I just read an article by Tim Berry on Entrepreneur.com
In it he shares why increasing sales doesn’t always improve cash flow.
Consider this scenario:
“One of the toughest years my company had was when we doubled sales and almost went broke. We were building things two months in advance and getting the money from sales six months late. Add growth to that and it can be like a Trojan horse, hiding a problem inside a solution. Yes, of course you want to grow; we all want to grow our businesses. But be careful because growth costs cash. It’s a matter of working capital. The faster you grow, the more financing you need.” – Tim Berry.
There’s more, check it out on Entrepreneur.com