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Christmas Don't Grow Broke

Business Planning: Christmas - Don't Grow Broke

Author: Brandon Jordan, CFP®, CHFC®, CEPA®, CVGA®, CLU®, MSA, EA | CEO of Impact Advisors Group

Most business owners are familiar with the cliché “if you’re not growing, you’re dying.” It’s technically true as it stresses the importance of continuous growth and adaptation in order to remain competitive and healthy. It’s based on the idea that a business needs to evolve and change like a living organism. If a business doesn’t adapt to market changes or stagnates, it will eventually decline and fail.

Unfortunately, many business owners only/primarily look at revenue as the metric to assess growth. This can lead to disastrous outcomes!!! Growing Broke is a very real possibility for many businesses. 

Revenue is Vanity

  • This is fun to talk about with friends, colleagues and professionals; but, we cannot buy groceries, pay for college, or take family vacations with revenue. 

Profit is Sanity

  • Profits are good, but even profitable companies can fail (a.k.a. Grow Broke).

Cash Flow is King

  • Business thrive or die on Cash Flow.

In order to avoid a Growing Broke scenario, the business owner (or leadership team) MUST know the company’s sustainable growth rate. If the actual growth rates exceeds the sustainable growth rate, then it’s only a matter of time before cash is entirely consumed… and it becomes VERY challenging to make payroll, pay vendors, and/or pay payroll taxes. This will require them to change their capitalization (e.g. using debt and/or equity financing options) and often becomes one of the most stressful situations for a business owner AND their family.

As a Christmas gift for the business owner(s) in your family/friend group, let’s help them avoid this scenario. Introduce them to IAG! 

Impact Advisors Group LLC (“[IAG]”) is a registered investment advisor offering advisory services in the State of Massachusetts and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. The information on this site is not intended as tax, accounting or legal advice, as an offer or solicitation of an offer to buy or sell, or as an endorsement of any company, security, fund, or other securities or non-securities offering. This information should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made will be profitable or equal any performance noted on this site. The information on this site is provided “AS IS” and without warranties of any kind either express or implied. To the fullest extent permissible pursuant to applicable laws, Impact Advisors Group disclaims all warranties, express or implied, including, but not limited to, implied warranties of merchantability, non-infringement, and suitability for a particular purpose. IAG does not warrant that the information on this site will be free from error. Your use of the information is at your sole risk. Under no circumstances shall IAG be liable for any direct, indirect, special or consequential damages that result from the use of, or the inability to use, the information provided on this site, even if IAG or a IAG authorized representative has been advised of the possibility of such damages. Information contained on this site should not be considered a solicitation to buy, an offer to sell, or a recommendation of any security in any jurisdiction where such offer, solicitation, or recommendation would be unlawful or unauthorized.
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