Leading Entrepreneurship

What are the business issues that eat cash for high-growth firms?

If you are finding yourself in a shortage, one of these five areas are typically to blame:

• Net losses, usually from mismanagement of pricing, vendor contract negotiations or overhead (check the gross profit margin on your profit & loss)
• Increases in accounts receivable and/or inventory due to sales growth, delcining effeciency or poor seasonality planning (check the current assets levels on your balance sheet)
• Large or growing amounts of current liabilities (balance sheet)
• Necessary expansion and maintenance of property and equipment (again, balance sheet)
• In some instances, stock repurchases or dividends (yet again)

Remember that you cannot sell yourself out of three of these issues, and the other two are very difficult to sell yourself out of. Fix the root problem and your investors (including yourself) will be much happier.