Photo - Unsplash
In any business in life, the bottom line idea must always be preservation of capital. If you're losing more than you are making, it's only a matter of time before your business comes to ruin. You must always find an edge in whatever you're doing, so that no matter how little, you're always in front of the game.
The common mistake that most people make is that they think that just because they're making some profit today, that their business is good to go. They don't think about sustainability. Consistency is the very most important thing in business. If you make so much profit today, and you lose it all tomorrow. Then there's a huge problem.
Another major problem that most entrepreneurs face is the fact that they get greedy. A business could have a 90% winning probability and still, some entrepreneurs will lose in such a good business. You may want to ask me why? And the reason is simple - it's because each time that they make investment, they increase the amount invested.
Photo - Unsplash
Therefore, even if they've won all the first 9 times. Just by losing 1 time, they lose all they've made. A proper management of your capital is very important if you want to consistently make profits from whatever business you're running. You can't afford to be one of those people that make so much, and lose it all just because of one bad throw.
It's an important lesson in business that you should be very careful when it comes to how much of your capital and profits you put in. Sometimes, it may mean that you make smaller profits but consistently; that is far better than making huge profits, but if things don't go your way you may make massive loss that could ruin you.
Thanks for reading
