The month you grew fastest was the month you nearly ran out

Profit and cash pull apart hardest when things go well, and the arithmetic that sets how fast a business can grow on its own money is rarely run.

By Steve 5 min read
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A business can be profitable on every job, growing on every measure the board looks at, and still find itself watching the bank balance daily. This is not a contradiction or an accounting error. It is the predictable result of growth being a use of cash rather than a source of it, and the moment of maximum strain tends to arrive precisely when the order book looks best. Growth is bought before it is sold The mechanism is the cash conversion cycle. Between the first pound spent on delivering work…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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