The mere thought of starting your own business might seem like a dream come true, but the reality of self-employment isn’t always so bright. Research has shown that, while there are plenty of upsides, entrepreneurship can be fraught with problems ranging from burnout to outright depression.
Beyond these issues, some business ideas just don’t work in a financial sense — as in, the financial rewards you receive for running your business aren’t even close to worth it.
Regardless, it can take time for self-employed individuals and entrepreneurs to find the strength to walk away so they can try something new or even head back to the 9-to-5 grind. And while starting a business isn’t easy, giving up the dream is often too much for some entrepreneurs to bear.
However, the painful realities of your business venture may slowly reveal themselves over time, leading you to wonder, “Is any of this worth it?” Here are three signs you can watch for that might indicate it’s time for your departure.
Your small business is not financially viable
While you may have started out with a real sense of passion for your business idea, the underlying goal of any business is, and should be, making money. Unfortunately, not all business ideas work out as planned, and it’s possible you don’t have the sales or customers to justify all the work you put in.
If the money isn’t there, or if you’re racking up considerable amounts of debt just to continue pursuing your business goals, it may be time to walk away and try something else.
You are exceptionally burnt out
If you’re an entrepreneur, it’s common to experience some level of burnout that might lead to further problems if you continue on your current path. According to a study from Harvard Business Review that measured opinions of entrepreneurship among 326 members of Business Networking International (BNI) in a region in the southwest of the United States, 25% of entrepreneurs were experiencing moderate burnout while 3% were in extreme throes of burnout at any given time.
Harvard Business Review also noted that burnout was higher in those who were “obsessively passionate” about their work. While passion is a good thing when you’re a business owner, the trait may lead to greater levels of unhappiness.
“The obsessively passionate entrepreneurs reported feeling that work was more emotionally draining and that working all day required a great deal of effort,” write the study’s authors. “They indicated feeling frustrated by their work and even that it was breaking them down.”
Self-employment is contributing to depression or other mental health issues
While some entrepreneurs are able to compartmentalize their passion and live relatively happy and healthy lives without letting mental health issues take hold, research from Cornell University shows that self-employment may lead to greater levels of depression for both men and women.
While the underlying reasons for depression vary from person to person, it’s not overly difficult to see how the pressures of self-employment — and the highs and lows of business in general — might exacerbate depression symptoms in people who might be prone to struggling already.
If your business is causing you to take on more stress than you can handle, or to live in a state of depression that makes life more difficult, it could be time to walk away.
What are your options?
Whatever the reason you decide to break up with your business, you can’t always just close the doors and see if things fizzle out on their own. Here are some options to consider that can make exiting your business less uncomfortable and more permanent.
- Close your business: If other options don’t appeal to you, you can always simply close down your business and refrain from operating it further. If your business is a corporation, closing your business will likely entail calling a board meeting, filing a Certificate of Dissolution with your state’s Secretary of State, notifying the Internal Revenue Service (IRS), and closing any accounts or lines of credit that were opened for business purposes. If your business is a sole proprietorship, however, you may be able to dissolve your business by simply not taking on any more clients and letting your business dry up on its own.
- Transfer your business: If you have a business partner or want to transfer your business to another person who can take up the helm, it’s possible to transfer your business so it can continue operating while removing yourself legally and financially from the equation. The steps for transferring a business depend on how your business is set up, and it will likely be worth speaking with an attorney to find out which forms must be filed, as well as any tax liabilities you might face upon the transfer of your business assets.
- Sell your business to someone else: Selling your business can make sense if you’ve built up considerable equity, you have merchandise and/or business equipment that has value and you believe you could fetch a good price. You can sell your business for a cash price or through an installment contract where you accept payments for your business over time. Either way, you should speak with a tax attorney to find out what the tax implications might be for the sale, as well as legal steps you could take to reduce the tax consequences that might arise from the sale.
If your business is harming you emotionally, spiritually or financially, it may be time to cut your losses and move on to something else. Breaking up with your business may be painful, but staying in a bad situation for too long can be much worse.
Fortunately, you do have options if you want to walk away. Make sure to research and explore all the potential solutions that may be available to you, and try not to be too hard on yourself.