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Business Owner Trap

 
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Michael Barbarita



Joined: 04 Oct 2008
Posts: 8204
PostPosted: Sun Jul 11, 2010 12:50 pm    Post subject: Business Owner Trap Reply with quote
Many companies develop cash flow problems 1 to 2 years after having a record breaking sales year!

When the business owner has a record breaking year they have a tendency to increase there salary permanently thinking they will continue to shatter sales records. This rarely happens.

When the business comes off of those record breaking years the business cannot absorb the owner's higher salary and cash flow problems ensue which usually can only be cured by generating more sales as the business owner has personally spent up to the higher salary and cannot take a cut without filing personal bankruptcy.

The way to prevent this problem from happening is through the use of bonuses.

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