Does your company have a Vitamin C deficiency? Daymond John from the Shark Tank defines this as having a lack of CASH, CAPITAL AND CUSTOMERS. I feel this can define your business and determine if you will be able to get your business from the start up stage. Cash can be either real cash or assets that can be turned into cash quickly. Capital can be assets that drive your business such as a patent, trademark or even a special piece of equipment or knowledge. Customers are of course people who purchase your product or service. If one or even two of these are missing you can leverage the others to get your business moving, but if all three are lacking then you will not be in business for long.
Cash, of course, is necessary to any business. It allows you to pay your employees and purchase or invent your product or service. Cash flow is even more important. It is the ability to take product or service to your customers and then have them pay you; which brings you back to cash. I’m not saying money is the most important part of a business, however even non-profits need money to operate and pay the bills.
Capital is often confused with cash, but it is actually more than that. Cash is often included in the valuation of the capital of a business, but it is really all of the other assets a company holds that are the capital. The assets of a company are what set that business apart from the others. This can be a special process that only your company has, such as the secret recipe at KFC or a copyright on a book you wrote. Even your employees can be considered an asset, because they are unique and make up the atmosphere of your company. Businesses such as Pixar would be nothing without their employees and some of their proprietary software innovations. Inventory can also be capital. If you don’t have enough of the product that your customers are demanding, you can have just as much of a problem as if you had too much inventory without enough demand.
Customers are your clients. They are the ones who determine if the capital you have such as the inventory you are carrying is worth their money. Loyal customers are hard to find because there is so much competition for where they will spend their money. Customers have everyday expenses such as food and gasoline, competing with needs such as doctor bills and insurance, which is also competing with wants such as going to the movies or even buying a new car. And all of those expenses compete with buying your product or service.
Is your CAPITAL compelling enough for your CUSTOMERS to spend their CASH at your business? The problem is finding what is your company lacking, and how can you correct the problem. Maybe you will find that your business needs a new dose of Vitamin C. Give us your ideas on what your business is lacking right now so others can give you ideas on how to leverage what you have to correct what’s missing.