Financially speaking how much of a hit should a program be able to take? How much can you take?
 

As a program (and business) owner I feel it's my responsibility to put the company in a position to sustain a major hit without employees, affiliates, or companies I do business with (photographers, hosting etc) to ever feel it. I would hope most of the big companies in this business are set up the same way. Brazzers took a huge multi million dollar hit when their money was seized and not a single affiliate or biz partner felt it. That's says a lot imo.


Assuming the money you've made up to today is safe but everything moving forward goes unpaid for a period of time. How long could your business survive if you didn't receive a single dime and still honored all of your expenses and commitments? 1 month? 2 months? 6 Months? 12 months?

How long do you expect a program to survive under those same conditions?

It's business, not charity -- the money stops coming in, employees get laid off.

Money can stop coming in due to temporary issues that may only last a few months. You would fire everyone and completely destroy your company over temporary issues?

Thank you for that reply obviously that is what I meant. The best example would be a program's processor going belly up or an affiliates best program going belly up. You can recover but you are going to take a loss of $$$. You wouldn't want to kill your company over a one month hit.

NOOF is on solid ground financially and could last quite awhile... :pimp

most companies are running pretty thin these days, only the strongest/smartest are surviving and in some cases thriving

companies like twistys didnt miss a beat when webmasterchecks had their issues and things like that are real comforting to affiliates, especially when you see all the threads about companies like SOBV and the others

Please, there's 11% unemployment and very, very few businesses that require super stars. Fire the people who got us into the no cash flow situation and harvest a new crop of drones.

Wow seriously? I would never want to work for you. I don't believe that is the way to run a successful company.

Well you and I know there's no danger of that.

I have a 12 months cash flow set aside, so that if I get hit, I can still operate with my 12 employees.

:2 cents:

LOL.

Shap who in this biz would you like to work for?

To answer the original question it really is up to the individual. Personally I lean on the conservative side. I should spend more and run thinner.

3 months is the bare minimum. Any company that can't continue to pay its bills (employees, affiliates etc) for at least 3 months while having not a single cent of income is a company that is bound to go belly up sooner than later.

Personally I always reserve at least 12 months of income for Armageddonlike events.

same here, 12 months without liquidating anything or doing any cutbacks....






.

If I'm doing my job then I have nothing to worry about.

im sure the amount that equals would be stored in the average persons piggy bank.

i think 6 months is enough time
after that you might as well just call it quits

I think 12 months is a must.

This is porn, it's not can or cannot, it's will or will not.

It can take a while to turn things around and build back up, especially in the case of a billing company closing and having to rebuild that steady re-bill foundation. But all of your eggs shouldn't be in one basket regardless, so 6-12 months is a good reserve.

Since 1999 we've had 4 billing companies close and keep funds, each time it causes some type of set back. Sadly it's the nature of the business but thankfully it's never caused any serious issues that we couldn't come back from.

With that said, should CCBill ever stop paying I think it's safe to say 80% of adult companies would not be able to make affiliate payments, or mortgage payments the following month.