Eli5, how do new business that make a product that can taken years to get to market ever make enough money to stay in business while they are waiting for their products, especially at the smaller scale? I’m thinking thinks like cheese, wine, whiskey, etc.
In: 5
Short answer.
A solid business plan. Loans, and credit with as much capital as you can raise to start. Banks understand that any business will take at least 5 years to start making money.
Many start as a side business or hobby until it starts making revenue, they may have business loans/investor funding to get off the ground without revenue, or perhaps there are complementary products like distilling vodka and other non-aged liquor while aging whiskey for sale, or running a dairy farm that sells milk and yogurt while aging their first run of cheese.
Short answer.
A solid business plan. Loans, and credit with as much capital as you can raise to start. Banks understand that any business will take at least 5 years to start making money.
Many start as a side business or hobby until it starts making revenue, they may have business loans/investor funding to get off the ground without revenue, or perhaps there are complementary products like distilling vodka and other non-aged liquor while aging whiskey for sale, or running a dairy farm that sells milk and yogurt while aging their first run of cheese.
Createing things like cheese/wine/whisky also produce plenty of other products that could be marketed to keep revenue flowing. Cheese has its basis in milk production, wine is produced from grapes which can also be made into other products, Whisky starts off as a neutral grain spirit before being aged in barrels, a neutral grain spirit is literally just vodka which they could also sell in the mean time.
Createing things like cheese/wine/whisky also produce plenty of other products that could be marketed to keep revenue flowing. Cheese has its basis in milk production, wine is produced from grapes which can also be made into other products, Whisky starts off as a neutral grain spirit before being aged in barrels, a neutral grain spirit is literally just vodka which they could also sell in the mean time.
Most start as passion hobbies till turn profit then upgrade as you go. But this is the major way that generational wealth builds on itself. You are less likely to go out of business before profit.
Most start as passion hobbies till turn profit then upgrade as you go. But this is the major way that generational wealth builds on itself. You are less likely to go out of business before profit.
Venture capital and loans via investors.
Many people are happy to invest their money in something for a payoff in a few years. Maybe they want a portion of the revenue. Maybe the want to diversity their portfolio by owning a cheese business, but don’t want to run the business day-to-day, or maybe they are just into helping people get started.
Venture capital and loans via investors.
Many people are happy to invest their money in something for a payoff in a few years. Maybe they want a portion of the revenue. Maybe the want to diversity their portfolio by owning a cheese business, but don’t want to run the business day-to-day, or maybe they are just into helping people get started.
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