Reinvestment vs distribution

Reinvestment vs distribution — the recurring decision that is the owner’s actual job once an operator runs the business: where does this quarter’s free cash go? The menu: reinvest in the business (only if the marginal project beats the hurdles), distribute to the portfolio (remembering the 10% dividend gate out of a corporation), retire the seller note early (a guaranteed return at the note’s rate), build the entity’s reserve, or buy a system (often the highest-IRR line — the POS that recovers 2% shrinkage beats another cart). Written as a standing rule, not re-litigated quarterly.

First used in: 4.4 · Installing the operator