Cash Cow.

Essay by agakutyna December 2005

download word file, 2 pages 4.0 1 reviews

Downloaded 57 times

With the Cash Cow stage comes lots of problems, lots of pressure, lots of decisions.

One reason many companies do not make it to the Cash Cow stage is the owner can't

handle the company alone any longer and they have to begin hiring outsiders to help the

manage the growth. It is hiring outsiders that can sometimes make an owner nervous.

Who can they trust? Are they hiring the right person? Will they still be involved with the

day to day operations? etc. All of a sudden he/she is not the only one making decisions,

he/she is now feeling the pressure of making sure the company structure works so

he/she still knows what is going on, and he/she may be feeling ther pressure to keep the

company going so it can contain the cash cow stage. Growth is a hard thing to manage,

and letting go is even harder.

Owners of small companies are sometimes unable to

escalate to the Cash Cow level because they want to manage everything, and have a

hard time saying goodbye to the good days when everything was do-able by just the one


I would assume that during the infancy stage, you would be cash as well as

line of credit in order to build/produce goods and services. It would a small operation on

whole maybe out of a home or sublease space. As a company moved out of the infancy

stage into the middle stage, they would obtain their own space therefore signing a lease,

acquiring their own equipment that would be an expense, depreciable asset, etc. I think

that they may or may not have a credit line, but cash flow would be on a larger scale and

would indicate how successful they are as a company as well as managing...