Sometimes the better part of wisdom is to know when to quit in a new business, a new study has concluded.
The study conducted in the Oregon State University found that even though persistence is a key to business success, entrepreneurs might be more successful if they not only knew when to start a business and take risks, but also knew when to abandon it and find something that provides a greater opportunity.
Researchers said that it may be human nature to want to make an idea work, but it can also be a poor business decision to stay wedded to an idea if the evidence suggests it's not working as well as another potential opportunity.
Bobby Garrett Jr., an assistant professor of entrepreneurship at Oregon State University and co-author of the study, said that entrepreneurs need to balance that desire to persist, which is in fact what often makes someone a successful entrepreneur, with the ability to sense when it is time to walk away.
The results are published online in the International Small Business Journal.
Garrett and lead author Daniel Holland of Utah State University analyzed the decision-making process of 135 entrepreneurs in high-tech industries.
They found that even when confronted with another business opportunity that could yield successful results, many entrepreneurs resisted quitting their current venture.
In their study, the researchers recommend that any potential entrepreneur keep the risk versus reward of any venture in mind, and evaluate the chances that their start-up may succeed.