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Maintaining a healthy cash flow is one of the stumbling blocks that company directors of small businesses struggle with, StartUp Co said yesterday.
Cash flow is one of the most important aspects of running any business - large or small. It is also one of the single most important reasons why many businesses fail - regardless of how good the business is.
StartUp Co suggested that the cash flow problem which many businesses face may stem from the fact that there is a reluctance in Britain for people to talk about money.
This is especially the case for business to business companies who sell credit. The situation is made worse by the fact that some debtors - both large and small - will put off paying until they are actually chased.
There is also the worry, StarUp Co said, that pushing "too hard" for money that may be due could harm the selling relationship.
And for many small businesses who are still dependent on a small number of customers, the thought of losing customers sometimes outweighs the real value of that customer in terms of their "ability to maintain a cash flow which is going to support the business into the future".
John De Groot, director of StartUp Co, said: "Cash flow certainly is one of the stumbling blocks that small businesses struggle with…because of a number of factors [including] actually keeping track of their cash."
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