Asked by ERICA ROSENBAUM on May 07, 2024
Verified
The primary reason that first-time entrepreneurs run out of cash at a faster rate than they bring in customers and profitable sales is that they have not focused on the right opportunity.
First-Time Entrepreneurs
Individuals starting a business for the first time, often facing unique challenges and learning experiences.
Profitable Sales
Transactions that result in excess revenue over the cost of goods sold (COGS) and other expenses, contributing to the financial gain of a business.
- Grasp the critical factors leading to financial failures in startups, emphasizing the identification and focus on viable opportunities.
Verified Answer
TG
Thalia Gonzalez
May 13, 2024
Final Answer :
True
Explanation :
First-time entrepreneurs often make the mistake of pursuing an opportunity that may not be profitable or sustainable in the long term. This leads to a high burn rate, where expenses exceed revenue, causing cash to run out quickly. Therefore, it is essential to focus on a viable business opportunity that can generate enough revenue to sustain the business and result in profitable sales.
Learning Objectives
- Grasp the critical factors leading to financial failures in startups, emphasizing the identification and focus on viable opportunities.
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