Wachovia Small Business Capital


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Wachovia Small Business Capital

Wachovia Small Business Capital

Profit is not just about big houses, yachts and holidays abroad. In fact, it's not necessarily about those things at all.

Profit for Security

Hewlett Packard, the computer and electronics giant that is one of the most successful corporations in the world, instructs its managers to plan for one bad year in every five. Experience has shown it is better to plan for two bad years in every 10, because bad years can come consecutively.

Many industries in the U.S.A., and in countries which export to the U.S., experienced a downturn in sales for four years after 9/11, 2001. The only way to cope with down years is to have money in the bank.

That's the first function of profit for a small business: to build up cash reserves to pay fixed costs and keep the business solvent when sales are down.

As entrepreneur and business educator Dr. Tony Fattal says, "When you're out of money, you're simultaneously out of business."

Money for Small Business Growth

Few businesses survive without growing. Either a business grows or it contracts. The small business owner has to plan for a turnover of customers of, on average, 20% per year. Just as with bad years, that 20% can accumulate; customers can be stable for several years and then plummet. This also happened to businesses after 2001.

The small business owner needs growth to counteract the inevitable loss of business.