This question ascertains risk. What is the maximum loss? If everything goes completely wrong, what are we in for? We cannot accurately measure risk without a benchmark. The benchmark is a catastrophic loss.
The challenge with risk is that it is a perceptual metric. Entrepreneurs measure risk in their potential to bounce back and recover. This includes the impact on relationships, family dynamics, and future support.
As a result, each entrepreneur will interpret these risks differently. This creates an opportunity and a risk. The risk is not knowing when to cut our losses. The opportunity is to push through even though we believe we are in the worst case scenario.
We tend to overinterpret worst-case scenario’s when they happen. Our fear of the unknown overwhelms our logical decision making. Like man flu.
This video captures it tongue in cheek.