Over-optimism can have several adverse effects on a business:
1. Financial Mismanagement: Overestimating revenue and underestimating costs can lead to cash flow problems and potential insolvency. 2. Poor Strategic Planning: Unrealistic goals and timelines can result in failed projects and missed opportunities. 3. Inefficient Resource Allocation: Allocating resources based on overly optimistic projections can lead to waste and inefficiency. 4. Loss of Credibility: Consistently failing to meet optimistic projections can damage a company's reputation with investors, employees, and customers.