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Barrons and The Wall Street Journal. He can be contacted at Jack@Falvey.org. Business

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Briefs Education Investor Falvey Jack

Jack Falvey's Investor Education Briefs: If more money comes in than goes out, you are in business

By JACK FALVEY
December 03. 2017 9:31PM

 Barrons and The Wall Street Journal. He can be contacted at Jack@Falvey.org. Business



How complicated can this be? Cash coming in is the objective. The sooner it comes in, the better; and the less it costs you to get it to come in, the better.

Sometimes you can be beyond your break-even point before you even begin just by getting cash up front from your customer before you have to deliver or make or purchase the goods. Bootstrapping is the most common form of business. Pulling yourself up by your own bootstraps is defined as using the cash coming in from one customer to purchase the goods you are getting ready to sell to your next customer.

Entry costs can be zero if you can find a customer that will front the money.

If you need bricks and mortar, inventory, machines and employees before you can begin, be careful. It is easy to add all of the above once cash begins to flow. How to get cash coming in without any going out first is a neat trick. It can be done, but it isn’t easy.

If your plans are conventional, requiring up-front funding, try going back to the drawing board and see if you can come up with a less-conventional baby step that will produce cash.

Invest time and effort as best you can, but getting sales to finance your venture is the strategy of choice. Become a student of bootstrap operations. Focus on getting cash to come in. Do the hard thing first.

Jack Falvey is a frequent contributor to the Union Leader, Barron’s and The Wall Street Journal. He can be contacted at Jack@Falvey.org.



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