The healthiest growth will only occur when you prioritize profit for your business.
As a business owner, your job is to maximize profit. The size of the business isn’t the goal. Big or small, work on your financial health, and as you build confidence you will gain insights, recognize profitable areas, and grow naturally.
Let’s take a look at how growth will affect your cash flow.
Cash Flow And Growth
Growing your business too fast can negatively affect cash flow.
Have you built a cash reserve to fund:
- Start up costs
- More employees, more systems
- Accounts receivable and payable cycle management
Too much growth will hurt your business if you can’t keep up with the expense.
Rapid Growth Issues
Growing your business too fast can dead end your cash flow.
Without a plan it can be difficult to:
- Maintain quality
- Fulfill large orders
- Manage the cash flow cycle, timing receipts and payments
Too much growth will hurt your business by increasing your costs before increasing your revenue.
Healthy, Profitable Growth
It’s important to make sure your growth is financially sustainable.
A growing business is healthy and profitable when it is:
- Easy to predict
- Easy to expand
- Growing fast, but also growing steady
Profit must be a priority for your business from the start.
Your job is to maximize profit.
The healthiest growth will only occur when you prioritize profit for your business.
- To grow your business, build a cash reserve fund
- To mitigate your risk, plan ahead
- To sustain your profit, be steady and predictable