Small business answers — NOW!

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. 
Brain Trust contributor: Author of Hurdle: The Book on Business Planning President, Palo Alto Software
© 2007, Small Business Network, Inc., All Rights Reserved.
Subject to the Terms of Use of
Print this page   Bookmark this page   E-mail this page to a friend   Go back to previous page
AskJim ID: 137