Posted on: Monday, October 02, 2006
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Shoestring ventures are not only the creation of entrepreneurs with few dollars to invest, but are equally the creation of people who can invest more but intentionally choose to start with less because they want to risk less. But even shoestring entrepreneurs can lose a bundle when they lose sight of their objective and begin to make irrational investment decisions.
Typically their investment policy is ill-defined to begin with and totally abandoned once the business is under way. It's easier to throw money rather than objectivity into the cash-hungry start-up. "Unbridled enthusiasm can wreck you financially," admits Pat Dwyer, who parlayed an expected $10,000 investment into a $125,000 loss. Pat's story is one that is all too common amongst new business start ups so be sure to starting calculating losses straight from the starting gates.
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Starting A New Business: Minimize Your Losses
While optimists always ask how much they can make from a venture, realists ask how much they can lose. And the answer, of course, is in how they formulate and control the investment decision. That too is what starting smart is all about.Shoestring ventures are not only the creation of entrepreneurs with few dollars to invest, but are equally the creation of people who can invest more but intentionally choose to start with less because they want to risk less. But even shoestring entrepreneurs can lose a bundle when they lose sight of their objective and begin to make irrational investment decisions.
Typically their investment policy is ill-defined to begin with and totally abandoned once the business is under way. It's easier to throw money rather than objectivity into the cash-hungry start-up. "Unbridled enthusiasm can wreck you financially," admits Pat Dwyer, who parlayed an expected $10,000 investment into a $125,000 loss. Pat's story is one that is all too common amongst new business start ups so be sure to starting calculating losses straight from the starting gates.