554: When to Quit
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Welcome to the How of Business with your host, Henry Lopez. The podcast that helps you start, run, and grow your small business. And now, here is your host.

Welcome to the Howa Business Podcast. This is Henry Lopez. And on this episode, I'm going to explore the complex and also emotional topic of when to quit. When do we know to quit versus continuing to fight and persevere? When do we quit a project or a marketing campaign or a product line or an entire business model or perhaps anything?

an entire small business? When do we quit versus when do we keep fighting to get through to success? You can find all of the Howa Business resources, including the show notes page for this episode, and learn more about my one-on-one and group coaching programs at thehowabusiness.com. I also invite you to please consider supporting this podcast on Patreon. And please subscribe or

wherever you might be listening so you don't miss any new episodes. And thanks to a few of my recent coaching clients, including James, Patrick, and Jason and Kara. I look forward to serving as your business coach and helping you achieve your business goals. So this episode was primarily inspired by a book that I read recently titled The

The Dip by Seth Godin. I'm a big Seth Godin fan, as I'm sure many of you are, and I've read several of his books, but I didn't know about this book. It came out seven or eight years ago, I think, and it was actually recommended to me by one of my clients and friends, Ava. Ava is the owner of Maui's Finest Gifts, so thanks, Ava, for turning me on to this book. It's a very short read, so I got through it pretty quickly, and it's very insightful because it touches on this very complex and emotional topic of knowing when to

quit. So it's inspired by that and also other content and other episodes that I've created about when do we know that our business model is right or broken. And so I think those are interrelated. The Dip is a book, as I said, by Seth Godin, and it explores the concept of what he calls strategic quitting and persevering. And it emphasizes that success is

in anything, a project or a business often involves pushing through challenging periods. That's the dip, but also knowing when to quit if the effort isn't worth the reward. But that's the tricky part. If it only were that easy, how do we know if we are in what he calls a cul-de-sac, which is where we are in a dead end versus just in the dip and we need to keep fighting? That's tricky. And I don't know that there's a straight answer to that. I don't know that

The book gives us an easy answer to that, but it gives us some clues, some things to think about to determine are we just in a dip and we need to keep fighting through to get through to success? Or are we at a cul-de-sac or a dead end and we need to adjust or pivot or quarter?

Quit that idea. That's what the book is about. And I think it's such a complex and difficult subject for us as small business owners. Again, sometimes the dip could be your current business model, which I've spoken to often on this show and understanding if that's broken or not. And it could be that we find ourselves in a dip and it's as a result of a broken business model.

So I'm going to explore through that, when to pivot, some ideas on when to pivot, perhaps again by adjusting or fixing your business model, and when to perhaps continue and persevere to get through to be the best in a particular category.

There's a quote I think that's relevant here from the book, quote, extraordinary benefit accrues to the tiny minority of people who are able to push just a tiny bit longer than most, end quote. And so that's the idea here that he puts forth and that makes sense. And I have found to be true that we do need perseverance. We do need to be able to outlast the competition sometimes. We do need to be able to give it our best effort and not quit when it gets hard.

hard. I see that so often with people who are trying to start a business, but it's easy, relatively speaking, when you're in the more exciting phases of an idea and thinking about it, but then the hard work starts or then you start your business and it doesn't quite grow as rapidly as you had projected. Well, that might be that you're in that dip and we got to fight through. We got to continue to persevere to get through and be successful.

So to further define the dip, it's that critical low point in anything that we pursue that is the separation between success and perhaps from failure. This is the definition in summary that Seth Godin gives in the book, The Dip. The dip is a challenging period.

between starting something and mastering it. So think about that, between starting something and mastering it. Mastering it could mean that you're good at that particular skill or task or whatever it might be, but it also could be at a higher level, mastering your business, being the best or first or second place in a particular marketplace. And it's so that's that temporary setback that separates those who persevere and succeed from those who quit too soon.

So that's what makes it even more difficult. Is it something that I need to quit and do something else or am I quitting too soon? Boy, that's a hard question, right? But that's what we're challenged with as business owners. So it's the point where effort increases. We have to increase our efforts to get through the dip, but the rewards are not visible yet. We don't know what's on the other side. And the key is recognizing again, whether you're in the dip

which leads to long-term success if you will continue to fight through it, or a dead end, what he calls in the book a cul-de-sac, where quitting is the smarter choice and then doing something else with that resource, your time, your money, your people, whatever the situation might be. So this concept of

quitting in the dip or being in the dip and deciding whether you quit or not is about strategically quitting dead-end pursuits while pushing through challenges that lead to long-term success. So determining where are we in a dead end

just to dip. Now, this is different, you know, as I thought about this is, is this the same as what they say all the time, failing fast, you got to fail fast. Well, there's a difference here. The startup philosophy of failing fast encourages us to make rapid experimentation, learning from failure, the MVP approach, and then quickly abandoning ideas that don't

work. That's different. That's a different situation. The dip is about focusing on perseverance when the payoff is worthwhile, at least that we estimate that it's worthwhile, while failing fast is about quickly identifying and eliminating flawed ideas. So entrepreneurs should persist through the dip when success is achievable, but quickly

quit or pivot quickly if the business model is fundamentally broken or the idea, as it turns out, is flawed once we've had a chance to test it and validate it. So the key is knowing whether you're facing a temporary challenge or an unsustainable dead end.

And I have to tell you, there's no book, there's nowhere where we get an exact answer on this. This is why this is hard. And this is one of the reasons not everybody goes into business ownership. What we end up doing sometimes as business owners, or actually more than sometimes, often I observe, we continue fighting in the face of something that's just not going to work. And often that's because the business model is broken.

It doesn't allow for profitability or at least sufficient profitability. And then it doesn't allow you to scale beyond yourself, let's say. But we keep fighting because quitting is failure and none of us like to fail. And so that's one of the reasons, probably the primary reason why this is so hard.

So Seth Godin says in the book about this, quote, the dip is the long slog between starting and mastery, end quote. And so recognizing the dip is essential to deciding where do you go next as a business owner and an entrepreneur.

So if the dip is that long slog between starting and mastering or achieving success, a cul-de-sac, again, is a situation where you work and work and nothing much changes. There's no progress. There are no small victories. And so that leads to exploring a little bit

more about how do you know when you're in the dip and you need to keep going versus you're at a dead end or in a cul-de-sac. So the work is getting harder when you're in the dip, but you're still making progress. You see that you're making progress. And sometimes that's

a feel, but you know that you're making some progress? Are you seeing incremental improvements or wins, even if they're small? Do successful competitors or role models in your field confirm that this is a normal phase? So you might get some validation, whether external or from your mentors or coaches or partners or

or others that you depend on. That's one way. Is there a clear long-term payoff to the path that you're on? So if you push through, if you continue in the dip, will this lead to a significant advantage? You still believe that. Or

achieving that market position or personal mastery of this as something personal? Or will quitting now mean wasting that momentum and effort that you've already built? If you still believe in the mission and see a future in the path that you're on,

but you're in the dip, then again, ask yourself, do you feel that passion or conviction for the end goal? How does it feel to you about whether you're on the right path or not? Would you regret stopping knowing that success was possible with more effort?

And are your setbacks, are they fixable with adjustments, not necessarily a sign of a completely broken process or model? Can you approve or slightly adjust your approach, maybe your marketing, your pricing, your sales strategy, instead of abandoning the effort entirely?

Are others succeeding in this area, proving that it is possible? That might be another indicator that you're just in the dip and you need to keep working at it, keep fighting. So are you also, are you willing to do the work required to reach the other side? Do you have the energy? Do you have the resources? Are you still committed to that effort, even though it's extremely hard? And again, you've got to have the resources. That sometimes is why we have to

to quit is we simply don't have the resources, time, money, energy to push forward, to continue pushing forward. If nobody else is succeeding in that particular idea or field or venture or segment,

then maybe you're not in the dip. Maybe you are in a cul-de-sac. That's something to look at. If you keep investing all of that effort, that time, money, and energy, and nothing improves, and you make no adjustments to change that, then you may well be in a cul-de-sac or a dead end. If there's no meaningful reward to pushing through, then again, you're probably in a cul-de-sac and

quitting or a significant pivot is probably the smarter choice. So it's about asking yourself, am I struggling or is our team struggling or is the business struggling because this is hard but worthwhile or because it isn't working at all? If the answer is hard but worthwhile, then you got to push through. You're in a dip. If the answer is no progress, no payoff, you don't see a path forward, then it's time to quit

that strategy, that tactic, that business model, or maybe even that entire business.

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Now let's look at this from the perspective of what are the potential benefits that we might be able to realize as small business owners of quitting the dip. Quitting because we believe we're in a cul-de-sac or a dead end as opposed to being in a dip that we need to keep working through. So Seth Godin in the book, The Dip, emphasizes that quitting isn't failure. It's a strategic move when we apply it correctly. Now,

that's easy for him to say. It nonetheless still feels like failure to me, but I understand what he's putting forth here. And so quitting the wrong pursuits, of course, which is what we're focusing on here, it can lead then to greater success, efficiency, or fulfillment. For small business owners, quitting at the right time can provide several potential benefits. One is freeing up resources for more promising opportunities. It's an opportunity cost.

That time, money, and energy, those things are limited resources that we have as small business owners. It might just be you or you and a very small team, certainly probably a small budget. So quitting an unproductive effort allows you to redirect that energy, that time, that money towards something else that might be productive.

a different business model altogether, a different product line, a different market, something with higher potential. So you might've been spending months, for example, trying to compete in an oversaturated market because that was ideally where you wanted to be, but it might be to your benefit to shift completely

completely and quit that market and shift to something else that you've now identified, another market or niche that's underserved. So the quote here that applies from the book is, quote, quit the wrong stuff, stick with the right stuff, have the guts to do one or the other, end quote. The other potential benefit is eliminating that sunk

cost thinking. Maybe you've heard that term before, but a lot of business owners will hold on to, and I'm guilty of that as well, to failing ideas too long because you've already invested time and money. And so strategic quitting helps us avoid, if we think about it that way, helps us avoid that emotional attachment that we might have to sunk cost thinking.

and encourages us instead to make more rational decisions about the project or the idea or the business. So for example, a business owner may have well spent thousands on a product that just isn't selling, but if demand isn't there, it's better to cut losses early than to keep throwing money at it. Another potential benefit of

quitting is that you can instead focus on what you can be the best at. Not all pursuits lead to mastery. If your business model, for example, doesn't have a clear path to becoming the best in your niche, or at least second place in your niche, in your market, in your segment, then quitting might allow you to pivot into something that has more potential benefit.

A great short quote here from Seth from the book on this, quote, quit or be exceptional. Average is for losers, end quote. And yet another potential benefit is avoiding burnout and frustration. When you stick with a dead-end idea or project or business, it drains motivation, of

course it drains your finances and even your personal well-being. Knowing when to quit or making that decision to quit because you're at a dead end preserves that mental and financial health and it gives you the freedom now to pursue with energy a business or an idea or something else that better aligns and leverages your strengths. So you know a small business owner who might be working 80 hours a week with little financial return on a business might be better off that you quit

that model and start fresh with a leaner, perhaps more scalable business. Because remember, if it's not going to generate sufficient profits, and if it's not scalable, you probably have a broken business model. And then the other benefit that comes from quitting a dead-end business

is that quitting opens up room for creative reinvention. When one idea isn't working, stepping away can lead to new insights, new markets, as we talked about, new segments, entirely new ventures that would have been overlooked and that certainly you would not have been able to pursue if you're still slogging away in a dead-end situation.

So strategic quitting isn't about giving up. It's about cutting dead weight. It's about ending those projects or maybe even an entire business and focus on what truly matters, what's going to produce those results. As small business owners, we should quit what isn't working, refine what has potential and push through the dip only when there's a clear path to success.

And I understand that sometimes we don't see that and we need a little bit of time in that dip to realize whether there is or isn't a clear path to success.

I've mentioned that I've spoken previously about this concept of, is your business model broken? And if you haven't already, I encourage you to listen to episode 532 titled, Is Your Business Model Broken? On that episode, I explore this question of how can you tell if your business model is broken and how can you fix it? So if the dip that you're in

If it's because of a broken business model, then you're at a dead end. You're at a cul-de-sac. No matter how hard you keep trying and how much more time and resources and money you might put into your business, it's not going to get to success. You're not going to achieve success because the business model is fundamentally flawed. That's an example at the highest level, our entire business, when we need to quit. Now,

quit can be interpreted and applied many different ways, but certainly it should mean at a minimum that we need to examine our business model and perhaps completely shift or adjust the business model. And so what does that mean? In that episode, I defined what is a business model, but to put it concisely here, a strong and healthy business model supports a small business that is consistently and sufficiently profitable and that can scale. So beyond that episode, I've done a few other more

detailed episodes. Episode 537 is your business profitable, which is one of the components of a healthy business model. Episode 539 is your business scalable. Can it grow? In particular, can it grow beyond just you? And then finally, episode 540 is your business model competitive. Can you compete with

against others? Do you have a differentiator or are you just a me too? Is your offering ubiquitous in the marketplace or are you able to differentiate and therefore seek a premium for what you offer? So those things are critical to helping us determine, are we in a dip? Do we still have a solid business model that allows us to be competitive,

to scale beyond ourselves and to be profitable, sufficiently profitable. It's got to make sense financially for us. And so that is a key component to determining, are we in a dip and we need to keep fighting or are we at a dead end or a cul-de-sac and we need to quit?

So understanding this concept, it really is the difference often between successful and not so successful business owners and entrepreneurs. If we are in a dip, pushing through for a payoff is what makes sense. You got to fight through that hard part. If instead,

you identify that you're in a cul-de-sac or a dead end, then it's time to pivot. It's time to adjust or time to quit. I encourage you to read the book, The Dip by Seth Godin. It's a short read, an easy read, and I think it'll give you a lot of insights into this concept, which is so critical for us as business owners. Because remember, it's not just

necessarily applied to the entire business, but at a more micro level, it could relate to a particular project or an initiative that you're determining whether it still makes sense or not. This is Henry Lopez, and thanks for joining me on this episode of The Howa Business. I wish you the best as you start and grow your successful and profitable small business. I release new episodes every Monday morning, and you can find the show anywhere you listen to podcasts, including The Howa Business YouTube channel and at my website, thehowabusiness.com. Thanks for listening.

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