Originally Posted by
I-Like-To-Bike
You don't seem to understand anything about this topic.
The example I used was certainly simplistic. And Uber isn't retail sales. Thanks for catching me up. I did not know much of what you posted.
Originally Posted by
I-Like-To-Bike
Uber loses big money not because it is being looted by management but because their revenue falls far short of their operating expenses
I just wanted to clarify the "
looted by the management" part of your post. In retail, ideally, every widget in the store will double your money invested in it every season. Sure there is shrinkage and other overhead that has to be addressed but ideally, every season you make 2X for ever X invested in inventory. A retail store never wants money in the bank instead of inventory. Money in the bank does not double every season (3-6 months depending on the store). So let's assume that our retail store is wildly successful and the bank account is filling up, the store is crammed full of product, and the tax man is drooling. What to do, what to do?
1. Open another location.
OR...
2. Give everybody a big raise. Or raise the commissions - even better, in case we have a bad year - the commissions will shrink and management does not have to take wages away from employees or lay anyone off.
It's a tightrope walk for sure. Ideally, at tax time, we want less than zero in the bank and the least amount of inventory possible. File the taxes, and fill the store again.
Now you start talking about stocks, going public, futures, leveraging, etc...I have no clue how all of that works out. So thanks.