(Total Views: 569)
Posted On: 02/10/2019 12:22:19 PM
Post# of 32993
In the update, Rory said:
Sound Concepts was cash flow positive just in the eleven months by $632K
They were net income positive by $533K
They paid off all their debt
Why did he mention being cash flow positive and not just say they are profitable by $533K?
It's because you can be profitable without being cash flow positive
You can also be cash flow positive without being profitable
To be both is a very good thing. A very good thing. You'd be surprised at some very large, well known companies are not.
Companies in that position can use the cash to expand the business, dividend payout, share buyback, debt reduction, etc.
Guess which one they will be doing?
If you guessed, expand the business, you are right. They have no debt to pay off.
Hardest and most time consuming part of a SaaS company is the initial overhead of getting the business off the ground. Once in motion, everything becomes incremental and your margins continue to grow.
545K users and adding 2K users a week
10 new customers on the joint platform already
8 existing customers expanding
pipeline getting big
Sound Concepts was cash flow positive just in the eleven months by $632K
They were net income positive by $533K
They paid off all their debt
Why did he mention being cash flow positive and not just say they are profitable by $533K?
It's because you can be profitable without being cash flow positive
You can also be cash flow positive without being profitable
To be both is a very good thing. A very good thing. You'd be surprised at some very large, well known companies are not.
Companies in that position can use the cash to expand the business, dividend payout, share buyback, debt reduction, etc.
Guess which one they will be doing?
If you guessed, expand the business, you are right. They have no debt to pay off.
Hardest and most time consuming part of a SaaS company is the initial overhead of getting the business off the ground. Once in motion, everything becomes incremental and your margins continue to grow.
545K users and adding 2K users a week
10 new customers on the joint platform already
8 existing customers expanding
pipeline getting big
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