Are Business Owners Crazy?

Quick Insight

Business is always a gamble. The key to gambling is walking away after a small loss before it spirals into a huge loss. You must know your limit. When do you need to walk away from the table? 

“Are we crazy?” a client asked me after we reviewed their financial projections.

“You have to be crazy to start a business,” I replied.

“But, are we too crazy?” he pressed.

Business is always a gamble. The key to gambling is walking away after a small loss before it spirals into a huge loss. You must know your limit. When do you need to walk away from the table? 

Later that same day, I talked with a good friend. She was coming to a decision point in her career. She called it her tipping point. A few key events would decide whether she stayed on her current path or pursued another path.

Passion for a business idea led us to the crazy idea of starting or growing our business. Taking a risk isn’t crazy. Life is full of risks. However, it’s madness to not define the most you can afford to lose. Never bet more than that in your business.

I wish you enough craziness to take risks balanced by enough sanity to know your limit. I wish you well.

- Rob Stephens

Further Insight

CFO Perspective Resources

  • Video: Break-Even Analysis - I apply break-even analysis to the decision of whether to open a new location to show how it can help you make better decisions.
  • Video: How To Avoid Business Decision-Making Mistakes - I explain some common business decision-making mistakes and how to overcome them. Learn more about dozens of decision mistakes and how to avoid them in my behavioral finance program.
  • Course: Entrepreneurial Finance - Small Business Financial Management Basics - Get a financial overview of the entrepreneurial journey from startup to operational decisions to exit planning. You’ll hear from a business banker guest speaker who explains what lenders look at when deciding whether to make a loan to a small business.
  • Course: Behavioral Finance - Overcome your destructive financial impulses by understanding common thinking mistakes. With my Behavioral Finance course, you can avoid these costly financial decision-making mistakes. The course will help you to learn science-backed ideas to make better financial decisions.
  • Course: ACE - Strategic Planning for Small Businesses - Small business strategic planning should quickly lead you from defining where you are going to deciding how to get there. Getting there takes a well-built strategy and implementation plan. Get planning and management tools with the basics of how to use them.

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