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Importance of Cash Flow (Put yourself in the middle of the deal (Examples,…
Importance of Cash Flow
Lack of cash stops many Entrepreneurs dreams from getting off the ground
Get the money up front
Pay in advance
Customer pays today
Product/service delivered in the future
Credit terms with suppliers
Collect cash regularly
Subscription models
Best suited to perishable offerings
Put yourself in the middle of the deal
Make money by taking a share of transactions
Principal task is to match suppliers with buyers
Examples
eBay
Expedia
Delicate balance required
Too many suppliers with no demand equals unhappy suppliers
Too much demand with not enough suppliers equals unhappy buyers
Give them a deadline to buy
Goal to turn over inventory before suppliers are paid
Customers cash then funds growth
Markets can work against the business
Competition for goods rises prices
Transform what you offer
Start with a service
Then offer a product
Examples
Microsoft
Built an operating system
Sold Windows; Office; Hardware; Applications