KenyanLyrics wrote:
What made you run out of cash? Mistakes with inventory? Hiring? What?
Several Reasons. I will give you just one.
When new in business you do not get credit facilities, neither do you get good deals from your suppliers - they don't 'trust you yet'
Your customers do not 'trust you', so would like some assurance that your product is similar + competitive... and will want the some insentive as well eg credit facilities/delayed payments.
if you do not offer this, you are not in business... as your competitors (more established) are offering this.
Your competitors have the credit facilitiies from the supplier.
You then get more orders than you had anticipated... so you will need more cash around.
You approach your bank who tell you
"Aaii chief, you've only just open your business account? ... Si kwanza you do 6 months, we can 'trust you' with credit?"
Basically whatever you had budgeted is never enough....
.... and before you ask, yes I have heard the word 'contingency'.