The Myth of
Undercapitalization
This year more than 17 million people will become
entrepreneurs, according to the National Association of Self
Employed (NASE). By the end of the year, 8 million of them
will return to the corporate world because their entrepreneurial
effort did not succeed. Many will say the serious problem.
Many experts will say that undercapitalization is the main
reason for the failure of an entrepreneur to achieve the dream
of having their own business. They will point out that failing
entrepreneurs did not start with a large enough bank account to
offset the period it takes before a business is profitable.
Statistics always back up this theory because, sure enough, the
money has run out before the business is profitable. Therefore,
they argue, the theory must be accurate.
Hogwash!
Undercapitalization
This year more than 17 million people will become
entrepreneurs, according to the National Association of Self
Employed (NASE). By the end of the year, 8 million of them
will return to the corporate world because their entrepreneurial
effort did not succeed. Many will say the serious problem.
Many experts will say that undercapitalization is the main
reason for the failure of an entrepreneur to achieve the dream
of having their own business. They will point out that failing
entrepreneurs did not start with a large enough bank account to
offset the period it takes before a business is profitable.
Statistics always back up this theory because, sure enough, the
money has run out before the business is profitable. Therefore,
they argue, the theory must be accurate.
Hogwash!
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