An owner trapped by sunk costs.
Exit
Situation
This case starts with a practical operating problem: An owner trapped by sunk costs.
What may be happening
The visible symptom may not be the real problem. The risk may sit in demand, rent pressure, repeat behavior, cash timing, or the structure of the decision itself.
Critical variables
- - Passing traffic
- - Entry rate
- - Purchase rate
- - Repeat rate
- - Rent pressure
- - Cash runway
Questions to ask before deciding
- - What exactly changed before the problem appeared?
- - Which number is observed, and which number is assumed?
- - Can the business survive if current conditions stay the same?
- - What must be true before committing more money?
Related Risk Check
Keep or Close
Related Book