Not Retaining Sufficient Capitalization
Sep 16, 2008
Continuing our look at the twelve most common mistakes agribusiness owners repeat, #8 covers the single most common mistake.
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The eighth of twelve most common mistakes agribusiness owners repeat:
The NUMBER ONE reason most family businesses fail is insufficient capitalization.
Capital is to business as water is to life. It is required to sustain and grow a vibrant operation. Cash reserves are necessary for managing the economic ups and downs of a normal business cycle, and for weathering the storms of an unforeseen crisis.
Our office sits on the shore of a picturesque lake. Though not a large body of water, it’s big enough for small boats, windsurfers and the occasional fishing outing. Helitak crews from the Department of Forestry use it as a source of water for local wildland fires. Rejuvenated former military helicopters swoop in, hover just above the lake’s surface, and recharge their 324 gallon sky buckets. We’ve watched this summer as, day after day, the copters scurry down from the foothills, fill their buckets and charge back to the fight. >>