Business growth, everybody is talking about growing their businesses. Do you take it steady, borrowing little but reinvesting your profits? Or do you expand rapidly borrowing as much as you can?
You may not grow very quickly if you have to wait to reinvest profits. The alternative means profit for each pound invested will be much higher. To use financial jargon, your Return on Investment (ROI) will be better. This is because you are putting far more cash to work than your initial investment, by using external funds. But with that higher return come risks. What if the providers of those funds – lenders, investors or your suppliers – suddenly get cold feet and want their money back?
Many businesses aim for a balance, using some external finance or funding without becoming too vulnerable. But in business you have to take some risks and inevitably it can go wrong. If you run a business and have hit a cash crisis contact Wilson Field whilst there are still ways to save your business.