Fast growth, tight cash: Why successful CPG brands run out of working capital

Kristen Palmer, 4 min read

This lesson is an essay published by New Hope Network.

Read the essay

What you'll get

Kristen Palmer, a bank vice president who sells receivables financing, shows with a worked example how a growing brand can run short of cash while sales rise, and how to count the days cash is tied up in inventory, in waiting for customers to pay and in supplier terms. Her example is a food brand, but a maker who pays for a production run months before stores pay faces the same squeeze, so try her three-number method on your own product.

Do this week

Fill in your own three numbers (days your inventory sits, days customers take to pay, days suppliers give you) and work out the cash cycle for your best seller.