Over the past few months, i have been coaching a business client who found themselves in cashflow difficulties, unable to pay the ATO and other loans after 18 months into buying their business. Their turnover had increased 300%! Their staff had doubled and the business was turning a decent profit.
So how did they get into such trouble? Firstly, their wages were too high. They kept hiring people thinking they needed more help, without doing their sums.
But their major problem was their debt level. After alot of investigation i found that their profit simply didn’t cover their loan repayments, and they were completely unaware of this, until we did a deep dive into their financials.
Be very aware, not only of your debt level, but the repayments and affordability. It can get out of control too quickly.
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