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Don't Get Trapped: Working CapitalEvery company I speak with wants to grow. Growth is a sign of vitality and is or should be a source of profit. Perhaps, profitable growth is a better way to describe what everyone aspires to achieve.

If that is the goal, then what gets in the way more often than anything else? The answer is two-fold.

The first explanation involves “people working on the wrong things. Inadequate staffing in quality of quantity can stifle growth. But so can spending valuable people-time working on the wrong things—either customers or products that are not profitable or market segments that are unattractive (for a whole range of reasons)—or it could be just battling complexity caused by customer, product or market proliferation in the past.

The second (and most common) problem is shortages of working capital. Few small companies and a surprising number of larger ones overlook what I call the “working capital trap.” Here’s how companies fall into the working capital trap and what kind of damage it can do.

A New Product is Born

To read the full, original article click on this link: Don’t Get Trapped: Working Capital | Small Business Trends

Author: John Mariotti