Monday 11 July 2016

Do you really need an investor?

A few years ago I took a boardgame Cashflow to our company party. We struggled with it for quite a while, but at the end it was fun. It can´t be counted as one of the cheapest boardgames, but it´s a profitable investment. Because allows you to go through the basic vocabulary and the rules of investment and of course it also helps you to widen your financial awareness.

Not long ago I read a reflection about investment written by Sharon Lechter  - a co-auther for this boardgame, which is according to me fundamental for every start-ups. While starting the company which produces this Cashflow game, they had to set some rules for the financing of overhead costs. Those are, in my opinion, the most important components (or a weak spot) for every start-up. They already said it beforehand, that they won´t buy anything, which couldn´t ensure their sales increasement. At the same time they have to earn enough to get this overhead material on their own. They can do that if they´ll set up a sales target, which could cover the costs. When they couldn´t get a new copy machine for 3000 Dollars (which is as tempting as many other things at the begining for start-up companies), they bought a used one for 300 Dollars instead. At the end of the same year they could already change it for a new one, but not until their game became a so called bestseller.    

I like this way of thinking a lot. The number of contracts causes us inside the company a lot of pressure, mainly in the field of technology and also advancement altogether, so sometimes it´s really funny, what interesting things could be dig out. When we are presenting some new releases, I can tell them that it´s something we found in the waste collection. But think about it this way, that a problem occures out of nowhere, we aren´t capable to constantlly manage such a quantum and we don´t want to get into debts or we don´t have time to go to the investors to explain every detail of what we want to do in the future and that a new technology for each warehouse would cost us a million. So we start to do everything our way, which also includes our own developement and at the end we buy the technology from somewhere on the other side of the world literally from a scrap, we contact our manufacturer with our order, we tell them what kind of parts we want and in the most cases we can put it all together for just a fraction of the price. The manufacturers are very pleased, when they see someone so enthusiastic, someone who also found out their problem with the processor, so they even sent us some parts for free as thanks. We also do the same thing with our customers, when they find a problem in our system. I dont´s see anything wrong with choosing the path of optimization and economize on the things which can be economized in this time and age, when the company is successful, those are the keys for further investments.     


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