The payback was nine months. The cash came back in nineteen.

A healthy payback figure and an empty bank account are not a contradiction: they are two different measurements, and only one of them pays wages.

By Steve 5 min read
Abstract bridge artwork for The payback was nine months. The cash came back in nineteen.

Acquisition cost payback is one of the few numbers a growing business tends to calculate carefully. Cost to acquire a customer, divided by monthly revenue multiplied by gross margin. Nine months, say. Comfortably inside the twelve-month rule of thumb that most people carry around. And yet the same business, growing steadily with that nine-month payback, keeps finding itself short of cash at the exact moment things are going well. Both numbers are correct. They are measuring different things. The payback calculation measures when a customer becomes accretive in the accounts.…

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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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