If you have no exit then you can never get out

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Unformatted text preview: ” (starting the business without start-up capital) is much harder for product businesses than service businesses. THE START-UP CURVE AND RISK TO INVESTMENT The lines show the cumulative cash positions for two start-up product companies and a start-up service company. The product companies risk more than the service company. CHAPTER 4: STARTING A BUSINESS 4.11 SUCCESSFUL PRODUCT START-UP FAILED PRODUCT START-UP These two tables demonstrate the difference in cumulative cash and the money at risk between a successful product start-up and a failed product start-up. HURDLE: THE BOOK 4.12 ON BUSINESS PLANNING SUCCESSFUL SERVICE START-UP The successful service start-up requires less cash in any month than a product company, and so there is less money at risk. Summary I’ll always remember a talk I had with a man who had spent 15 years trying to make his sailboat manufacturing business work, achieving not much more than aging and more debt. “If I can tell you only one thing,” he said,“it is that you should never leave yourself without an exit. If you have no exit, then you can never get out. Businesses sometimes fail, and you need to be able to close it down and walk away. I wasn’t able to do that.” The story points out why the U.S. government securities laws discourage getting business investments from people who aren’t wealthy, sophisticated investors. They don’t fully understand how much risk there is. Please, as you start your business, make sure that you understand how easily money invested in a business can be lost. If I could make only one point with budding entrepreneurs, it would be that you should know what money you need and understand that it is at risk. Don’t bet money you can’t afford to lose. Know how much you are betting. CHAPTER 5: GROWING YOUR BUSINESS Existing businesses should use effective business planning processes to control their destiny, set long-term objectives and vision, and manage the steps towards their future in an organized, strategic, and managed pr...
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This note was uploaded on 01/26/2014 for the course BUINESS 102 taught by Professor Unknown during the Winter '09 term at University of Phoenix.

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