The Small Business Forum
Survival
- Survival is the crucial stage where the business may move forward or slide back. The goal is to reach break-even. This is the level at which total revenue or sales equals the cost of generating that revenue, and the business makes neither profit nor loss.
- A small number of employees may have been brought in, with the owner becoming more of a manager. You are, however, still responsible for many of the activities, and your presence required on a day-to-day basis.
- Sales are fluctuating and the cost of production high. Transactions are still mainly on cash basis. Customers are generally first-time clients and unpredictable, and purchases and sales largely cash
- The key concern at survival is to stabilise production and increase sales to cover the high production cost. It requires knowing customers,―― who buys what, and when, ―and refining the product. Customer information increases with time and skills improve with the workers’ experience and training.. The break-even level is actually more of cash break-even, that the business generates adequate cash to meet payments.
Comments, Questions and Suggestions welcome.
drkibuka@thesmallbusinessforum.co.ke
+254-729524219
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