In Reply to: I stand corrected, but that just makes it even more difficult to allow room for revenue for the small posted by cfb on July 3, 2011 at 08:05:14:
Both of your scenarios can co-exist due to a third reason.
Many new companies survive for 3-10 years due to owners/investors funding.
They never make a profit. They invested assuming a larger demand than the market can sustain.
In some cases High End Audio is a tax deduction hobby for the owner of a rich company, doing other business.
Another case is Harman, who accepted a loss on their store sold products, because 2/3 of turnover was car audio. They got more profits from car audio parts, due to the fame of the brands, like JBL.
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Follow Ups
- many companies lose money for many years - Ole Lund Christensen 09:33:36 07/03/11 (0)