Like the human body needs blood, air, water and food to live – a business needs a sustainable cash flow to ensure it survives. Business survival doesn’t always hinge on money – a PR disaster, poor leadership, unhappy customers and staff with poor morale can easily sink a business just as much as a fat loss in finances can. A business will be easily derailed if it constantly finds itself in a bad situation in well, anything. It doesn’t have to be money that sinks a business. Any bad situation can bring a business down in its own way – so business owners always need to be wary.
However, the impact of money in business should never be underestimated. Money really makes the world of business go round and round and round. Nothing can really happen in business without cash of some sort. Can you purchase your products without money? No. Can you hire and pay your employees without money? Of course you cannot. Can you launch marketing campaigns without cash? No way, but if you do you might not enjoy the exposure that you’d have wanted from the marketing campaign. Money can open a lot of doors for your business and yourself as a business owner.
There are only really two doors for businesses to go down if you think about it. There is the path to success – which means making a profit or attempting to break even and there is the path of making a loss. Continuous losses will force a business into bankruptcy and closure. Some businesses will make a loss anyway, but one that allows them to continue. Breaking even is the bare minimum expectancy for a business though – breaking even gives a business a platform to succeed and look at making a profit in the future. Of course, it would be harsh to define a loss as a failure as a business can make a loss for any number of reasons, but loss after loss can ensure that a business fails to stay open!
Businesses make a loss for all number of reasons. They might waste energy, they may have overly high rent, their product might cost a bomb to manufacture and pricing might be wrong. In some circumstances all of the above can be true. A business that makes a loss of any kind needs to do one thing – it needs to realize why it is making a loss. Could the business use DC Power Supplies to run a more efficient business? Could it use better equipment than the outdated versions that are wasting power and time? Is the business grossly overstaffed and is the payroll sinking the business?
Realizing why the business is making a loss and trying to make ends meet could save the business. The goal is to break even, if not make a profit and that is possible for any business, it just needs to take a step back and appreciate the reality of the situation. A business making a loss doesn’t need to make a loss forever.