Why is cash flow the largest single cause of small business failure?

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Question

Why is cash flow the largest single cause of small business failure?

Accepted Answer

Money often leaves the business before it arrives, and reserves are thin — Award 1 mark. A profitable business can fail for want of cash, particularly where sales are made on credit. Small firms have least reserve to absorb the gap.

Answer

Banks refuse to lend to small businesses

Answer

Cash flow forecasts are legally required and often wrong

Answer

Small businesses are rarely profitable

Answer

Money often leaves the business before it arrives, and reserves are thin

One real Management of Business question.No signup. 30 seconds.

One real Management of Business question.
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