When Revenue Grows but Cash Flow Fails: The Hidden RiskWhen Revenue Grows but Cash Flow Fails: The Hidden Risk
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A small HVAC business owner called me. Revenue was up 40%. His bank account had more money than ever. Everyone told him: "You're crushing it." But he wasn't sleeping. Something felt wrong. So I started reviewing the books. Then I noticed something strange. Revenue went up every year. Profit went up every year. But cash flow never improved. Why?
His customers were paying slower every year. Year 1: Invoices paid in 18 days. Year 2: Invoices paid in 31 days. Year 3: Invoices paid in 52 days. On paper, the business was growing. In reality, he was financing his customers. The lesson?
Many business owners think growth creates cash. Sometimes growth destroys cash. A business can die while looking successful. That's why I don't just look at revenue. I look at how fast cash comes home.
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