"Mirror, mirror on the wall, who suffers the biggest delusions of them all?"
A good friend of the family came over tonight and as our children were playing in the backyard we discussed her business. Six years ago she took over the family independent shoe store from her mother. Since she's taken over the business she's expanded the bricks and morter store online. The online store is profitable and the retail store is just hanging on.
We discussed her revenue model over coffee and purely looking at revenues, costs, risks and possibilities for growth it seemed like an obvious direction. Close the retail store and focus online. By doing so she'll have a small profitable business and free up about 66% of her time. The bricks and mortar store just sucks up time and money and the macro outlook for physical retail is flat out poor in general throughout the nation. The possibilities exist for limited growth with the physical store but the risks seem somewhat high.
If she had more time and we really dug into financial numbers I'd bet we could have turned general "back of the napkin" numbers into solid financial evidence for the decision to close the physical store. For me, the decision is easy. For her it is far more complicated and it takes some looking in the mirror.
Her business is a family business and her mother had spent well over a decade building up the store. Her mother is still actively involved even today. Building the store up and decades of community service have created a strong sense of pride. The origins, the history and the strong urge to preserve tradition have bult up a cloud of sentimentality. It is the emotional part of the decision that has a heavy weight and for most of us it's very hard to separate the emotions from the logic of making hard decisions.
As we talked about the emotional aspects of the decision we laughed. Things seem simple until they're not. She pointed out that numbers aren't always enough. If everyone just looked at the numbers no one would play the lottery. The odds are ridiculous. But someone wins, all the time. The emotions are real and they can't be ignored. They are as real and as important as the financials and they need to be dealt with in a completely different way. You need to take a hard look in the mirror.
Here are some of the things to ask:
- Ask yourself if you had it to do all over would you? If the answer is no then you have all the answer you need for any immediate decisions.
- Ask yourself if you are constantly sacrificing time from family and yourself for the business?
- Ask yourself if you are making enough money to really support yourself and your family in a real way? Given the age you are at now are you meeting your broader needs like college for kids, retirement for yourself, paying down your debts, etc.
When you're younger you have the luxury of time. As you get older it all gets compressed. It's hard to make up for lost time in making money, in changing careers and especially with family and personal pursuits. Face the emotional pull of "making your business a success" against all the negative emotional consequences for the pursuit. On the scales of balance the weight should become aparent. Accept the results and act.