Money Secrets Season 3, Episode 69: Why growing businesses are hungry for cash. — Growing businesses can find themselves running out of money even when sales are increasing. Tune in to learn why growth can create cash flow challenges, how to spot the warning signs early, and what you can do to build a business that grows sustainably.

In this episode of Money Secrets, Fi unpacks a challenge that catches many small business owners by surprise: **the faster your business grows, the more cash it often needs.**

Listen to Episode 69

What You’ll Learn in This Episode

Why growing businesses often run out of cash. Increased revenue doesn't always mean more available money, especially when expenses need to be paid long before customers pay you.
The hidden cash flow challenge facing product businesses. Stock purchases often need to be funded months before sales revenue arrives.
Why pricing plays a critical role in sustainable growth. Healthy margins help fund future stock orders, team growth, and business expansion.
How rapid growth can create financial pressure. Growing faster than your systems, processes, and cash flow can support may create unnecessary risk.
When it may be time to slow growth intentionally. Adjusting marketing activity, launch schedules, or pricing can help create a more manageable pace of growth.
How pre-orders can improve cash flow. Using customer deposits to help fund inventory purchases can reduce financial pressure and minimise excess stock.
Why service businesses experience similar cash flow challenges. Hiring staff often requires paying wages before the revenue generated by those team members arrives.
How waitlists can support smarter hiring decisions. Building future demand before recruiting can reduce risk and improve confidence when growing your team.
The difference between hiring billable and non-billable team members. Understanding how each role contributes to growth helps you make more strategic hiring decisions.
Why non-billable roles can still drive revenue growth. Support staff can free up business owners to focus on business development, leadership, and growth activities that generate more income.
The importance of planning for growth before it happens. Having clear financial forecasts and growth strategies can help avoid cash flow surprises.
How to think differently about growth and profitability. Sustainable growth requires balancing ambition with strong financial foundations.

Growing businesses are hungry for cash (EP#69)

Introduction

We've made a lot of progress as a society in many areas, but one thing that hasn’t changed enough is our relationship with money. If we want to tip the scales in favour of marginalised people, we need to understand the secrets to making money in small business.

The more we talk about money — especially the secrets that usually stay behind closed doors or on the golf course — the more empowered we become. My mission is to get more money into the hands of good people, specifically business owners like you.

Because I believe small business can change the world. And to do that, we need to be making more money.

Acknowledgement of Country

This episode was recorded on the lands of the Wurundjeri People of the Kulin Nation. I’d like to acknowledge them as the Traditional Owners and custodians of this land and water that I live, work and play on.

I pay my respects to Elders past and present, and recognise that sovereignty has never been ceded. This always was, and always will be, Aboriginal and Torres Strait Islander land.

Why Growing Your Business Can Create Cash Flow Problems

Growth is exciting. More customers, more sales, more opportunities.

But what many business owners don't realise is that growth often requires more cash long before it generates more cash.

In this episode of Money Secrets, Fi explores why growing businesses can become surprisingly cash-hungry and explains the common cash flow challenges faced by both product-based and service-based businesses.

Drawing on her experience as a chartered accountant and money coach, Fi breaks down why increasing revenue doesn't always mean more money in the bank. She shares practical strategies to help business owners manage growth sustainably, improve cash flow, and avoid putting unnecessary pressure on their finances.

Whether you're ordering stock, hiring team members, or scaling your services, this episode will help you understand why growth can feel financially uncomfortable and what to do about it.

Product Businesses: The Hidden Cost of Growth

Product businesses often face significant cash flow pressure because inventory needs to be purchased in advance.

As demand increases, stock orders become larger and more expensive. While sales may be growing, the business can still feel constantly short on cash because future inventory purchases need to be funded today.

Fi explains that this creates a cycle where businesses can feel like they are always chasing the next stock order, regardless of how well sales are performing.

Why Pricing Matters More Than You Think

One of the first places to look when cash flow feels tight is pricing.

Healthy margins don't just cover today's costs. They also help fund future growth, including larger stock orders, new team members, systems, and infrastructure.

If your business is consistently struggling to fund growth, it may be a sign that your pricing needs attention.

Are You Growing Too Fast?

Growth is often celebrated, but Fi encourages business owners to consider whether they are growing faster than their systems, processes, and finances can comfortably support.

Rapid growth can create operational challenges, increase cash flow pressure, and make it harder to deliver a consistent customer experience.

Sometimes slowing growth slightly can create a stronger and more sustainable business in the long term.

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How Pre-Orders Can Improve Cash Flow

For product-based businesses, pre-orders can be a powerful strategy.

By collecting deposits before placing stock orders, businesses can reduce financial pressure while also gaining greater confidence in customer demand.

Pre-orders can also support sustainability goals by reducing excess inventory and minimising waste.

Service Businesses Face Similar Challenges

While service businesses don't usually need to purchase inventory, they often face a similar challenge when hiring team members.

New staff need to be paid before the revenue generated by their work starts flowing into the business.

This creates a lag between the investment and the return, which can temporarily reduce cash flow even when the business is growing successfully.

Why Waitlists Can Support Sustainable Growth

Fi shares how waitlists can help service businesses grow more strategically.

Rather than hiring immediately and hoping the work follows, building a waitlist of future clients can create confidence that there is enough demand to support a new team member.

This approach can reduce risk and make hiring decisions feel far more manageable.

Hiring Non-Billable Team Members

Many business owners feel comfortable hiring revenue-generating team members but become hesitant when considering operational or administrative roles.

Fi encourages business owners to think differently about these positions.

Support staff may not directly generate revenue, but they can free up business owners to focus on leadership, marketing, business development, and other activities that drive long-term growth.

Rather than viewing these roles as an expense, consider them an investment in the future capacity of the business.

Key Takeaways From This Episode

Why growing businesses often become cash-hungry.
How stock purchases create cash flow pressure for product businesses.
Why healthy pricing is essential for sustainable growth.
The risks of growing faster than your business can support.
How pre-orders can improve cash flow and reduce waste.
Why service businesses face similar growth challenges.
How waitlists can reduce hiring risk.
The difference between hiring billable and non-billable team members.
Why support staff can drive long-term revenue growth.
How to plan for growth without creating unnecessary financial pressure.

Final thoughts

Growth is exciting, but it isn't always comfortable.

Understanding the relationship between growth and cash flow can help you make smarter decisions, avoid unnecessary financial stress, and build a business that is both profitable and sustainable.

By planning ahead, pricing appropriately, and growing at a pace your business can support, you can create long-term success without constantly feeling like your business is demanding more cash than you can provide.

Outro

Thank you for listening to Money Secrets. If you loved this episode, please subscribe, share it with a friend, or leave a review. Your support helps us get these conversations into the hands of more good people who deserve to thrive in business.

We’ve come so far as a society in many ways, but money is one of the areas where progress hasn’t been enough. If we want to tip the scales in favour of marginalised people, it starts with understanding the secret: money in small business.

In this podcast, Money Secrets, host Fiona (Fi) Johnston—Chartered Accountant, small business advocate, and impact enthusiast—dives into the conversations we need to have about money. The secrets that once stayed behind closed doors (or on the golf course) are finally out in the open.

Fi’s mission? To get more money into the hands of good people, like you. She believes small businesses have the power to change the world, and the key to making a bigger impact is to make—and manage—more money.

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Thank you to everyone involved for bringing this podcast together. We are excited to hear from you with any questions, feedback or suggestions for future episodes that you might have. Send a Direct Message to @peach.business

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