Growth is a financing decision disguised as a sales achievement
Every business has a growth rate its balance sheet can support and a growth rate its ambition prefers. When those diverge, the business does not slow down — it borrows, and the borrowing outlives the growth.
Growth consumes cash before it produces any. The only question is whether that was planned.
Owners plan growth in revenue terms and discover the working capital, staffing and management requirement afterward.
Unfunded growth is the most common way a strong business becomes a fragile one. Funded growth compounds.
How to know if you have this
- Revenue targets exist without a cash plan attached
- Hiring lags demand by a quarter or more, every time
- The line of credit rises with revenue and never falls
- Nobody has stated the maximum growth rate the business can self-fund
How Advisory Motion solves it
- 01Calculate your self-fundable growth rate from margin, working capital and reinvestment
- 02Model the cash and headcount the planned growth actually requires
- 03Sequence hiring, capacity and capital so each is funded before it is needed
- 04Define the trigger points where the plan should slow or accelerate
34% wanted, 19% fundable
The model put the self-fundable rate at 19%. The owner chose a staged 24% plan with a defined financing bridge rather than the 34% target — and finished the year with the credit line untouched.
Illustrative composite · not a client identification