Entrepreneurs often operate in volatile environments where market conditions can change rapidly. Having a buffer is crucial for the following reasons:
1. Risk Management: A buffer helps in mitigating various risks associated with running a business. This includes market risks, operational risks, and financial risks. 2. Sustainability: Ensuring that the business can survive tough times can lead to long-term sustainability. 3. Opportunistic Growth: During economic downturns, businesses with buffers can seize opportunities that competitors might not be able to, such as acquiring assets at lower prices or entering new markets.