Understanding startup losses
Why is there so much loss at startup?
From a full stop, it takes more gasoline for a car to go the first quarter mile than it does to go the second quarter mile. Correspondingly, a new business with one-time start-up expenses and little or no customers is like that car getting rolling.
The reason so many start-ups fail is because they don't begin life with adequate initial capital to cover the early losses until sales volume and operating efficiency can be achieved.
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