Which are the TWO primary types of business?

  • Once someone starts a business, it falls in either of the two categories. It is either Cash Driven or Equity Driven.
  • The consulting business is a typical Cash Driven business.
  • A Cash Driven business is set up primarily with the goal of sustaining a particular level of income.
  • The focus of a Cash Driven business is to generate revenue at the earliest and become profitable.
  • A Equity Driven business is one which is set up primarily with the objective of growing fast and reaching a higher valuation in a short time. A big payoff for the founders would be at a time when the business is sold or become public.
  • Capital has to be invested to fuel the growth of these companies.

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