ARCHIVED  December 1, 1996

How do you know when to give up?

Jeff Travis is scanning the classifieds, looking for a job anywhere from Cheyenne to Colorado Springs.
“I’m good with my hands,” he said, “so I’m looking possibly for something to do with computers.”

Things weren’t always like this, though. Just a few weeks ago, Travis was owner of his own business, a classic story of an entrepreneur who started from the ground up to launch a dream.
So where does it go wrong? Statistics say odds are that more businesses end up like Travis’ than don’t.
Lynn Hoffman, professor of management and director of the Small Business Institute at the University of Northern Colorado, said classic data suggest 85 percent of new businesses fail within the first year. Newer research says that number actually is 25 percent to 50 percent. Still, that leaves a huge range of numbers for budding entrepreneurs to consider.
Travis owned and operated Snapshot, a full-service photography shop at 344 E. Foothills Parkway behind Foothills Fashion Mall in Fort Collins. He provided everything from one-hour film processing to restoration of old prints to portraits.
Even though many entrepreneurs don’t succeed, they always learn from their venture and can pass advice to others.
“If we approach it as a
learning experience,” UNC’s Hoffman said, “we have a different concept of failure.”
Travis operated Snapshot for two years and four months.
“From my experience, one sure sign is when you’re looking at reports every month and have to cut, but there’s no place left to cut,” he said. “Also, if you’ve tried all the different marketing strategies for your niche, and they just don’t work, then you need to reconsider.”
And if the negative variables keep piling up, an entrepreneur likely will have to close down.
“Location is a big issue,” Travis said. “I deserve a D+ for site selection. My business depended on foot traffic. You also need businesses around you that will draw people who will see your own business.”
Travis said he wanted to move and even broached it with his landlord, but was constrained by the lease.
Along with site selection, Travis noted that his industry is not associated with the classic Maslow Hierarchy of Needs -food, shelter, safety and health.
“It’s a disposable income thing,” he said. “I was competing with Wal-Mart and Sam’s and others who achieve economies of scale that I couldn’t offer.
“People wouldn’t ask what my quality was like, but they would ask about price,” he added.
Travis said entrepreneurs need to know at what point they are entering an industry – upswing, maturity, decline or death.
“And when you’re going into an industry, you have to determine the cash outlay through pro forma statements and see what the economic outlook is,” he said. “You need to come up with a target pay-back period to retire your cash outlay. If you can’t arrive at a number, then you shouldn’t get into that industry. And if you can’t meet that target date, then you should get out.”
Hoffman noted that most entrepreneurs are very slow to get out of a business, often for reasons that hit home.
“If they signed personal guarantees, then they will lose their house,” he said.
Still, entrepreneurs must remain realistic and examine their situations objectively.
“You’ve got to pay attention to the numbers,” Travis said. “There’s a tendency to get emotional and think things will get better.”
While looking for a new full-time job, Travis continues to produce portrait work and fine-art photography. He sold high-tech photography equipment from the shop to help mitigate his loss, which will be spread over the next several years.
“This was my first venture,” he added. “It was one situation where I maybe got in a bit above my head, but I learned a lot. I want to go back (into business). You want to do it until you get it right.”
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Jeff Travis is scanning the classifieds, looking for a job anywhere from Cheyenne to Colorado Springs.
“I’m good with my hands,” he said, “so I’m looking possibly for something to do with computers.”

Things weren’t always like this, though. Just a few weeks ago, Travis was owner of his own business, a classic story of an entrepreneur who started from the ground up to launch a dream.
So where does it go wrong? Statistics say odds are that more businesses end up like Travis’ than don’t.
Lynn Hoffman, professor of management and director of the Small Business Institute at the University…

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