Growing Broke – Cashflow (Part I)



At DeepSky, we know that unfortunately just working hard at your small or medium-sized business sometimes isn’t quite enough. Even rapid growth and making money with your goods or services might not be enough. In fact, you can “grow broke” and end up with your business becoming an epic fail!

Rapid Growth = Big Trouble

The sad truth is that growth doesn’t automatically guarantee profits. In fact, rapid growth could mean that you’re actually running into trouble before you even realize it. Here’s how it happens:

  1. Revenue goes up.
  2. Cost of goods goes up.
  3. Operating costs go up.
  4. Net profits are not going up.
  5. You’re losing money.
  6. The faster you grow, the more you lose.

Don’t Just Throw Money At It

This is one issue that unfortunately can’t be solved by just throwing money at it. You’ll only be prolonging the agony and repeating the process over and over. Then, one day, you’re simply out-of-business!

Fix the Issue

Before that happens, you need to either fix your profitability issue or fix your cash flow issue. Which one you choose to focus on depends upon what it is that’s actually causing your business to “grow broke”. We can help you to figure that out and put together a strategy to turn your business around.

Some Cash Truths

In business, you need to know a few truths that relate to your available cash:

  1. Profit doesn’t equal cash-flow.
  2. Credit isn’t really capital.
  3. Growth can suck out all of your cash.
  4. Cash gives your business a much-needed cushion.

Be a Smarter Entrepreneur

What you want is to be one of those smart entrepreneurs who has learned these important lessons prior to your future options becoming limited. Since “growing broke” strikes more businesses every day than you might think, you need to explore the possibilities of it happening to your business. That way, you can avoid or fix it, further ensuring the financial future of your business. Smart business owners get help before “growing broke”, not after. So, don’t wait until it’s too late. The sooner you get help, the better chance your business has of surviving to see another day.

Get Your Free Quote Today

Simplifying your accounting processes and finding the answer to the problem of “growing broke: is just a phone call away. At DeepSky, we can help you to find the best solution, so contact us at (949) 200-6829 for your free DeepSky accounting quote.

In the next article, we’ll talk more detail about how to avoid growing broke.