Businesses in New Zealand are optimistic about growth over the next year. And for those entering this exciting phase, there are expectations that profit will increase as well.
A growing business can have growing pains. Some of these may be increasing marketing costs, stock-holding requirements or incurring more labour expenses necessary to make a sale.
These extra costs are going to impact on your cashflow, especially if you're finding that your accounts receivable ledger is also growing as you extend a larger credit supply to a growing customer base.
CAD Partners put out some interesting research about small business cashflow, illustrating that it can be as long as 171 days that you can be out of money when a sale is made. That's nearly half a year.
* On day one, you buy stock to sell.