The company we founded in 2015 was producing goods. The model was like this: customers paid 30% upfront, and the rest after 60 days. We paid the supplier immediately for the costs. The first two years went really well customers came in, orders picked up. We felt safe because we were growing without taking on debt.
But at the start of the third year, I checked the debt records. Our customers' 60-day terms had mostly stretched to 120 days. Since we paid costs immediately, cash flow got tight and I was nearing my credit card limit. We looked profitable on paper, but there was no money in the bank.
At the start of the fourth year I did an analysis: I said if we increase the number of customers by this much, the model collapses. It was already collapsing. We tried raising prices to boost profitability, but customers left, only a few remained. Final decision: shut the doors. We laid off employees, paid off remaining debts, and ended it after three and a half years.