How business becomes like a bicycle

You may have come across a situation where business is conducted in the conditions of permanent loans and credits. This is such a bike: while you pedal – you go as soon as you release the pedals – you move by inertia for a while, but then you fall on your side.

I first encountered this situation in a distribution company where I was a director. Then we did not have enough money for the “turnover”. When we began to analyze our expenses, we saw that we spend their lion’s share: a) on the salaries of our employees and b) on the repayment of loans. And it turned out to be a heavy burden, because every month — take it out and put it — we have to pay people salaries, and also interest and a body on the loan. Continue reading →