Startup Costs Higher Than Expected: What to Do Next.
Startup costs higher than expected mean the exercise worked, not failed. A bad number you know is easier to handle than a vague one. So ask what would need to change, and your fear becomes a design problem.
When startup costs higher than expected appear.
If the number is worse than you feared, figure out what would make it work. For example, try a cheaper supplier, a smaller start or a different location. In short, startup costs higher than expected give you something concrete to redesign.
Missing, conditional or conflicting answers.
If a supplier did not reply, remember that suppliers sleep. Send the same request to two or three at once. Meanwhile, use a published price from a catalogue or listing, then swap in the real quote later.
If the answer depends on undecided details, pick the version you would most likely start with and note that assumption. Also, if three numbers disagree, take the highest cost, because an idea that works there works everywhere.
When the scary question has no document.
If no document can answer your scariest question, it is probably whether people will buy. Then move to the second scariest question instead. Also, watch for when research becomes procrastination. After three hours with nothing on the page, research has become your hiding place. So write your best number and its source, then close the laptop.
Handle startup costs higher than expected tonight.
Write down the highest cost you found and list one change that would make it work.
If you are still searching after hours, record your best sourced number and close the laptop.
From the book.
The answer depends on details you haven't decided yet. A permit might cost one amount for a home kitchen and another for a rented one. Pick the version you would most likely start with, note that assumption beside the number, and move on. You can always look up the other version later.
I Want to Start a Business but I'm a Coward, chapter 3: Unknown is not unlikely
Questions about startup costs higher than expected.
What if my startup costs higher than expected kill the idea?
Treat the number as a design problem. A cheaper supplier, smaller start or new location might make it work.
What should I use if three prices disagree?
Take the highest cost. If your idea works at that price, it works at the lower ones too.
What should I have by the end of tonight?
One question with a number, a source and a date beside it. The fear around it has probably changed shape.
Read the whole chapter.
This lesson covers one section of chapter 3, “Unknown is not unlikely”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Ellsberg Paradox: Why You Avoid the Unknown Jar.
- 02 Risk vs Uncertainty: Why the Unknown Pays.
- 03 Questions Before Starting a Business: Get One Number.
- 04 Ostrich Effect: Why You Avoid Answers That Sting.
- 05 Plato Laches Courage: Know What Deserves Fear.
- 06 Thales Eclipse Prediction: Unknown Is Not a Warning.
- 07 Are Entrepreneurs Ambiguity Averse: What We Know.
- 08 Startup Costs Higher Than Expected: What to Do Next.