How long should a business put up with losses?

In such circumstances, it often is difficult to dispassionately evaluate the results & decide whether a business, which is currently generating losses, needs time & effort to be turned around or whether a stop-loss needs to be applied, without much delay.
For anyone to address this predicament with clairvoyance, it is important to get down to some business basics. Why does a business need to be at a loss for some time? This is because it is nearly impossible to set up any business with nil fixed costs & therefore a threshold volume is necessary for the gross margins to accumulate to the level required to set off the fixed costs. And it takes time for volume to reach that level. Trying to do this in a tearing hurry by reducing prices ( beyond a sustainable level ) is self-defeating because this exponentially increases the threshold level of volume required to break even. And, subsequent changes to pricing are normally detrimental to future business.
How long therefore should a business ideally take to break even? There are no hard & fast rules for this. It of course does depend on the entrepreneur’s “staying” power – ie his recourse to finance. But, even assuming that this is not an immediate impediment, should he keep perpetually delaying the stop-loss? The answer is no.

The volume growth has to be carefully observed. In most situations, volume growth comes from a mix of repeat buys & new customer acquisitions. If the repeat purchase is high, it shows that the value proposition has promise & needs further nurturing & time. In products or services where repeat buying is not frequent, then the closest surrogate to this is new customer referrals, from existing customers. If that is high, it again shows the promise of the value proposition. If, on the other hand, repeat purchase ( or its surrogate is low), it is time to get back to the drawing board & rejig the value proposition. No point continuing as such, as it will just result in the accumulation of losses. Better to apply a stop-loss & get the necessary rework done, before re-hitting the market.
Unless a business is a pure platform model, it makes no business sense whatsoever to keep bleeding the P&L, in the hope that additional volumes will, at some future point in time, erase the cumulative loss. That does not happen in most business models where regular business economics operate – ie, the gross margins accumulated from each transaction must outweigh the overall fixed costs. Having a digital sales channel does NOT transform a business model to a pure platform one.
An entrepreneur needs to clearly understand the model of his business & make a decision on applying the stop-loss accordingly. Most entrepreneurs mistake their business model to be a platform one & continue to bear losses when it makes no sense to do so.