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Evidently thinking someone should have a valid business model and a profit gets you downvotes... who knew ?

by geggam 9y ago

narag 9y ago
A business can start losing money and later become profitable. Also banks tend to ask for something to pray in case that never happens, so they sometimes profit from unprofitable businesses. Happy New Year from Captain Obvious ;)
- bunderbunder 9y ago
  A business can, but it's much more likely to be the case in something like software where the majority of costs are fixed, and economies of scale are such that you can relatively easily grow into profitability. I'm no business expert, but I'm guessing the story is different for small town restaurants. If you've got one that's been open for 3 years, it's probably fairly safe to say that its growing days are over. By then, everyone in town knows about it, so there's not much prospect for expanding the customer base. If anything, I'd expect the company's business to slowly dry up over the long haul. Money is flowing out of small towns, so, even if every single customer is a loyal regular, they'll still be going out less and less over time simply because their supply of excess income to spend on things like eating out is shrinking.
  - narag 9y ago
    I'm no business expert either, but I know a handful of small town bar owners. Without too much detail: just consider the case in which someone buys a bar or rents a place that was already a bar before. The people that I know would make an inauguration party, adjust prices and renew the place and the offered products for a better fit with prospects. And suddenly a failed place becomes a profitable business.
saas_co_de 9y ago
Making wild unfounded claims like "Small town businesses cant turn a profit and as such shouldnt be getting a loan" without any support gets you downvotes.
- chillwaves 9y ago
  >population 729 Did you miss this? These rural communities do not have the population density to support these businesses. Have you ever been to these communities? There are literally only 2-3 restaurants in towns like these and that is basically all they can support. Now, Wawas and Sheetz basically fill the gap for "eating out", but it is a very different business model needed to succeed in these places.
  - saas_co_de 9y ago
    I was born and grew up in a town with a few hundred people. There are businesses that were there when I was born and are still there (30+ years now) and there are plenty others that have come and gone over time. That is not any different than any city I have lived in and I have been all over the world.

Evidently thinking someone should have a valid business model and a profit gets you downvotes... who knew ?

by geggam 9y ago

Evidently thinking someone should have a valid business model and a profit gets you downvotes... who knew ?

A business can start losing money and later become profitable. Also banks tend to ask for something to pray in case that never happens, so they sometimes profit from unprofitable businesses. Happy New Year from Captain Obvious ;)

bunderbunder 9y ago
A business can, but it's much more likely to be the case in something like software where the majority of costs are fixed, and economies of scale are such that you can relatively easily grow into profitability. I'm no business expert, but I'm guessing the story is different for small town restaurants. If you've got one that's been open for 3 years, it's probably fairly safe to say that its growing days are over. By then, everyone in town knows about it, so there's not much prospect for expanding the customer base. If anything, I'd expect the company's business to slowly dry up over the long haul. Money is flowing out of small towns, so, even if every single customer is a loyal regular, they'll still be going out less and less over time simply because their supply of excess income to spend on things like eating out is shrinking.
- narag 9y ago
  I'm no business expert either, but I know a handful of small town bar owners. Without too much detail: just consider the case in which someone buys a bar or rents a place that was already a bar before. The people that I know would make an inauguration party, adjust prices and renew the place and the offered products for a better fit with prospects. And suddenly a failed place becomes a profitable business.

saas_co_de 9y ago

Making wild unfounded claims like "Small town businesses cant turn a profit and as such shouldnt be getting a loan" without any support gets you downvotes.

chillwaves 9y ago
>population 729 Did you miss this? These rural communities do not have the population density to support these businesses. Have you ever been to these communities? There are literally only 2-3 restaurants in towns like these and that is basically all they can support. Now, Wawas and Sheetz basically fill the gap for "eating out", but it is a very different business model needed to succeed in these places.
- saas_co_de 9y ago
  I was born and grew up in a town with a few hundred people. There are businesses that were there when I was born and are still there (30+ years now) and there are plenty others that have come and gone over time. That is not any different than any city I have lived in and I have been all over the world.