3 different ways to grow your business
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10 20 30 50 70 100 150 1 -2 -6 -8 -20 10 40 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Organic Growth no working capital finance Sales Cash flow q Growing business usually burns cash q Adequate financing is required to finance growth q Difficult to pay dividends as rising sales are not matched with rising cash flows
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Transcript of 3 different ways to grow your business
1020
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1 -2 -6 -8
-20
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Year1 Year2 Year3 Year4 Year5 Year6 Year7
OrganicGrowthnoworkingcapitalfinance
Sales
Cashflow
qGrowingbusinessusuallyburnscash
qAdequatefinancingisrequiredtofinancegrowth
qDifficulttopaydividendsasrisingsalesarenotmatchedwithrisingcashflows
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Year1 Year2 Year3 Year4 Year5 Year6 Year7
OrganicGrowthwithworkingcapitalfinance
Sales
Cashflow
qGrowingbusinessusuallyburnscash
qWorkingcapitalfinancecanbridgethefundinggap
qAdequatefinancingallowsgrowthtogenerateadditionalcashalbeitataslowrate