According to the SBA, only around 50% of new businesses survive 5 years.
90% of failures are caused by improperly managing the money going in and the money going out, and it’s often this cash flow crisis that pushes the business over the edge.
Even more surprisingly, 60% of businesses that fail are still showing annual profit.
Profit and cash flow are 2 very different things.
Your business may be generating a large profit margin and may be experiencing strong growth, but at the same time may not have cash to pay suppliers, lenders or employees.
Maintaining a strong and flexible financial position is crucial to every business, and efficient cash flow management can mean the difference between success and failure.