Most people have heard of the term “cash cow”.  It generally refers to a mature business where growth and margins have stabilised, and investment is more on a “care and maintenance basis”. These businesses provide a substantial, positive cash flow.

By contrast, a young growing business is pretty much the complete opposite. As businesses grow, they require a continuous cash input to fund working capital, additional staff and business assets. It is a paradox that many smaller, growing businesses, despite being profitable, simply run out of cash.

The main causes are usually poor planning and under-capitalisation. Through focusing on growing sales, they under-estimate the volume of cash required to fuel that growth. Worse, as cash becomes ever tighter, they get locked into expensive short-term finance arrangements. Many such businesses are forced to sell out to larger competitors at fire sale prices or worse still, they fail.

These scenarios, however, can be avoided with careful planning and expert advice. It’s a sad fact that many smaller, growing businesses are simply not “borrow ready”, ie they are not structured in a way that would make them attractive to specialist lenders who are experienced in funding growth.

VMG Capital, with its unique diagnostic tool, the VMG Score, has a history of guiding businesses to a successful growth/funding strategy.

Consider these five questions:

  1. Could you benefit from having ready access to attractively priced funding other than through a bank or finance company?
  2. Do you have a compelling business story but find it difficult to get lenders to listen?
  3. Have you tried consultants but found the experience less than satisfying?
  4. Do you have a clear idea of what you want your business to become?
  5. Would you like to be free of expensive, short term lenders who do not really help your business?

Do not be a victim of the growth/cash paradox. If you answered “yes” to any of these questions, then you need to call VMG Capital today.