Growing pains
I had a good chat with a friend recently who’s running a young fast-growing service business that offers web-related services. Not surprisingly, his main concern is cash flow – funding the business as it takes these big steps.
Get big fast
Growing quickly is a wonderful problem to have, but not an easy one. [see the dangers of "over trading"]
Getting an understanding of expected cash flows in this time is critical.
- Firstly, to understand what your business’ key drivers to manage are [working capital -> debtors, creditors and possibly inventory]
- Secondly, to know what sort of shortfall you’re looking at so that you can arrange the necessary financing.
Don’t worry, be happy [and find solutions]
If you’re going to worry, knowing what you should worry about is much better than worrying about everything. Might sound a bit funny but I know from personal experience that its true.
It’s also easier to find solutions when you can cut through to what the actual problems are. No, don’t say ‘cash’ is the problem. What I mean is – are your payment terms too long; are you under-charging for your services; are you spending on too many things that don’t generate any value. Answer some of the difficult questions and chances are you’ll be able to put together a much more sustainable solution to your problem.
Or leave it and hope for the best.
But then you’ve got to ask yourself – are ya feelin’ lucky. Well, are ya?
Photo – “Young sprout is growing up” by BONGURI via flickr
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