North East Business News

Issue 128

Growth is usually seen as a sign that a business is doing well. More customers, larger contracts, new locations, additional staff and increasing turnover are all things business owners understandably want to see. But growth also brings financial pressure, and sometimes that pressure arrives well before the benefits. A new contract might look highly profitable on paper, but somebody still has to fund the people, materials, stock or equipment needed to deliver it. A business may need to recruit before additional revenue starts to come in. Suppliers may need paying in 30 days while customers pay in 60. More stock might be required. Premises may need to expand. Systems that worked perfectly well for a smaller business may suddenly need replacing. In other words, growth often costs money before it makes money. This is where a business can find itself in a difficult position. Sales are increasing. The order book…