When something does not work, people rarely stop. They adjust the packaging, tweak the strategy, spend more money, and hope the next season will fix everything. In reality they are simply polishing a 💩.
Many businesses convince themselves that persistence will eventually solve the problem. Sometimes that is true. Most of the time it is not. When the numbers do not work, no amount of optimism will change the outcome.
Yet companies keep going. They keep investing. They keep explaining why the turnaround is just around the corner. They keep defending decisions that should have been abandoned months earlier. It rarely ends well.
I saw this first-hand in my wife’s jewellery business. One of the shops simply did not work. The weekly profit reports made that clear. The high season looked encouraging, but the low season losses wiped it all out. Three good months could not compensate for the rest of the year.
The numbers were telling the story. Because we had signed a lease, we could not walk away immediately. But the decision was already made. As soon as the lease allowed it, we gave notice and moved on. There was no dramatic debate. No desperate reinvention of the concept. Just a simple acceptance of reality.
If the numbers do not work, the business does not work.
This sounds obvious. In practice it is surprisingly rare. Most failing projects survive for the same three reasons: pride, sunk costs and fear of admitting a mistake.
Pride makes people defend decisions long after the evidence says they were wrong. Nobody enjoys telling colleagues, investors, or partners that the plan did not work.
Sunk costs create another trap. Once time, money, and energy have been invested, walking away feels like losing everything. People convince themselves that one more push might recover what has already been spent.
And then there is the fear of failure. Closing something feels like defeat. But that is not what it is. Sometimes stopping is the most rational decision a business can make.
There is, of course, a counter argument. Business requires persistence. Every company faces setbacks. New products struggle at first. New markets take time to develop. Early losses are not unusual. All of that is true. But persistence and denial are not the same thing.
A setback usually has three characteristics. The financial impact is limited, progress is visible, and the problem looks temporary.
You can see a way through it. A broken model looks different. Losses keep accumulating. The fundamentals never improve. Each attempt to fix the problem creates a new problem somewhere else. And the tunnel seems endless.
At that point persistence stops being resilience. It becomes denial.
One of my friends, Chris, has a wonderfully simple way of expressing it: “If it don’t make money, it don’t make sense.” The grammar may not be perfect. The principle is.
Numbers have a brutal honesty about them. Weekly profit reports, margins, and cash flow rarely lie.
They show patterns long before people are emotionally ready to accept them. The problem is rarely the data. The problem is people refusing to listen to it.
I learned that lesson the hard way earlier in my career. I stayed in a business partnership much longer than I should have. The warning signs were there, but I ignored them for too long. It cost me dearly in the end.
Failure has an interesting quality. When it hurts enough, the lesson tends to stick. Good business is not about never making mistakes. Every entrepreneur and every company makes them. The real discipline lies in recognising when something does not work. And stopping.
This matters in the toy industry as much as anywhere else. Our industry thrives on optimism. New concepts, new ranges, new trends. That energy is part of what makes the business exciting. But optimism can also blur judgement.
Sometimes a product range does not resonate. Sometimes a retail concept fails to attract the traffic everyone expected. Sometimes a strategy simply does not deliver the numbers it promised.
Yet people keep pushing. They add marketing. They adjust the range. They redesign the packaging. They launch another variation and hope the market will suddenly respond.
Occasionally that persistence pays off. Most of the time it does not.
The difference between successful businesses and struggling ones is often not creativity or effort. It is discipline. The discipline to look at the numbers honestly. The discipline to recognise when a model is fundamentally flawed. And the discipline to stop.
Business is not about avoiding mistakes. That is impossible. The real test is what you do next. Sometimes the smartest decision in business is very simple.
Stop polishing the 💩.
This article also appeared in Edition 54 of The Bugg Report Magazine
