Why do eight out of ten entrepreneurs fail within the first 18 months? According to Daymond John, an investor on “Shark Tank,” a big factor is money.
Too much money, that is—not too little.John says that overfunded entrepreneurs tend to buy their way out of problems and challenges that would have forced workarounds and on-the-job learning for a business owner on a shoestring budget.
Too much cash on hand can also make companies spend too much too soon, whether it’s on overhead or excess stock. Spending less keeps the company more agile and less exposed. That way, if the business doesn’t take off, the entrepreneur can avoid sinking into debt.Everyone would like to take a million-dollar idea to “Shark Tank,” but in truth, no one needs major funding to succeed. To learn more about why less is more, visit our Instaread on THE POWER OF BROKE.