Andriy Azarov knew very early on that his business was failing. He wasn’t making any money. The CEO of Ottawa-based gift and flower etailer CanaFlora (No. 22) was hungry to build a company. In early 2008, only a year after immigrating to Canada from Ukraine, he quit his job at a flower wholesaler and hung out his shingle to design websites for the only buyers he knew in his new country: flower-shop owners.

The move was a total flop. He had a decent website in his portfolio, so he decided to transform it into an online hub that sold flowers on behalf of growers. That worked better. A year or so later, when the reselling model didn’t prove profitable enough for his liking, he shifted course again, making CanaFlora a blossom grower, too.

In Azarov’s case, the need to change was immediately obvious. More often, the signs are subtle. Especially in a startup’s scrappy early days, there’s a fine line between “paying your dues” (read: working incredibly hard for very little) and toiling at something that’s going nowhere. A good sign you need to shift is a change in your physical well-being. If you feel a level of frustration beyond the normal stresses associated with the “tsunami of to-dos,” it’s a sign that your business isn’t working, says Clarke: “When you get that nauseous, gut-sick feeling, something has to change.”

You also should look for signs—any signs—that your initial plan is working. If you don’t see them, it’s time to re-evaluate, says Dave Mason. When he and Andrew Carey started Oakville, Ont.-based Shift IT Solutions Inc. (No. 41), their goal was to serve very small clients—and they were willing to do whatever was asked of them. They made educated guesses about what their clients would want and how they’d want it, and “we soon found out we’d gotten a lot of those assumptions wrong,” says Mason. The clients proved more price-sensitive than anticipated, and also were tougher to sell to. “We were getting fewer meetings with tougher prospects. And when we did sign them, the dollars weren’t enough for us to operate on,” says Mason.

So, he and Carey started targeting larger firms. They also ditched their founding “do anything the client wants” ethos and started offering one core IT-service package. Shift IT now has fewer clients, but its top line has improved considerably—revenue grew by 454% in the past two years.

“It’s easy to end up with confirmation bias,” says Mason. “You keep telling yourself you’re on the right path and, if you just keep working hard at it, it’ll work out. But if you take an honest look at the actual data, and understand that your assumptions may have been incorrect, you can change the model to get a profitable business out of it.”

Unbiased eyes are essential, agrees Michele Romanow of Toronto-based (No. 3), whose firm has evolved from a basic daily-deals website into a multi-faceted ecommerce platform. She and her co-founders, Ryan Marien and Anatoliy Melnichuk, have learned not to believe their own hype. “Even if you have very good data, when you’re in love with an idea, you can come up with all sorts of reasons why your data isn’t cooperating,” says Romanow. That’s why you need to call in outsiders.

“When you’re just consulting with internal stakeholders, there’s a real danger of groupthink,” says Jeff Dennis, entrepreneur-in-residence at Fasken Martineau DuMoulin LLP. “Everyone’s in the trenches; there’s a prevailing private logic. You need people who’ve seen other things in order to bring perspective.”

Murray suggests seeking out people who know you, your industry and its nuances, and have spent enough time with you to speak candidly. And, no matter whom you choose as advisors, it’s crucial not to let that old bugbear—ego—sway you. “When someone says, ‘Your idea is not good enough,’ there’s an instinct to respond with ‘Who are you? Of course it’s good enough. I’ve sweated blood for it,’” explains Murray.

But remember: these are people whom you trust to be frank. You can’t keep your feelings from being hurt, but you shouldn’t ignore what the advisors say, either.

Loading comments, please wait.