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How Much is Enough?

By Joel Block

How much information is enough to allow a business person to make a good decision? For example, how much research should a company do before it has enough information to decide which direction it should head or how it can maximize an opportunity?

This question plagues entrepreneurs - particularly those who are trying to grow their business. Resources are always limited, and decisions must be made on how to allocate those resources. Some entrepreneurs try to gather every bit of information that's out there. Not only is that impossible in most cases, but trying to capture all of the information available doesn't necessarily yield the best results.

My experience has been that by the time one has spent the time and money to acquire all of the information that's available, the opportunity may have passed.

Of course, you don't want to dive into a swimming pool without knowing whether it is filled with water or not, but in my experience, one should shoot for the 70% level in regard to information.

On the guidance of an attorney, one of my business partners was waiting to complete certain materials in order to issue a private placement offering. According to the attorney, the offering document, which we needed in order to make the offering to prospective investors, couldn't be prepared without our gathering substantially more information than we already had. My business partner disagreed. He felt that we had enough information and that we would make disclosures for the balance of the material. Both of us agreed on that. We ordered the preparation of the offering document. This was a good decision on our part, since when we did acquire the additional information that the attorney had told us we needed to have, it didn't differ in any significant way from the information we already had.

So, as you are working hard every day to build your company, or as you're building your career, consider the 70% rule. It is a cost-saving rule and a resource-utilization rule. I have used it for years.

About Joel G. Block