One of the biggest but all too common problem business face is lack of resources. Start-ups have an especially difficult time when it comes to managing or even just finding resources because, as we all know, during the first two years (actually the length depends on the type of business you are in) the profit being made does not really count as profit since you are still trying to get back your capital. After overcoming the initial birth pains though a business should be making enough to income to not only regain the capital but to have enough to fork back into the business. Despite having a really tight budget it is a mistake not to reinvest in your own business.
Before reinvesting in your business though you should carefully analyse your actual financial status (Oh no the headache!) to know just how much you need in order to not only keep your business afloat but also to expand it. After getting the figures straight you then need to again analyse your finances to learn just how much exactly you can invest in your business.
If there is a discrepancy between the amount of money you can fork in and the amount you need just to keep your business alive you have a real problem. In cases like this you need to start figuring out why your business is bleeding and stop it before you need to close shop. If you can’t figure why at all ask an expert’s advice because you should never just reinvest money in a business that you don’t even know how to save. In the end you might simply need an infusion of money to revitalize your business or you might need to seriously think about selling the business to cut your losses. In short, do not attempt to expand if you are not equipped to do it.
to be continued…
Originally posted on February 27, 2008 @ 5:45 pm