1. Defining your company's "acceptable loss

In the world of exploration, many start out, but few arrive! Just look at the statistics on start-up success. You need to prepare yourself and your company mentally and budgetarily for this situation. An exploratory budget is by definition a risky budget, and your organization is obliged to treat it as such. It must be perceived as an acceptable loss in the sense of "effectual" logic.

The decision to explore a particular subject must be weighed against the financial risk involved. After all, it's quite possible that this exploration will come to nothing, and that all the expenses incurred will be more or less lost. So, when management decides to embark on an exploration, this notion of acceptable loss is key. If management isn't prepared to lose such a large sum of money, don't go ahead with the exploration.

The total budget of the organization...