A business can be survived due to its sales volumes. As business owners, you should often review and increase your investment along the way. While every business misses sales forecasts at one time or another, why can the incorrect sales forecasting lead to a cash flow problem?
If your business misses to satisfy the expected demand, and you haven’t solved this concern on time, your business can be lead to the financial loss. For sure, your cash flow problem is coming. On the other hand, growing too fast in your business is a good investment, yet also a problematic issue due to the lack of reserved resource and cash flow.
In both situations, a strong sales forecasting and analysing are the healthy food for your business. Never underestimate the risk around your business. An emergency cash reserve should be there for at least three months ahead due to the forecasted expenses. And make other ways to get more reserve cash if needed.