A buddy of a buddy
runs a stable.
She has huge monthly expenses.
These costs are fixed.
Unfortunately,
most of her revenue
comes from a pay-as-you-ride
riding school.
One Saturday, she might have 100 riders.
The next Saturday, she might have no riders.
Her revenue is highly variable.
This can be a recipe for disaster.
If there’s a drop in revenue,
she can’t cut costs.
Her expenses remain.
When you build your business,
pay attention to
the type of revenues
vs
the type of expenses.
Ideally, you want these to match.
(Putting riders, in the example,
on a monthly fee program
would be one solution.)