular at some point, got good reviews and people begun to pile up. You can never know when the market changes and it becomes good for you.
I also know a guy who was running a scrap yard and 2 years ago the prices exploded, he was basically getting 2x for every truck transported out, compared to a year before.

If you aren't losing money and the business is running itself without bringing profit, keep it going.

[stomachgrowls]

If you are doing business and you see that it is not moving forward, you should think and observe what is going on with it, that you are not making profit, but there is no business that brings profit easily, before you start a business, you should know about what you are trying to establish in business, you should think about what customers prefer to buy that increase the customer happiness and service.so that you can sell to them and advertise it, because it is sometimes difficult to get profit when starting new business. Is not advisable you should stay for 3years if business is not going smoothly, is better you should change it and go for new one.

There are examples where people kept on trying for years before getting success. So there is no definite period defined after which your chances of success are zero. But if you are not getting success then you may look at strategy you are following. Something reconsidering or redesigning the strategy also work. I think there is no way one can get success if he is determined, consistent and equipped with right strategy.

Always trial and error and this is something that would really be normal on dealing up with some venture or business or investment on which it would really be just that a normal approach.
You cant really just make yourself that easily be able to reach out that success or pinnacle of it if you wont really be trying out on whatever challenges that you would be facing up along the way and this is something that must really be needing for you to sustain or survive because not all people would really be having no challenges that they wouldnt be able to face up along the way.

If you are dealing up with something that you havent been able to see some progress despite of different alteration or how many times you do make out that reassessment in terms of those methods and ways
then it would really be up to you on how you would gonna make yourself that making a decision whether you should proceed or would completely stop basing up on your own observation.
There are indeed things in life which arent really meant for us because no matter how hard we do but still we do fail on doing so or able to survive or make it successful.

[Wakate]

If you are doing business and you see that it is not moving forward, you should think and observe what is going on with it, that you are not making profit, but there is no business that brings profit easily, before you start a business, you should know about what you are trying to establish in business, you should think about what customers prefer to buy that increase the customer happiness and service.so that you can sell to them and advertise it, because it is sometimes difficult to get profit when starting new business. Is not advisable you should stay for 3years if business is not going smoothly, is better you should change it and go for new one.

There are examples where people kept on trying for years before getting success. So there is no definite period defined after which your chances of success are zero. But if you are not getting success then you may look at strategy you are following. Something reconsidering or redesigning the strategy also work. I think there is no way one can get success if he is determined, consistent and equipped with right strategy.

Holding a business for a long time is not easy especially when the business is not moving well. I don't always have that time to wait for a business that is not profitable for me if I don't get what I expected to get. This is why it is good for us to always do some quick research when we want to do business and one thing about business is the location.

Location is one of the important aspect of doing business. If a business is located in a good location, there is no way the business is not going to boom and bring profits to the owner of the business. It is good for us to establish a rapport with people when we want to create a business that will give us reasonable profits.

[Aanuoluwatofunmi]

How long in years should I go before I give up and close down a business that is unprofitable?

Before you think about the business not being profitable, have you considered some other factors that might have constitute to the poor performances you've experienced, have you checked in within and without to know what are the possible causes to the poor performances, one thing to observe is that if you never know the causes of this poor outcome, you will still have same experience even when you introduced a new business to set in.

[mirakal]

The hardest thing for entrepreneurs is to be able to survive and not loss in the first 3 years, according to the results of a study from experts, it takes at least 3 years for entrepreneurs to know whether the business will be profit or closed, unfortunately when 2 or 3 months loss then many are impatient so as to close Business and thinking looking for other business opportunities.

Well, 2 to 3 months are a short period to give up. It's a crucial stage to do your best through promoting and think of what your customers might like in order to be attractive and be competitive (if there's other same business near you).

It takes guts if you don't want your effort go wasted just because you're impatient and don't want to continue trying. On the other side, as an entrepreneur, you'll know if the business is gaining or it's already time to closed it down. That is, if you already did what you can do to make it profitable. Maybe that's not the right location or suited business for you so just keep trying.

Yes, I have to agree that it’s too early to close your business after 2-3 months of non profit. For me, maybe I have to give it a year before I can finally decide to close it down and find some other means that will gain more demand from the people.

Business will most likely to fall and not prosper because of its location. Or the location is right but your business idea is not perfect for it. So you have to balance both to make it successful.

[Fivestar4everMVP]

I think i believe the statement based on my own personal experiences, in 2017, i started an electrical and electronics business, three months into the business, criminals broke into my shop at night and made away with almost everything in it, Generators, my Laptop computer plus a host of other electronic gadgets, they even made away with money i left in the drawer, the total loss was running into millions in my countries currency, so let me just say that the total loss was running into 5 thousand dollars and above...

From then, that is, after that incident, i start struggling with the business, at a point, i sold my car and invested the money into the business but it was as if i poured salt into an ocean, nothing changed, rather, everything was becoming harder and harder day after day, i managed to coup with the business all through 2018, went through 2019, and in 2020, just at the beginning of covid 19 lockdown, i went behind and shot the business dead for good, it deserved to really go because it had taken a great toll on me, health wise, psychology wise, financial wise, i didnt regret giving up on the business because it was even like a great relieve to me, at least, it gave me the chance to try something else new and better.

[Emmanuelex]

He's statement is not bad, but at the same time I would say that before you decide to call it quit, it's best to put some things into consideration:

First thing you have to do is research; you have to deep further into the business you're into and see if you can figure out why the business is not being successful yet. There might be one thing that you're doing wrong which is still hindering the business from being successful. And another thing is that if you end the business, do you have other plans? So my advice is that you look into it and see if there are changes you can make in the business, seek for advice from those who have done it before you , and if after you have tried new tactics and it's still not working, then you can go ahead and look for something else and put an end to this one.

[JoyMarsha]

A business that is not profitable after a year of establishment needs to thoroughly cross-check what the issue may be. Although a business takes time to stand on its own, it is one factor that determines its level of success. That will be the location of where your business is situated.

In my, understanding, location has been the major lead to people's failure in business. When you have a business idea in your head, you don't rush into it without first studying the area you want to start up the business.

If the business is not situated in a good-running business area, it is bound to fail because the location is off from the business that is started there.

Because of this, while beginning a business, people opt for an area that is developed, has a lot of residential buildings, and has a lot of people in order to avoid creating a firm that will take years to establish a stronghold.

[Peanutswar]

Every time the community demands may varies, if your business is on the demand you can sustain this but as you were saying that the business you own is not making a profit anymore and more on outside cashflow I guess it's enough for your realization to make a move to stop that business and don't let your self think that it could recover people demands more and they want some new they really need.
Instead don't lose hope if your business fails always try again this serve as lesson and work hard to your financial freedom.

[Dr.Bitcoin_Strange]

- To what extent do you agree or disagree with this assertion ?

Three years is way too long to just sit idle on a business that is not making a profit. In the first year (12 months), you should even already be counting out the amount of profit your business has generated for that year, unless you are not doing your business in a rented shop; if not, you should know how much profit you have generated for the first year and make your calculations to know if it is worth the shop rent you are paying every year. For instance, if you rent a shop for $1350, in a year you are expecting to make at least X3 of your shop rent because if you can't, then your business will likely fold unless you are not the one paying the shop rent with your money. But if you have a shop rent to pay, then your business should be able to generate the shop rent and your own salary as the CEO; otherwise, you should close down the business. But if you have tried to fix things up in the first or second year and yet it's not working, then you should probably close it.

[ChiBitCTy]

This is the type of thing that I studied at business school in college ( university ). By saying that any business that isn't profitable in 3 years should be put out to pasture, you're ignoring an avalanche of variables that could be at play that make this "3 year and dead" theory nonsense. 

It truly depends on a thousand different factors, location, when you projected to break even/a profit, competition, overhead etc etc etc

[Mauser]

If there are no potential profits coming in within a year, then for me it’s best to think another business that will most likely to click in that certain area or location. You can actually chose not to close your business but maybe use the same location to create another business that will most likely gain more demand from the people around.

Business uses a trial an error method too. If the first idea does not work out, then do not waste your time on it. Proceed to your next plan and try out a new business idea then maybe that will work this time. Just be patient if everything does not work based on your plans, learn from it and grow.

That is a pretty good idea and I would also recommend you start looking for alternatives, in case there are no profits coming in any time soon. One year is probably the best time period, because of all the financial reporting also focuses on one year. If the business is only losing money, I would not keep adding new capital too it and rather try to change things. Maybe there is the possibility to reduce your capital and time investment tremendously and only let the business run at the side, without you worrying too much about it. The issue with failing businesses is that we don't only need to take the money you lose into account, but also the money you could have made doing something else. For example, as an employee you could have made 60k USD per year, then we need to add that to the loss we made in one year running our business. It might be hard to accept defeat, but it's better to stop now before the losses get out of hand. Also, we might be able to use all the previous work we put in for another project.   

[savetheFORUM]

Isn't this also a "forced" thing? Like if you can't afford to keep it going then you close it, if you can keep it going then you do not close it. I get that he thinks that it should be closed if its not making enough profit, but at the same time if you are still sustaining after 3 years, then it must be bringing at least SOME money. Think about it, for three years, where did the money came from to pay your mortgage or rent, where did the bills were paid, where did the money came from to help you feed yourself and your family. Basically unless you saved 3 years worth of costs for you and your business beforehand and then spent that while making nothing, then I guess the business already is doing fine. Sure maybe its not worth millions and millions of dollars, but if it pays for you and your family, that's success enough. If it doesn't, then you are already forced to close down to shop and find money somewhere.

Just because someone is able to sustain the business even after 3 years doesn't mean they should keep doing it if it's not bringing any revenue but going into loss. One should only keep doing it if they see some growth and they have the confidence that if they keep working on the business, make some changes here and there, do some innovations that will bring more customers, etc., then the person should keep spending money on it, otherwise, it's useless and shouldn't be done.

A business that generates $20k per month and the total expenses you have to bear are $30k or maybe more than that business is basically eating you up, and you will soon become bankrupt and will either need to take a loan or start selling what you own to keep running it, so it's definitely better to think about stopping it right there.

[JeffBrad12]

Honestly when the business isn't sustaining thats the time you already need rethinking twice about your decision in continuing the business.
but I don't say you should immediately rethink but make your decision based on your data going forward like seeing how business is going within the time frame of a month.
then you would make the ultimate decision whether to keep the business or instead just close it down since it has no future.
after all, you should always be logical and make decision based on the data then you will make best decision ever. otherwise you might continue to lose.

[bayu7adi]

In my, understanding, location has been the major lead to people's failure in business. When you have a business idea in your head, you don't rush into it without first studying the area you want to start up the business.

If the business is not situated in a good-running business area, it is bound to fail because the location is off from the business that is started there.

Location indeed plays a pivotal role, and it is crucial to acknowledge that each place presents distinct challenges. For instance, the issues faced by individuals in urban areas differ from those encountered by their rural counterparts. Meanwhile, businesses are driven by the objective of offering solutions to prevailing predicaments.

Personally, I have observed numerous individuals faltering in their entrepreneurial endeavors due to ill-considered locations. The experience of selecting a strategic location holds paramount importance. In fact, anyone aspiring to embark on a business venture must ensure that the scope and coverage of their enterprise are meticulously planned even before deciding to initiate the venture itself.

[Razmirraz]

How long in years should I go before I give up and close down a business that is unprofitable?

I was listening to a podcast where Kelvin O'Neal¹ was featured. He said, "If you are not making money after 36months(3 years), you've gotta take a behind the barn and shoot it. It's just a hobby. It's not a business."

According to him, "people can get so stuck on a bad idea that they just keep thinking that if I keep working on it, it's going to fix itself. It doesn't fix itself. It was put on your journey to teach you, what not to do."

I agree with Kelvin O'Neal's statement, what he said I have experienced before. In 2016 I opened a business from scratch, needed unexpected capital such as decorating a business place, buying needed equipment such as shelves and other unexpected needs. The first year I couldn't do much, my business didn't go as expected. Entering the second year, not much has changed, the capital I invested in doing business began to decrease due to financing my daily needs.

Then I started thinking in the third year, if things like this continue, my capital will run out. I started to apply the marketing science of selling capital, there is no profit that can be obtained every time a transaction occurs. After running for almost two months, consumers began to increase, maybe because the goods I sell are cheaper elsewhere. Slowly I started to increase the selling price little by little in stages with the reason that the buying value was increasing.

Consumers are starting to understand the conditions that are happening, they are already used to the new rates. In the end my business started to survive even though the profit was not too big. Whatever you do, you need patience and the latest breakthroughs. When the situation doesn't go as planned, you need to make the right decisions and have the courage to take risks to survive a downturn.

[qwertyup23]

No, I cannot wait for 3 years to finally decide to close a losing business. That's just way too long for me. Although I haven't had a business with a capital of over $20k. A few years ago, I tried to open a business with that amount as its capital, after a few months of processing the papers and attending meetings where sometimes politics are involved in a local place, I gave up before it even started.

So maybe a big capital like those rich people are starting, they just cannot simply give it up and lose all the investment. But for smaller businesses, 3 years is just way too long to suffer and the capital loss is a bit tolerable.

As a general rule, one (1) year gives you a broad idea on how your business is working on the market. Depending on the type of business you have started, that amount time gives you at least a rough estimate on how you have proven yourself to the market and on how your customers are loyal.

In the food industry, there are certain cycles where a business can be profitable in the long-run. In the first four (4) months of business, your customers must know your product and they at least must have decided that distinguishing factor you have compared to other businesses. In the next eight ( months, this will determine if you have a loyal customers who have repeat orders.

To conclude, a business must be thoroughly planned out before you decide whether you want to continue or to close. While others may have a relatively longer of time on its forecast, one (1) year is the typical time in order to decide whether it can be profitable or not.

[KiaKia]

It's heard to open a business in an undeveloped country, before you see customers that will buy from you it will be hard because the economy is very bad and people are mainly focusing on just surviving and eating food.

Environment has a bigger part to play with opening business in a certain location, always do your right findings before proceeding, your success rate develops on the situation of the country, state or location.

There is a different in leaving your country for another country to study or go to university, the quality are higher standards compare to local university in your countries.

If your country's situation is bad and you have a good business in mind, leave that country and travel to another good country to start your business, you will grow and become successful.

[slapper]

Isn't this also a "forced" thing? Like if you can't afford to keep it going then you close it, if you can keep it going then you do not close it. I get that he thinks that it should be closed if its not making enough profit, but at the same time if you are still sustaining after 3 years, then it must be bringing at least SOME money. Think about it, for three years, where did the money came from to pay your mortgage or rent, where did the bills were paid, where did the money came from to help you feed yourself and your family. Basically unless you saved 3 years worth of costs for you and your business beforehand and then spent that while making nothing, then I guess the business already is doing fine. Sure maybe its not worth millions and millions of dollars, but if it pays for you and your family, that's success enough. If it doesn't, then you are already forced to close down to shop and find money somewhere.

Just because someone is able to sustain the business even after 3 years doesn't mean they should keep doing it if it's not bringing any revenue but going into loss. One should only keep doing it if they see some growth and they have the confidence that if they keep working on the business, make some changes here and there, do some innovations that will bring more customers, etc., then the person should keep spending money on it, otherwise, it's useless and shouldn't be done.

A business that generates $20k per month and the total expenses you have to bear are $30k or maybe more than that business is basically eating you up, and you will soon become bankrupt and will either need to take a loan or start selling what you own to keep running it, so it's definitely better to think about stopping it right there.

However, is there anything else besides profits and revenues? What about customer loyalty, credibility, brand recognition, and innovation? Even when businesses are operating at a loss, they may occasionally acquire additional intangible assets. Maybe after 5 years, or 6 years, or 4 years, the business will experience a profit surge because the timing is right, or it might not be the right time but could be

Indeed, the situation could result in bankruptcy, and nobody is willing to take out loans or liquidate their assets. Nevertheless, remaining there may not be the only option. Perhaps it's a matter of finding the right angle, or perhaps it's not, but adjusting business strategies could turn the tide, even though the tide does not actually turn