It may not seem an obvious thing to say but if you never look at your cashflow, then one day you will go bust. In the early days the link between profit and cash is usually clear – no profit no cash. But as soon as you give and receive credit, or make investments or simply have tax bills to pay, then even if you’re profitable you will have a cash requirement and this needs calculating. We have provided this information in many instances such as an architecture and design agency.
The information may well indicate a need to borrow. On one such occasion we raised £200,000 for an expanding marketing services firm; on another we obtained enough debtor finance for a body repair shop to fund the acquisition of a bigger business and sell the combined operation without any dilution of equity.