The Purpose of a business

[Blurock]

Now this is how you retain a customer and get extra miles from word-of-mouth advertising!

Thank you for your recent email inquiring about spares or the servicing of your Bissell vacuum cleaner.Bissell has not been represented in South Africa for more than 8 years, and we have recently been appointed to distribute the latest technology in both Wet & Dry vacuum cleaning.
We have made contact with Bissell META (Middle East Turkey & Africa) with regard to your older machine and they have informed us that they no longer have access to the spare parts to these older machines, which are now discontinued.
As a loyal Bissell customer for many years we would however like to offer you the opportunity to trade in your existing machine for the latest technology from Bissell.

I can highly recommend these guys for their prompt replies and excellent service.
The model of our Bissell vacuum cleaner is outdated and spares are no longer available.
To compensate Legends Housewares suggested to trade in the old for a new one. They collected the old vacuum cleaner and the new one is on its way.
The product was on special with a 50% discount plus they gave me an additional 20% off for my trade-in! No courier cost!
This is a company I would support all the way. Customer for life!
Legend Housewares (Pty) Ltd
Telephone:+27 11 462 2250
Email bissell@legend-sa.co.za
Website www.bissell.co.za[/COLOR]

[Blurock]

The purpose of a business is to create a customer. The function of a business is to retain the customer. No one can "make money." The customer is your source of revenue. If you lose the customer, you lose your income. Trying to milk a customer for the maximum income means you are not customer-driven but money-driven. If you are trying to make money rather than create customers, you will always lose in the end.

[Tradie]

I am in a situation where I have lots of customers who have supported me for many many years (more than 20), adding new customers by word of mouth all the time, in fact to a point that many customers dont share my number because I just get too busy, yes I know you going to say, then you should grow, without capital/money you can't grow.

From my years of experience, there are a few things I have learnt:

You can have a thousand customers, with million rand projects, without the capital to execute the task requested by the customer, you dead before you even get started.

Cash/money is king, no matter how much money you see on paper tied up in contracts, until that money reflects in your account, you dead.

Unless you have a budget or financial support/investors to grow your customer base (who will want to see the profit/money growing), to a point that you make enough money to make a profit/money, you are dead.

The purpose of a business is to create enough capital/money to get started and grow the business, so that you can grow your customer base to support the business and pay back the money.

I would say you need both, because one can't do without the other.

[Tradie]

Cut and paste from google....This pretty much puts in in perspective in one line.

"business" generally refers to any activity or enterprise undertaken for profit, encompassing organizations that provide goods or services to the community in exchange for money"

[Blurock]

Unless you have a budget or financial support/investors to grow your customer base (who will want to see the profit/money growing), to a point that you make enough money to make a profit/money, you are dead.

The purpose of a business is to create enough capital/money to get started and grow the business, so that you can grow your customer base to support the business and pay back the money.

I would say you need both, because one can't do without the other.

I think you are missing the point. To start a business you need capital. The source of start-up capital is not a customer, but banks, finance houses, friends and family, personal savings or bootstrapping as many small businesses do. There are also many different industries and types of business that have different financial requirements.

Once you have raised start-up capital you need customers to generate an income. Once the business is doing well and you want to expand, you may want to raise money again to grow the business. This may be done via a loan or equity but still relates to the funding and set-up of the business. This is not cash flow but capital. Cash flow comes from customers.

The funding of projects once you have a business is also a different principle and relates to the type of business and the way that the business is run. I.e. in construction you may find a number of companies forming a joint venture as the contract may be too big for one single contractor to fund the building of a road or a dam. That relates to business strategy and business funding. However, you still need a customer to place the order, whether it is big or small. Without the customer you do not have any contract.

So, the purpose of the business is still to create a customer who can give you the order. Do not confuse capital investment in a business with cash flow. Only a customer can generate cash flow.