My business journey in Estonia took many twists and turns along the way, but one moment that seemed insignificant at the time made a huge difference several years later. It happened in a sauna with a businessman who called himself “Elvis.” We got chatting and Elvis warned me to never commit to a deal if Finnish businessmen showed interest, as they always enter the market too late.

Fast forward several years and that casual conversation came back to me when a Finnish private equity firm wanted to buy one of my businesses. My property development firm was booming. I was running around London lining up investors for a property fund, and I wanted to purchase a publicly traded company in Helsinki. That sauna conversation came flashing back, and alarm bells rang in my head.

With only a hunch, and despite an explosive market, I made the sudden decision to fold and sell all my businesses one by one. Just as the last business sold in 2008, the crisis hit, and the economy crashed. The music stopped, and I was out when the values plummet. I was suddenly a guru.

You may think that Elvis’ sauna tip-off was just luck, but there are actions you can take to make sure you get out at the right time too.

Know how much you can lose
Decide in advance how much you can afford to lose, and stick to that commitment. It’s good to be persistent – if your idea isn’t working at first, don’t give up, but learn from your mistakes, change the way you are doing things and try again. However, this can easily roll into doggedness, which – like insanity – means doing the same thing over and over and expecting the results to be different. Set yourself a limit – of money, of time, of energy – and don’t overstep it.

Don’t drag it out
When you reach your limit, get out immediately. Losing takes its toll, both emotionally and financially. It’s better to stop early, regroup, and start again rather than endure a lingering death. Don’t fall into the trap of trying to prolong the process, whether through guilt towards your stakeholders, fear of ridicule, pride or anything else. Just cut your losses short.

Don’t make excuses
People become emotionally attached to their businesses, so they hold on and continue to throw good money after a bad idea. They had a reason for starting their business in the first place, and they struggle to admit that they were wrong. They find all sorts of reasons why the business could still work out well: but it usually doesn’t. If you can take failure on the chin, you can learn from it and move on more quickly to a business that works.

Be honest
If your business isn’t making money – if you must constantly subsidize it with more funding – don’t fool yourself, your investors, or your bankers into thinking it will turn around. Tell the truth. It’s better for everyone to know what’s really going on. This builds trust, and it’s the right thing to do. It’s not a failure to be wrong and shut down your business. The only failure is not getting out when you should.

Leave fear behind
Fear is what stops many people from starting a business in the first place, but it also makes people reluctant to stop, regroup and start again. One failure is not the end of your entrepreneurial ambitions. Think of the cliché that you have to fail to succeed; and see the folding of your business as a temporary diversion on the road to bigger success.

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Paul Oberschneider is The BIG CHANGE Entrepreneur. He is a successful entrepreneur, speaker and the best-selling author of new book, Why Sell Tacos in Africa?, published by Harriman House. For more information or to download four free chapters go to www.pauloberschneider.com