“Just a few more months. Just a bit more money. I can’t give up now, after everything I’ve put into it.”
That approach can save a good business going through a difficult period. It can also keep a project alive for years while it eats away at your savings and an ever larger part of your life. The problem is that, from the owner’s perspective, the two situations can look very similar.
Especially when they describe the company as “my baby”.
After twelve years of running businesses, I understand where that attachment comes from. I have also seen entrepreneurs use it to justify further decisions in businesses with no visible future, then pay for those decisions with their own money and health.
So it is worth examining where this metaphor leads us. A child deserves care regardless of what they give in return. You should expect a business to support itself and pay you for your work.
The most expensive sentence: “But I’ve already put so much into it”
Suppose you have spent two years developing a new service. You bought equipment, built a website and invested hundreds of hours. Customers enquire, but few buy. The ones who do require so much work that making a profit is difficult.
Someone suggests changing the offer or withdrawing it. You immediately remember all the evenings you spent on the project. Suddenly, giving up feels like wasting those two years.
Psychology describes this mechanism as the sunk cost effect: an earlier investment makes us more inclined to continue. Even when the prospects are poor and logic suggests that continuing makes no sense. [1]
But you will not get those evenings back. Spending more money will not, in itself, make the previous spending pay off. You could lose another year in which you create nothing more valuable.
Your time, energy and attention are limited. If you spend them keeping a corpse alive, you will not create anything new in the meantime.
So before your next important business decision, ask yourself: if I did not own this company today and knew its current situation, would I want to take it on under these conditions?
Take account of what you already have. Equipment can be used differently, customer relationships have value, and what you have learnt can help improve the offer. But the history of your sacrifice alone should not determine where you put your next investment.
How do you know whether to keep trying?
This is the hardest part. New businesses often need time, and withdrawing at the first problem can kill a good idea. So how do you distinguish persistence from stubbornness?
I would start by asking: what exactly needs to change, and why should it work this time?
“We need to try harder” explains very little. “Customers are buying, but the scope of the service is too broad for the price. We’ll test a smaller package” gives you something you can actually test.
Then I would set the terms of the test:
- What exactly are we testing? One meaningful change whose impact we can assess.
- How much can we commit? Both money and the owner’s time.
- When will we assess the result? The deadline should allow for the actual time needed to sell and deliver.
- What result will we consider sufficient, and what will we do if we do not achieve it?
For example, we sell a new package over an agreed period, stay within a defined budget and check whether the amount left after delivery costs meets our target. We also count the time spent winning and serving the customer. More enquiries can look encouraging even while we are still losing money on every job.
There is no single number or deadline that suits every industry. What matters is agreeing on them before the test. If you move the boundary after every failure, there is effectively no boundary at all.
New information can justify further investment: customers have started buying, the return on each job is improving, or you have removed a specific obstacle. It is worth having more than the hope that next month will finally be better.
Attachment can drown out customer feedback
A customer says: “I don’t understand why I should pay that much for it.” The owner hears: “I don’t appreciate all the years you’ve spent on this.”
So they start explaining the cost of the equipment and preparation. But the customer is trying to work out what they will get for their money.
Would you:
- pay more at a bakery simply because the owner had bought a new oven they had always wanted? You would probably first want to know whether it made the bread better.
- pay a mechanic more because they had bought new vehicle lifts? If your car was repaired just as well as before, probably not.
Customers look at your business in the same way. Your investment can matter to them if it translates into value they need. Customers really do not care what you do in itself. They care about what they will get out of it.
When you take an assessment of your offer as an assessment of yourself, it becomes difficult to listen calmly. It is easier to decide that the customer knows nothing than to check whether perhaps we have failed to get something right.
This attachment has even left an interesting trace in research. A small fMRI study found certain similarities between the responses of strongly attached entrepreneurs to their own companies and those of fathers to their own children. [2] Published in Human Brain Mapping, the study compared 21 entrepreneurs and 21 fathers. They viewed images relating to their own company or child while the researchers measured their brain activity. Strongly attached entrepreneurs showed some similarities to the fathers’ responses.
So I understand that criticism can hurt. Still, it is worth asking what the customer is comparing your offer with and what they feel is missing. Their answers may contain the solution to the problem.
The company grows, but you still do everything
A similar problem arises with delegation. You hire people but check every message. You correct tiny details. At the first mistake, you take the task back because, after all, doing it yourself will be quicker.
The team learns that asking the boss is safer. You have more and more work and become increasingly convinced that nothing functions without you. The arrangement supplies its own evidence that you are right.
Before saying “Nobody will do it as well as I do”, check what “as well” means. Is it about the result that matters to the customer, or about doing everything exactly your way?
I would start by handing over one recurring area of work, with a clear expected result and an explanation of what the person can decide independently. Then you need to give them a real chance to take responsibility. Learning to work independently is difficult when the boss takes the controls back at every opportunity.
What is your life worth?
A company can look profitable until you count the owner’s work. You have PLN 8,000 left each month, but you work 250 hours. That is PLN 32 an hour, before taxes and social contributions if those have not already been deducted. On top of that, you are risking your own money.
If someone posted that offer on a job board, it would become a viral meme.
Perhaps you are consciously choosing this phase because you are building something with potential. But it is worth spelling out that potential. Simply owning a company does not make this arrangement good for you.
Work can also be satisfying while taking up more and more space, until resting starts to make you feel guilty. In a study of people working in entrepreneurial roles, obsessive passion was associated with greater burnout. [3] Commitment needs boundaries too.
If every weekend and all your personal savings are available to the company, its real cost may be much higher than the accounts show.
Your children may have a different plan
Attachment to a company can affect relationships with your actual children too. A parent spends years building a business, assuming someone in the family will want to take it over. To the parent, that is a natural continuation. To the other person, it may be a commitment they never chose.
In the edition of the GUESSS survey described by Poland’s Family Business Institute, 8.1% of the surveyed potential successors said they wanted to take over the family business. The survey covered students from business-owning families, with a Polish sample of 1,471 people. [4]
So it is worth asking a simple question: have you talked to your children about what they want? If their childhood mainly involved an absent parent and tense dinner conversations, the company logo may mean something very different to them than it does to you.
A company can have a future with someone outside the family at the helm too. Your children have the right to choose different work, even if you have spent thirty years building a business for them.
Are you keeping the business alive simply because you created it?
It is worth reviewing your offer and projects with that question in mind sometimes. Without the obligation to prove that every earlier decision was right.
Perhaps you need to withdraw one service so the others can start making money. Perhaps you need to hand some decisions to someone who has been ready for them for a long time. Or perhaps you need to end a project before it consumes resources needed for a better idea.
Before making that decision, show the numbers to someone who can challenge your assumptions. Especially if you respond to questions about the future by explaining how much you have already sacrificed.
I want to run businesses that give me satisfaction and leave room for life. For that to be possible, I need to retain the right to change my mind. Even about an idea I was once very proud of.
That is what I wish for you and for myself.
Sources
[1] Arkes, H. R., Blumer, C. (1985), “The psychology of sunk cost”. Research into how prior investments influence decisions to continue an activity. Original study.
[2] Halko, M.-L. et al. (2017), “Entrepreneurial and parental love—are they the same?”, Human Brain Mapping. An fMRI study of 21 entrepreneurs and 21 fathers, all male. The findings do not establish that the two bonds are identical. Original study.
[3] de Mol, E. et al. (2018), “Predicting Entrepreneurial Burnout in a Moderated Mediated Model of Job Fit”, Journal of Small Business Management. A sample of 326 people working in entrepreneurial roles; statistical association does not establish causation. Original study.
[4] Poland’s Family Business Institute, “Barometr Sukcesyjny”. Summary of the GUESSS survey.
Frequently asked questions
What does treating your business like a child mean?
It means closely tying your identity and self-worth to the business. Attachment becomes a problem when it prevents honest assessment, acceptance of feedback or the closure of an unviable project.
How can you distinguish persistence from endless financial support?
Define what you are testing, your investment limit and a review date. Continuing should be supported by new evidence, such as better margins or paid orders, rather than previous sacrifice alone.
What are sunk costs in a business?
Sunk costs are past expenditures that cannot be recovered. Further investment should depend on future costs and benefits, including the remaining value of equipment or other resources that can still be used.
How can you check whether the business pays for the owner's work?
Track time spent on sales, delivery and management. Compare it with the amount remaining after costs, keeping taxes, payment for your work and the return on invested capital distinct.
Why do business owners struggle to delegate?
Owners often compare other people's work with their own method rather than the agreed outcome. Start with one area, clear quality standards, defined decision-making authority and a review date.
Does closing a project mean the entrepreneur has failed?
Closing a project can limit further losses and release resources for better opportunities. Assess alternatives, obligations and closure costs first, rather than deciding solely on emotion.
