344. I already know the fate of the business and the odds of turning profitable, time to accept it

Could you imagine spending years building your dream only to face the harsh reality of financial strain? Join us as our gym owner guest shares his intensely personal journey through the highs and lows of entrepreneurship. He paints a vivid picture of the emotional and financial crossroads he's facing, sharing candid exchanges with his father-in-law, a telecom CEO, who offers both wisdom and tough love. As our guest reflects on the lessons learned from injecting personal funds and the looming possibility of tapping into retirement savings, listeners will relate to the poignant balance between pursuing passion and confronting financial realities.

Throughout the conversation, we explore the fundamental questions every entrepreneur faces: When is it time to let go? What truly matters in the pursuit of a dream? The episode captures the weighty deliberations over customer acquisition costs, business viability, and the true cost of perseverance. It's a heartfelt examination of what it means to hold on to a venture that once seemed invincible and the personal growth that emerges from these challenging decisions. Whether you're an entrepreneur or someone with a cherished goal, this conversation will resonate with the complexities of dream-chasing in the real world.

Transcript

Speaker 1: 0:32

All right. Well, today is the end of a month, Things are closing out and where did all the cash go? Oh man, that's been tough. We're hosting my in-laws for the weekend, so my wife's parents and he's the CEO of a small telecom company in the middle of nowhere of all places. So feel free to find that one, um.

Speaker 1: 0:59

But I've just been talking to him about, like the gym, trying to figure out what to do, the struggles, the rough nights, the equity injections we're doing, and just venting to him and I think I'm learning when people, people usually have the answer and they don't realize they have the answer. And so when I'm asking like, hey, what should I do? I could do this with the gym, I could do that with the gym, I already know the answer. I already know where I want to go, I already know what I've decided deep down, what I'm going to do. But when I talked to him about it, I'm either looking for blind spots or for validation, but I'm not really looking for anything else beyond that. And so if he told me what I already knew, then I'm just getting confirmation bias. If he sent me something novel and new, then I'm gaining new, meaningful information. But if he just listens and acknowledges, then he's going to end up saying, well, you probably know what you should do, so just go ahead and do that anyways, which is very accurate.

Speaker 1: 1:58

So, and months, probably, like three months ago at this point uh no, four months ago I told the staff like hey, there's not much runway left, the studio is going to end up closing in the next couple months. And that was when I had used up the all of the business cash, all the business capital, and then things went crazy. There was some turnover and all that drama, and then, since then, I've been injecting my personal cash into the business. I've been using my personal funds, rolling into the business funds, doing equity injections, all that stuff. It's not like business funds, it's not personal anymore, but the money's gone, and so keeping the business afloat while it's actively losing money has been something I've I've been willing to give up on. And so now, um, as I'm talking to my father-in-law, like there's only so many, I can only put personal money into the business until I have to start pulling out retirement funds, 401k funds, ira funds, and then, after a year and a half a year of of that, like everything is completely wiped out to zero.

Speaker 1: 2:58

So I'm venting to him like, hey, like, here's this, here's how far away we are from being break even, here's what it would take to be profitable, here's our personal financial situation, and at the end of it, like there's nothing novel he can bring in. He's in telecom, this is a gym. That's like a consumer product, a a consumer thing. So there's nothing. There's no like industry insights that he can bring, which is nice. But he asks about like well, okay, how much time would it take to get those new customers? What's the cost of marketing and sales to get those new customers? Would there be additional churn if you're finding new customers? And now you would lose some of your old numbers faster than normal, some of those other things, and I have the answers for it. And at the end is like yeah, I don't really see how things could pan out, and so when you could do it, you could put your 401ks into it and and go for it. But if you don't, if you yourself don't see how things could turn profitable, I don't know why it would be worth it.

Speaker 1: 3:55

Like, what would you gain from that? I feel like you. You had the desire to own a gym. You've had the desire to hire and fire and operate and handle the stressors Like you've accomplished everything you were looking for. It just cost you a lot more money than you thought it would.

Speaker 1: 4:11

And so, by keeping it open a few months longer, what else? What new would you gain from it? What additional benefits or life experience would you gain? Since you're not going to gain anything financial, what anything non-financial would you gain? Well, not really anything. I mean, it would just extend the inevitable. It would be all the more broke and all the poorer. And if, like, something happened to my family and we had to pay a hospital bill or something like what you never can plan for, happened, like we would just be all the more out of ability for that.

Speaker 1: 4:46

So I was like, well, okay, I think you know what you need to do. Then, I mean, it sounds like you've laid out the pros and cons of all your options. I don't know if there's anything new I can really identify. So I think now you just look at what you've presented and make a decision, and that's kind of where I'm at now. So I won't reveal where I'm at now, because in episode whatever you're in episode 343, 344, whatever this is, I think my mind's made up.

Speaker 1: 5:16

No, keeping the gym open and burning all of our retirement funds is not worthwhile. French has already said they'll sue us for liquid damages, which is kind of funny. They're going to sue us for not keeping my business open and not paying the royalties that they otherwise would earn by me losing money, which is kind of weird, weird. So any whatever the, the landlord will come after me, the sba will come after me. They will take all of our extravagances. So my wife's in my car are worth like fifteen thousand dollars combined, so they're not worth anything. We have our 401k funds we're using so we can retire before the age of 90, which at this point it looks like will be our retirement age.

Speaker 1: 5:57

So good luck with that. They'll take all of our extravagant cabins and rvs and boats and trailers and c-doos, which we have none of. So good luck with that. We have nothing that they could take and liquidate. They will take all of our what. They're going to take my children as slaves. I guess that's all they really have left at that point. They could take my dog. My dog is nine years old, probably worth $20 or something. But yeah, I think at this point, realizing I could be the hero, burn everything to the ground, be broke as a skunk and act like it's a valiant effort, or I can just acknowledge you know it's a business loss, it's a business bankruptcy. It sucks, but that's where we're at now, so I don't know. That's where we're going. That's rock and roll. Um, we'll go from there.