The Purpose of a business

[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.