Growth can bankrupt a profitable company. Sounds impossible until you understand cash. Revenue and profit are not cash, and fast growth burns through cash buying the very things that fuel it. The P&L looks great right up until the account is empty. Sit down with your accountant, build a cash flow forecast, and grow at a pace your cash can actually support.
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Do you know that you could actually show a million dollars in profit and still run out of money? Revenue is not cash. Profit is not even cash. Fast growing companies eat cash. You're investing in things. You're buying new trucks. You're investing in inventory. All of this stuff needs to be paid attention to. Often owners obsess over the P&L and never pay attention to the balance sheet. The balance sheet tells you exactly how much cash you have in the business and how much you need to be investing and when you can invest in certain things. Do this. Get with your controller or your CFO or your accountant and understand what your cash flow forecast looks like. This is what is going to keep your company healthy. Allow you to continue to invest and put a barometer on your growth so that you can do it responsibly.
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