In our early days in business, we had gone to meet one of the successful business man. He was actually friends elder brother. He shared different aspects of the business. One of the aspects was that when you start your business, either start very small or very big. His main reference was w.r.t. money that you put in business. We have seen several businesses trip over despite showing good signs in business. The major reason in those cases can be Cash Flow problem. Cash Flow can trip down any good running business. If you are going great and having good sales figures but are also tight in finance and credit, then God save you. Often the aspect of Cash Flow is forgotten and people expand very fast. Once they sense that there is good demand for their product, they start expanding. When they expand, it is like big overheads and if the cash inflow from new expansion is not coming, then the cash flow problem occurs. Your outflow is more than the inflow.
This is what he meant, when he said that. If you do not have huge financial back up, then you must start slow and stabilize the business first. Once the cash inflow is there, you would be more confident and then go to the next step. It happens that when we are making business plans, we factor in the business that we would be getting and also the cash flow. But the stabilizing of your product or selling of your product takes time and this delays the cash flow. This may unsettle your business if you had not factored that in or do not have reserve funds. When you go other way round; you have enough deep pockets and have already stabilized your quality & product, then you are ready to go big. You can advertise, keep big launch program and invite the Page 3 people and you have launched yourself in the minds of the people.
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