Finance
Too Fast or Too Slow – Growth Can Still Cause the Same Cash-Flow Problem
Over the past few months, I’ve come across two companies facing serious cash-flow challenges but for completely opposite reasons. As I’ve discussed in previous blogs, cash flow is one of the most common challenges for growing companies. When you read the cases you may think they have cash issues because they are fairly new and small in size. However, in both of these examples the companies have been around for a while and both are in the hundreds with regards to number of employees.
Cash Flow: the Number One Challenge for Growing Small Businesses
Regardless of company size, cash flow and cash will always be among the most critical elements to keep an eye on for any company trying to grow. More small businesses get into trouble due to cash than any other reason.
Five Most Critical Financial Metrics to Growing Small Businesses
As a small business grows it is important to look at key financial metrics not so much to tell you what has happened but rather to give early indications of where things are changing. These metrics allow the leader to better prepare for upcoming changes in the business or unplanned events and set the right expectations for all stakeholders: customers, employees, and investors.