One of the biggest cash flow lessons I’ve seen came from a business that increased sales by 40%.
On paper, they were winning:
More customers.
More orders.
More revenue.
Yet their cash position actually got worse.
Why?
Because growth came with:
Longer payment terms
Higher stock levels
Increased overheads
More pressure on working capital
The business was growing, but the cash wasn’t keeping pace. This is why it’s often said that revenue is vanity but cash flow is reality. Growth without cash flow planning can create more risk, not less.
Before chasing the next sale, ask yourself:
Can the business fund that growth?
How long will it take for the cash to arrive?
What additional costs will growth create?
What happens if customers pay late?
A growing business can still run into serious financial difficulty if cash isn’t being managed properly. Growth is important however sustainable growth starts with cash flow, without cash there is no growth.
What would you prioritise first in your business right now: growth or cash flow?
