I've visited small towns. I disagree. Most businesses aren't immediately profitable when they start. On the topic of cash flow: Let's pretend that you build ho

I've visited small towns. I disagree. Most businesses aren't immediately profitable when they start. On the topic of cash flow: Let's pretend that you build houses. You are paid by your customers only after you finish each house. Before you can even start to build one of these homes, you must first buy and pay for the house's materials. If you don't have enough money to buy these materials, then you can no longer build houses for your customers. This means that you would be in trouble if one of your customers doesn't pay you (i.e. a hypothetical real estate developer who dabbles in reality tv). In this situation, you have a couple of choices. You can decide to go out of business. Alternatively, you could try to find more money in the form of a loan or investment, which would allow you to rebuild your business and recover. If you don't have any way to get this money, your only choice is to close down.