While most entrepreneurs are in business to grow, that growth itself is often the greatest cash flow issue they have to deal with, especially during the first five to seven years of business. As a company grows, more and more assets are tied up in working capital as well as plant and/or facility costs. During these early years it is absolutely critical that small business owners have access to both short-term and long-term capital.
The Snowball Effect
According to the Harvard Business Review, it takes 40 to 60 cents on the dollar for the average small business to fund new business growth. That money is needed to fund the things that deplete the cash in any business:
1. Materials and/or Merchandise
2. Labor
3. Accounts Receivable
The Snowball Effect
According to the Harvard Business Review, it takes 40 to 60 cents on the dollar for the average small business to fund new business growth. That money is needed to fund the things that deplete the cash in any business:
1. Materials and/or Merchandise
2. Labor
3. Accounts Receivable