MBA2486 Q&A Wednesday: How do you know when to call it quits and when to persevere?

0:09Heyo! Welcome to the$100 MBA show. Powerful business lessons you can count on to help start, grow, grow, and scale your business. I'm your host, your coach, your teacher, Omar Zenhom. And today's episode is Q &A Wednesday, where we answer a question from one of our listeners. Today's question is from Salim. And Salim asks, how do you know when to call it quits and when to persevere? Hey, Omar, love the show. Really appreciate all the insights you give. There's a lot of talk in entrepreneurship about grit and how grit is probably the most important trait to succeed. This can cause a dilemma among entrepreneurs.

0:46How do you know when to use grit and keep going or stop the idea or project due to seeing no results? How do you know when to call it quits or persevere? Thanks again for your time, Salim. Salim, I got your back. This is such an important question because it's a question that most entrepreneurs are going to have to answer. It's something they're going to have to face in their journey. Should I just buckle down and keep working hard and use that grit you mentioned? Or should I just call it quits, hang them up, and just admit that this is not working and I need to move on? Everybody's situation is different, of course, but today I want to give you the tools, I want to give you the strategies to be able to answer this question for yourself.

1:31If you're listening right now and you're kind of on the same page as Salim and you're not sure if you should keep on going, then you need to listen to today's episode. So let's get into it. Let's get down to business. When I started my entrepreneurial journey, I was not married to my first business idea or business ideas in general. I wasn't so in love with this concept of whatever I was building because in the back of my mind, in my heart of hearts, my goal was really to be a successful entrepreneur. It really was to be financially free so I can have time freedom, so I can have flexibility, so I can have more choices in life.

2:09So the ultimate goal is to be a successful entrepreneur. That is the goal. So if something doesn't work out in my business or I have to let go of a business and start a new one, I haven't really failed. I just haven't found out the way or the business that's going to allow me to reach my goal, which is to be successful as an entrepreneur, to be a successful business person, whatever you want to call it. The point here is, is that just because the project you're working on is not working out doesn't mean you have to give up on this idea of entrepreneurship altogether. But let's talk specifically about if you're in a project, you're in a business that you've started or you've worked on, and you're not sure if you should keep going if you're not getting any results.

2:54Should you just keep working hard? And I'm going to be completely honest with you. If you are not making a profit, meaning if you are spending more than you are making, and this is happening consistently, like three, four, five months in a row, then what you're doing is not working. Okay. You are not succeeding in this endeavor. Okay. You need to do something different. What you're doing now is not working. Sometimes we need to remove the emotional aspect of the business or the idea or our passion or whatever it might be, and just be very objective and just say, Hey, what I'm doing right now is getting me X results.

3:31Are you happy with those results? If not, you need to change the actions, the inputs you're putting into your business. Otherwise, you are just going to be asking for pain. You need to look at the trends in your business. For example, let's say you're starting a YouTube channel, okay? And you've been publishing a video once a week. Are you seeing any positive trends? Meaning, are you getting more views week over week or even month over month? Are you getting more subscribers? Is the trend moving upwards? as long as you're moving in the right direction by whatever metric you're measuring your business then you are doing okay okay that means the business is growing in some way doesn't mean you can just keep on putting your head in the sand and keep doing what you're doing if you want better results you're gonna have to do different things we'll talk about that in a moment but in terms of quitting something is working you just have to figure out what is working and do more of that.

4:27But ultimately, and I'm going to be honest, ultimately your business should be making you money. The whole point of starting a business is you're building something that can allow you to leverage the power of the business to earn you an income that you cannot do by trading time for money and a job, okay? I started a software company and built it for nine and a half years and sold it called Webinar Ninja. The whole reason why I started this thing is because I wanted to create a product that I could sell and I can leverage the power of technology and the SaaS model so I can be able to make more money, make more revenue that can ever do in terms of time versus money.

5:04And we're fortunate enough to make several millions of dollars in revenue and help so many people along the way with our software. But the point here is that, that's the point of the business, is that I'm creating a model to make me money, to make an impact in the world, to have scale. If it's not doing that for you, then you need to do something different. Now, the question here a lot of people ask is, well, what do I do different? Well, you need to understand what business you're actually in. And this sometimes is hard for people because they think they're in one business when they're actually in another business.

5:38This is a very common mistake. This is talked about a lot in a lot of books and a lot of seminars. But I'm just going to break it down to you and give you my personal examples from my own business. I had a clothing line as a business about 15 years ago. It was custom tailored clothing for men. I thought I was in the product business. I thought that I was in this business where if I created the best product, if I created the best shirts and the best clothing, then I would win. I would be the market leader. And that sounds logical. But the more I was in that business, I realized that fashion is not about the best product.

6:15It's about brand, okay? It's about brand. people are just buying brands because of what they associate with the brand and the clothing, the style, all that kind of stuff. Why do people buy a polo dress shirt? Because polo signifies something, signifies a level of quality that says, hey, I'm not poor. I have a polo shirt. Okay. That's what it says. But it also doesn't signify that you're mega rich, like some of the other designer brands where a shirt will cost over a thousand dollars. is a polo shirt better than a Zara shirt in terms of the actual shirt itself maybe maybe not but polo could demand more money and have higher prices than Zara because of the brand it conveys I was just in the wrong business I didn't focus on building a stronger brand of my clothing line I became a commodity meaning that people would choose to buy my shirt or buy a shirt from Sears it didn't really make a difference because my brand didn't signify anything.

7:15So look at your business and understand what business are you actually in? What will actually allow you to get more business, to get more customers? What do you need to focus on? The reverse happened. The opposite happened when I had my software business, Webinar Ninja, for nine and a half years. I quickly realized my mistake in the first year or so. I thought I was in the marketing and sales business because I thought, hey, I'm great at marketing and sales. I can sell the software, especially because it's selling to business owners. It's got a great ROI because it can help them grow their business with the power of webinars and sales webinars and growing their email lists and all that kind of stuff.

7:52I was totally wrong. In this case, I was in the product business. The best product wins in software. And I figured this out and I started to really focus on building a better product by hiring better engineers and a better leadership team and just building a superior product to my competition. Software solves a problem, kind of sells itself in a lot of ways. So it's really important that you invest in the product itself. I believe I heard a story from Alex Hermozzi the other day who had a software company called Allen, and he learned this lesson as well. We were actually together in the same SaaS coach, Dan Martell in SaaS Academy.

8:29And it's a hard lesson to learn because you start to realize, oh, I really need to invest and focus my efforts on the right thing. A lot of people think hard work pays off. I know this sounds nice, but it's not 100 % true. This is assuming they're like, oh, if I just work harder than everybody else, I'm going to win. That's just not true. The person that runs the deli down the street is working hard. The person that's cleaning bathrooms in their cleaning company is working hard. Working on the right things is what makes a difference. So examine your business and look critically about what you're working on.

9:04Examine your calendar, where you're spending your time. And here's a little trick that I've learned through mistakes and repetition of that mistake over time. You want to know what you should be working on? It's probably the thing that you're trying to avoid, the thing that you've been putting off, the thing that you just haven't done yet. One of the things I learned from my coach, Dan Martell, when I was in SAS Academy was that we do not grow into pain, meaning that we will just avoid pain as much as possible, even if it's what is going to allow us to grow. So we will just stop our growth in business because we're just like, I don't want to do that thing.

9:39I don't want to learn that thing. I don't want to hire for that thing. And it may not be on the conscious level, but we're kind of avoiding that hurdle, that next level. You got to be real with yourself and you need to say, hey, are you willing to adapt, change, grow and attack that thing that you've been avoiding? The other thing I would recommend to Salim and those who are listening is that when you're kind of spinning your wheels, you're not sure if you should quit or you should persevere. If you're not getting results of what you're doing, you have to start going into experimentation mode.

10:11You got to see things as experiments. You could do this month is experimenting with this. Let me see the results I get. Does it actually move the needle? So for example, this month, I'm going to focus on my marketing. Maybe my marketing needs refining. The next month I'm going to work on my finances. Maybe my expenses are too much. I need to cut things down. Maybe I need to, talk to my suppliers and get a discount. Maybe I need to raise my prices. Experiment in that area. Maybe the next month you focus on product. The point here is that you need to start doing different things. Stop doing the same thing.

10:44When I was stuck in a rut, we plateaued at Webinar Ninja, our software company at some point, and we tried to break through that plateau. We eventually did, but in the beginning, I wasn't really sure what I needed to do differently. So I just did different things for the sake of doing things differently I know that sounds funny, but it's true I literally stopped working from home and I went to the office. I went to a co-working space I changed my environment. I changed my habits. I changed when I worked out I changed what I ate I just started to change things in my life just so that I can shake things up a little bit and maybe i'll get a new perspective from somebody Maybe i'll meet somebody new.

11:22Maybe I will Get a fresh idea because i'm waking up early and working out the point here is that even when you don't know what to work on, just as an initial thing, do something different. Kick up some dust. You might be surprised what you learned. Lastly, you need to track. A lot of people say, well, things are not really moving, things are not improving, and they don't have any data. You need to track what's going on in your business. Business is numbers. This is it. This is what I've learned over the last 20 years. Business is numbers. It's stats. It's data. It's P &Ls, profit and loss sheets, right?

11:56Profit and loss sheets are so important in your business. It's your runway. It's your profit margins. It's your growth rate. It's your churn. It's all numbers, right? So if you say to yourself, I'm not a numbers person, you got to become one, okay? You have to change who you are because that's what business is. You want to be in business? You got to love the numbers because the numbers are what are going to help you. So you've got to track everything that is important to your business. So for example, if growing your email list is incredibly important for you to grow your business, you need to know exactly every single day how many emails you've collected, right?

12:29What's the percentage of growth versus last week versus last month? You've got to be maniacal about your numbers, especially when you're stuck, because you need to see any little increase, any little improvement in any of the numbers that you track, whether it's signups, leads, new customers, average revenue per customer, total revenue, whatever it might be. Whatever those numbers are that is important to you. And I like to recommend to have three main numbers that you need to focus on that's like your top level numbers. For example, when we were in Webinar Ninja, our top level numbers were number of trials, MRR, monthly recurring revenue, and our churn.

13:06Those three numbers really would dictate the success of the business. If we had enough trials, we would get more revenue. And if we get more revenue, our MRR is going to go up, monthly recurring revenue. And if our churn is low, then we are going to lose less MRR and we're going to keep more money and keep more customers, of course. So the point of the tracking is that even if you see a slight increase, a slight change, you can examine what did I do the last week that changed that number? Or what did I do the last month that affected that number? Let me do more of that. If you don't track what's happening, you don't know how to act.

13:39If you don't track, you don't know how to act. I love this little thing I just made up, but it's true. Peter Drucker, great marketer says what gets measured, gets managed. When you measure something, when you focus on something like those top numbers, then you are going to be very, very alert to the fact that, hey, something changed here. Something happened, whether positive or negative. What do I need to do? What have I done that I need to continue to do at a high velocity to continue to see that positive trend go ahead or what I got to stop doing because it's actually affecting my business in a negative way.

14:13Now, after you've done all this and you still see no improvement, maybe you do have a dud business. Maybe you do have a dud product and it's not what the customers want. I am a big believer that you should be building a business that solves needs and not wants. You want something that solves a problem for somebody that a dire problem, a problem that they really need solving that they, you know, will kiss your feet to actually allow them to buy that product. I know that sounds extreme, but that's the best business to have because that makes your life a whole lot easier. Sometimes we build products or services that are kind of nice to have or, you know, I guess that's cool.

14:54That's not enough drive for people to pull out their wallets and spend their money. So you might need to pivot your business, pivot your product. And there's a great book, called Pivot by Jenny Blake that I highly recommend. She was on the show episode 93, I believe. You could search for it on our website, 100mba.net. She was on the show. She talked about the pivot method and why she wrote the book and how you can learn how to pivot your business or your product. Because you might have something good in that product, but it needs refinement. It needs a new audience. It needs a different angle for it to really hit the bullseye.

15:29Thanks so much for listening to the$100 Reaction. Thank you, Saleem, for asking today's Q &A Wednesday's question. If you've got a question you want to ask, just like Saleem did, go ahead and email me over at omar at 100mba.net. I'll make sure to answer it right here on Q &A Wednesday. I can even give you a shout out to your business if you'd like. Thank you so much for being part of the community and being open and vulnerable enough to ask these questions. Because if you don't ask and ask for help, it's hard to get the assistance you're looking for. It's hard to solve problems on your own. So send me an email.

16:00I answer all my emails personally still to this day. It takes me a little bit longer than I'd like, but I do get back to everybody personally. Before I go, I want to leave you with this. Creating a business or a product that people absolutely love and are ecstatic to give you their money is not easy. It takes time. It takes refinement. There's a process. We all have to go through it. I've gone through it several times in my businesses, but once you get it, it's what's called product market fit. And once you have product market fit, it makes your life so much easier. It's so much easier to sell a product like that because you don't have to convince the market.

16:39You don't have to convince the customer. The customer's just happy they discovered you. Wow, where you've been all my life. Take my money. That's the business you want. Thanks so much for listening and I'll check you in the next episode. I'll see you then. Take care.

16:58Thank you.