ENT 101 Affordable Loss Assignment Use the following questions to help you determine the affordable loss for your project: 1. Determine what you have that you can afford to lose. You inventoried your means in the last unit. How much can you realistically afford to put into your project? Consider: • your financial commitment • your time commitment • your emotional/physical commitment Make a list and quantify as much as possible. Describe any resources that cannot be quantified. Don’t include any resource that you are not willing to give up! (For example, people will often say they are willing to part with some of their weekend or evening hours. Are you realistically able to do that?) 2. Determine the least expensive way to start your project. This will require a little research. If your project is related to starting or growing a business, you can do an internet search to estimate costs for similar ventures. Be sure to include all types of costs you can think of, not just monetary costs. Here is a resource from the Small Business Association to get you started with monetary costs: Calculate Your Startup Costs 3. How large is the gap between what you have and what you need? How can you fill in this gap? Balance the gap by increasing your means or lowering your costs. You may see a large gap between what you listed in Question 1 and what you listed in Question 2. If your means are not enough to cover your estimated costs, you can: • increase your resources • lower your costs • do some combination of these Lowering costs is often easier than increasing your resources. Think creatively about how you might be able to lower your costs. Can some of the resources you need be shared or borrowed? Can you work collaboratively with someone to reduce costs? Can you barter your time or skills? By seeking out people you can share, barter, or collaborate with, you may discover new resources, ideas and stakeholders. In other words, you may discover new means while you are looking for creative ways to reduce costs. Continue tweaking your means versus costs until they are balanced. This is the amount of time, money, etc. that you should be willing to part with. 4. Are you really willing to give up these resources for your venture? If not, what other idea can you pursue? It is one thing to come up with an estimate of your affordable loss, but quite another to actually give up those resources. Ask yourself if the venture is worth pursuing, even if you lost your investment of time, money, and other resources. Be honest with yourself. Hopefully your answer is “yes” and you are ready to move your idea forward. But what if your answers is “no”? Some suggestions: • Go back and look at your answers in the previous steps. Did you overlook anything? Is there anything you can change? • Look at your means again. Is there a different idea you can pursue with those means?
