In new businesses, financing generally comes first, because a company must have money before it can invest and operate. Investing typically occurs next as the business invests in the assets it needs for operations. Operating activities follow as the company conducts its core business. At Lands' End, operations consist of manufacturing and selling business machines. Investing activities are typically next most important because how much money comes in also depends on how wisely a business invests.
Good investments generate a lot of cash, while bad investments lose money.
For Lands' End, a good investment may be robotic equipment that speeds the process of order filling and reduces labor costs. A bad investment for Lands' End may be an expansion into electronic products, which Lands' End manager may not understand well and which may cause the company to lose money. For most ongoing businesses, financing activities are less important than operating and investing activities. A company that operates successfully and makes intelligent investments will have no trouble financing its operations. In deciding how they will operate the business, Lands' End managers must determine what merchandise they will sell and how they will market these goods.