Nobody ever thinks their little company will fail. Positive attitude gurus would say that you should never even entertain the thought of failure. Just think positive!!
Well, the
facts are that the majority of small businesses fail within the first five years. If you want a wet blanket on your positive thinking, just talk to a lawyer.
I don’t think some smart preparation for failure should detract at all from your positive thinking, your enthusiasm, or anything else. Success is sweet when you know how to structure and fund your new business venture. And if there is a bitter failure, it will still taste a lot better going down when you are
prepared.
Most businesses are funded by money or “sweat equity” contributed by the owners in exchange for stock (in a corporation) or membership interests (in an LLC). That’s ok, particularly for the initial funding of the company, but you need to understand that if the company goes down, the stockholders and members are the last people to get anything out of the failing company.
