Today, I think hosted providers are capturing the 1-10 station segment. In my prior posts about SMB Failures, statistics report on the dismal failure rates of these small businesses. Since these companies fail at a high rate, hosted services for small numbers makes sense.
For the Startup, it really makes more sense to build a cash reserve. More often than not, what really happens is the burn rate of cash leaves companies high and dry. When they call on their banks and lines of credit, about 30% of SMBs remain underfunded. Those successful in getting credit may prolong the death of their companies, or they might recover. Those that recover aren't necessarily more profitable or viable, because interest erodes their profits and increased output isn't a guarantee for more revenue. Then, because the SMB companies that do grow, often grow at greater risk of failure--and they do fail more as they age. This sounds pretty glum but it’s the nature of SMBs—however, it's not the nature of all SMBs, just most of them.
Read entire post here.
For the Startup, it really makes more sense to build a cash reserve. More often than not, what really happens is the burn rate of cash leaves companies high and dry. When they call on their banks and lines of credit, about 30% of SMBs remain underfunded. Those successful in getting credit may prolong the death of their companies, or they might recover. Those that recover aren't necessarily more profitable or viable, because interest erodes their profits and increased output isn't a guarantee for more revenue. Then, because the SMB companies that do grow, often grow at greater risk of failure--and they do fail more as they age. This sounds pretty glum but it’s the nature of SMBs—however, it's not the nature of all SMBs, just most of them.
Read entire post here.
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