Can You Make Profits And Still Go Bust?
Asoka Asoka is an Independent Finance Director and Management Consultant based in London. He works with growing companies as their part time Finance Director and is the Founder of AKCA Consulting, which helps companies improve their financial health. Yes, you can! Here are some scenarios where your business can be very profitable and still go bust. 1. Growing too fast – a business can grow too fast and tie up cash in debtors and inventory, running out of cash to pay suppliers. 2. Big deal sours – too much attention is put on one big deal over a long time which goes sour. Meanwhile you’ve lost your other customers and run out of cash. 3. One large customer breaks the bank – they can pay their bills very late, stop doing business with you or go bust themselves. Related Article: 5 Tips For Starting And Running A Successful Startup, engineer.ai 4. Supplier jacks up the price – your inventory shoo...