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The initial investment or start up capital in any new business venture is always at risk of loss by its nature. Whilst steps should be taken to minimise the risk, just putting money into a venture is no guarantee of success. Knowing the market, understanding the business, having specific experience or skills relevant to the business are all ways of minimising the risk. The expression sink costs is used to describe initial investment. The money is spent and unless the investment is secured on a saleable asset, it must be regarded as part of the risk involved in business. The simple rule is only invest what you can afford to lose, otherwise don't proceed.

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