A few years ago, I was teaching a Junior Achievement class called Applied Economics in a New York City high school. In this class, I was supposed to help the young entrepreneurs understand the business principles behind running a business. The class collectively decided to start a business selling big vials of Tootsie Roll candy for $2 each. Each of the vials was to be filled with pieces of Tootsie Rolls. The class had 500 vials to fill but by the time the budding entrepreneurs had finished filling the vials with the available candy, we ended up with only 450 vials. Some of the young entrepreneurs had been eating more candy than they were stuffing into the vials!

This example shows how young entrepreneurs can use up the assets that belong to their businesses. In a way, entrepreneurs who use up their company’s products without accounting for them, are just stealing from themselves.

Another misuse of company assets is when money is not re-invested back into the business to make it grow. During my business–school days, the term "cash cow" was used to designate a business that provided its owners with a steady stream of profit with little or no reinvestment. Young entrepreneurs sometimes consider their businesses to be cash cows. They think that their businesses will continue making money even if they do not reinvest some of their profits back into the businesses. This type of short–sighted thinking will doom any business.