Huge amounts were spent on various activities, including some ineffective advertising, that didn't generate enough income for survival. Starting a business on a shoestring requires using more creativity to invest funds wisely for maximum return. There are three primary ways to generate cash - sales, capital investment, and debt. Investors expect to receive dividends or an increase in the value of their investment. Debt has to be repaid, usually plus interest.
Interest can be a substantial fixed cost.
Sometimes you can satisfy short-term financing needs by adjusting terms. For example, service businesses may require a deposit or retainer to accelerate cash flow. You also might be able to negotiate with vendors to extend the time of payment with no penalty. Adjusting for required activities and eliminating wasteful expenses. When you decide how the funds are going to be raised, you may need to plan on additional expenses relating to the activities required.