A new contract. Another location. A larger fleet. An acquisition.
Each can create opportunity. Each can also commit cash well before it generates a return.
Before you commit, put the decision through five practical tests:
PROFITABILITY
What will the opportunity contribute after additional staff, operating costs, overheads and funding costs?
CASH FLOW
When will customers pay—and what must you pay before that happens? Wages, stock and suppliers may need funding months before cash arrives.
CAPITAL REQUIRED
What is the full investment? Include equipment, implementation, working capital and a realistic contingency.
DOWNSIDE RESILIENCE
What happens if sales take longer to build, margins tighten or customers pay late? How much headroom remains?
RETURN ON CAPITAL
Does the expected return justify the money committed and the risk taken?
Consider a business investing $500,000 in an expansion expected to generate $100,000 in annual EBITDA.
That is a headline EBITDA-to-investment ratio of 20%. But it does not yet show the cash available after interest, tax, replacement equipment and working capital—or how long the expansion will take to reach that earnings level.
The decision becomes clearer when profit, cash flow and the balance sheet are modelled together.
A three-way financial model helps you assess the opportunity, identify the funding gap and understand what the business can withstand if assumptions change.
At Advanced Finance Group, I combine my experience as a Chartered Accountant and finance broker to help business owners assess growth opportunities and the funding needed to support them.
Planning an expansion, acquisition or major equipment purchase? Let’s assess the numbers before you commit the capital.
📩 Message me to discuss a Business Growth & Capital Review.
🌐 advancedfinancegroup.com
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