Business Tip Vol. 7 - Capital

I believe one of these largest causes of business failures is lack of capital.

Most entrepreneurs enter into business without enough capital to cover their business up to stabilization, weather downturns, and allow for expansion.

Notice that no where in that did I mention financial capital specifically. Granted financial capital is a must but have you considered emotional and trust capital as well.

Many times, you may need to attract "trust" capital via help from trade creditors, banks, and customers. Are your relationships such that you can go to these groups in a time of difficulty?

In addition, owning a business is stressful. Do you have enough emotional capital with loved ones to get their support in difficult times?

When looking at a financial balance sheet, a well capitalized business will have at least two dollars of capital for every dollar of liability. Do you have the same ratio from a trust and emotional standpoint? You might find that subjective capital ratio more important than the financial one.