أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
Well, there are carious risks associated with growth, we can broadly categorize them into external and internal factors.
Lack of external financing for assisting sudden spurt in growth is an external factor.
Cash Management as you have rightly framed in the question is one of the factors, In2001-02, there was a breed of Gazelle companies which came into spotlight in Sweden. They shot to fame and similarly vanished with a few exceptions. "Gazelle" refers to their sudden leap to success.
An entrepreneur who could not keep up with the growth explained,"When size and orders rose, more employees were needed and they had to be covered. In turn increase in accumulated wages drained the cash reserves"
Another entrepreneur with a similar fate added," An increase in sale happened faster than expected which resulted in mounting costs during transition period, The company was promised an overdraft facility which was later revoked by the bank leading to bankruptcy", Now had he been provided with the facility, it could have been a successful story.
Therefore agreeing to a question when it comes to economics is very difficult but it indeed is a very valid question.
