CSF #4: Start Sustainable Small Business
Whether you start a small or large business, there may be good profits. However, is it a a sustainable business? Does the business have good cash flow?
Sure, it sounds simple and straight forward.
Nevertheless, I have seen many companies which went bust not because there wasn't enough sales, but they failed to ensure adequate cash flow.
They may not have good credit controls measure or the business environment puts them at a disadvantage.
Hence, the sales volume is not the only criteria for evaluating the business. Do look at the profits and the cash flow of the business and industry that you are about to embark on.
There are some industries where it would be very difficult for small business to survive as the customer usually requires credit terms from you as all your competitor does that. You would need even more capital to ensure good cash flow and survive.
Besides that, the sustainability of the business also depends on the market you serve.
If I decided to open my retail pharmacy in the small suburban town with an aging population, I will probably have a profitable at start. Nevertheless, how sustainable is my business when the younger population is migrating to the big cities for bigger opportunities?
Do you have a business that will sustain for the future?