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It must be possible to manage a company in a sustainable way where constant influx of capital is not necessary. In fact the vast majority of companies must be r
by wrs 2y ago
It must be possible to manage a company in a sustainable way where constant influx of capital is not necessary. In fact the vast majority of companies must be run that way because they don’t have access to large amounts of capital, no?
- alephnerd 2y ago> It must be possible to manage a company in a sustainable way where constant influx of capital is not necessary It absolutely is! It's called being "Free Cash Flow" (FCF) Positive - ie a business generates more cash from operations compared to capital expenditures. Sadly, not all businesses can become FCF Positive - especially if they are heavily leveraged, have significant liabilities, or don't care for optimizing for FCF at the expense of expanding market share or growth. FCF Positive has become the primary indicator for business health over the past 2-3 years, whereas before the primary metric was market share growth, but it is very difficult to retool or drastically change a business. More fundamentally, a company like Joann's is dealing with a relatively crowded market (Michaels, Hobby Lobby, resurgence of boutique craft shops), and something has to let go.
- wrs 2y agoI guess the lesson here is that a leveraged growth strategy is a one way journey.