Cash flow for entrepreneurs part IV – working capital
Working capital is one of the main reasons profit and cash flow differ for a company, particularly a growing company, in any year. Not recognising that cash flow will lag profits can cause expensive or even terminal problems for a founder.
Working capital is poorly understood. Did you realise that negative working capital is actually a good thing? Watch on for a 7 minute primer on the topic.
We use Fever Tree, the fast growing soft drinks manufacturer, as a case study. Don’t assume that because you don’t manufacture physical goods that this topic doesn’t apply to you. If your customers pay you weeks or months after you invoice them, this is a must-watch.