Cash Business Preference from Bus Roots

“capital in investments with returns coming in the long term. He pre¬ ferred investments that carried their own operating costs and generated profits from the start and for the long term. His idea was to meet consumer demand by providing the medium for entertaining the mar¬ ket (racetracks); advertising the goods (newspapers); transporting goods and individuals (busses); and providing their insurance, savings and investment programs. Significantly, all of his holdings were in op¬ erations that were essentially cash businesses — just like busses. His companies would also own the land, and perhaps the buildings on the land, in which his businesses would operate. Before long, he would control a company that was in the business of lending money to finance purchase of consumer goods.”

“debts had to be covered simultaneously, but the company as it operated when Desmarais stepped in wasn’t generating enough revenue to do so. The company’s one advantage was that the bus business is a cash business; as long as the busses roll out of the bams each day, some hard cash rolls in. Desmarais’s task with Sudbury Bus Lines was straightforward — keep it operating and bringing in cash, while fig¬ uring out how to earn more, cut costs, and make the debt manageable. Defining the task was simple; execution was another matter.”