Are You Growing Broke?
by CFOEd
Do you know the main reason why most small businesses fail? It may surprise you to learn that many commercial lenders often report that the main reason small businesses get into borrowing troubles that eventually lead to bankruptcy is that they attempt to grow too fast. Though a business may be profitable, rapid growth in sales can create a situation where the company does not have adequate cash to pay for bills as they come due.
The notion that "success can kill" is one of the most puzzling concepts for a small business owner to fully grasp. Most business owners consider rapid sales growth to be an ultimate goal. There is no problem with having this as an objective as long as the financial consequences of growth are understood and adequately planned for. If not, as you achieve your sales goals, your business may contract a difficult-to-cure illness known as "Growing Broke!"
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