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/biz/ - Business & Finance

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17792842 No.17792842 [Reply] [Original]

Why do companies fold at the slightest hiccup in the economy?

Where do companies find the idiots to run them?

Imagine not being able to take 1 month of lower sales without going into administration

>> No.17792937

Because this country and the whole wolrd pretty much run on debt, yeah its fucking retarded

>> No.17794030

>>17792842
>Why do companies fold at the slightest hiccup in the economy?

Because they're overleveraged.

>> No.17794047
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17794047

>>17792842
jews

>> No.17794280

>>17792842
We are a company that can make money. We can make more money if we have more money. We need to borrow as much money as we can so we can make as much money as we can

hiccup in the economy happens, we can't make as much money for a month

Bills still due on what we borrowed

Its over

>> No.17794305

>>17794030
This

Also the people running them are only in it for personal gain and don't care if the entire company implodes once they leave: see PG&E neglecting maintenance for decades and burning down half of California.

>> No.17794321

>>17792842
thats how capitalism works

>> No.17794331

>>17792937
>dude i should totally just save for ten years to buy a new car instead of taking a loan bro i can just walk 20 miles round trip in winter to work and back ha ha man

>> No.17794343

>>17792842
>Why do human bodies fold at the slightest stab wound in the neck?
>Where do human bodies find the weak stupid circulatory systems to run them?
>Imagine not being able to take 1 giant stab wound in the neck without going needing surgery and a blood donation

>> No.17795339

>>17794331
Or you could just drive a used car retard

>> No.17795343

>>17794343
lol

>> No.17795378

>>17795339

*buys a gamestop franchise*

>> No.17796452

>>17792842
Is that Void, the dog?

>> No.17796454

>>17792842
Entrepreneur with my own tech company that pays 5 people high salaries here.

>Have enough cash reserves to run for a year with 0 revenue.
>Have no debt.
>Already work from home environment so nothing changes for us.

Dunno why so many companies suck. Once you have a cash positive company it's easy to save up cash reserves for bad times. Too many of them burn it as soon as they get it chasing massive scale or new projects that end up being money sinks.

>> No.17796629
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17796629

>>17792842
Because they want to expand at a rapid pace. This is often influenced by the availability of cheap credit. Patience, prudence, and discipline are virtues abhorred in this system. Just take the example of real estate investing. Assume one guy has a very conservative approach. Buys distressed properties with cash, remodels it himself before renting it out etc. Another guy takes out loans, home equity loans etc. He's able to expand rapidly and has higher cash flow. On paper he's looking good. But it just takes one event for him to fold. A couple of bad tenants, a job loss etc is going to fuck him over and he'll lose everything. Guy A survives and keeps growing, albeit slowly. Companies are like this, they just overextend themselves so easily.