I've been running businesses part time on the Internet for about the last 10 years, on and off. For awhile I worked full-time at a college, and didn't do any freelancing on the side, but now I work for myself part-time only and manage to get the mortgage paid
As to when to "give up" on a business, that's an issue that depends entirely upon the details of the business. Bottom line though IS the bottom line. When the business is no longer making you any money, if you don't see things improving in the next 3 months or so, I would shut it down. Hopefully you have enough in the slush fund to keep you afloat for a couple of months anyway in case of lean times, but if the market has changed that much for you, you need to cut your losses as soon as you can.