Our “breakeven baby” is taking too much energy and focus. Help!

Dear Aunty B,

I am part of a team of fantastic individuals who started a business three years ago at the height of the GFC.

People told us we were mad but we have proved them all wrong and shown that a young bunch of people can pull off success.

But the company now looks like splintering because we can’t resolve several key issues. Our biggest problem is that the business we started with has ended up as a major part of what we do, but it will break even at best and never make us any money. It would be fine to carry it if we were a big company as it has some benefits including economy of scale. But several new products that we have since developed have far more potential and have made us money from day one.

I want to drop our “breakeven baby” as we privately call it, as it takes an enormous amount of energy and focus. But one of the founders who is also CEO was the main force behind its development and he is very attached to it. He keeps blaming the economy, an uneducated marketplace and even our sales staff.

It is getting incredibly irritating and if you bring it up with him he acts as if you are being disloyal and personally attacking him. We are at a stalemate.

Stuck and in need of help!
Sydney

Dear Stuck and in need of help,

Accountants and investors… put your hands up if you have come across this scenario before. Thought so. A forest of hands just shot up across Australia.

What you are dealing with here is nothing more than the ego of an entrepreneur. Couple that with another entrepreneurial trait – overoptimism – and you have the lethal combination. An overly optimistic egomaniac who won’t face facts.

Now don’t get me wrong. Overly optimistic egomaniacs, when they are onto a good thing, are hugely successful. For a start it is the optimism that causes them to quit their day job and strike out on their own, backing their own self-belief that they can do it. They also use this belief to enthuse and recruit others.

But where they fall down is that their optimism can blind them to facts. Their passion for their “baby” means that they keep trying even in the face of harsh cold facts to turn things around. They will blame anything for the state of play and throw good money after bad in order to try and salvage a bad situation.

Here is what you should do. Suggest he take the product, leave the company and start a new business based around that. If he declines, then get him to agree to a time frame. If the product does not achieve so and so by this date you will take it off the market. Be stern.

Be smart,
Your Aunty B

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