Quote:
Originally Posted by beaner
Now this over spending could be from a plethora of things, many with good intentions
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Such as?
If you run a business like theirs, you are working on a set margin. Im not sure what theirs is, but its VERY clear.....if $1 hits the account, 0.95 of that is not their money.
Too often small financial services companies think that can run their business like a multi billion dollar bank. Large banks do not keep enough cash on hand to cover deposits, but since they are working with millions of customers, billions of dollars and years of data showing how much cash needs to be available at any time to cover the average daily world wide withdrawals....they can handle it. A small company like this can't. All it takes is using that money for an investment or acquisition and "counting" on cash flow to be stable. If they loose a few big customers, get a few to many withdrawals etc....the whole thing falls apart.