28 October 2025
Rapid growth can be exciting for a business. But while an increase in revenue may appear to be a sign of success, by itself it doesn’t necessary guarantee a sustainable growth trajectory.
“Scaling businesses often focus on their annual revenue only, without understanding the cash requirements that come along with it,” cautions AR & B Advisors Director, Allister Blyth. “While rapid growth may feel positive, if you can’t do it sustainably you’re destined for failure.”
The idea of scaling a business with the focus on revenue rather than liquidity is a dangerous one, creating a trap that too many unwitting business leaders have fallen right into.
Revenue versus liquidity
“It’s not surprising that we see this happen,” Allister notes. “Increasing revenue looks great on paper, and on face value makes the business appear to be doing well.”
But when a business only focuses on the profit and loss statement, then it’s only getting half of the story.
While these increasing numbers indicate that there’s money coming in, it doesn’t take the other side of things into account: the outflows, and expenses. It also doesn’t consider the stretch of time between when an invoice is raised and when the sum actually hits the bank.
Purely chasing revenue can be a trap for new businesses: growth for growth’s sake isn’t sustainable. Instead, it’s important that businesses start their scaling process with enough in their reserves to weather any timing fluctuations.
This liquidity—or the business’ capacity to cover its short-term financial obligations—is a key tool in safely managing progress.
It all starts with poor planning—or not planning at all
“You can get carried away with growth, absolutely” Allister says. “Revenue turnover might be huge, and you’re employing more people, but when a client misses a payment and you can’t pay wages this week, it all comes undone.”
It’s important to remember that debt is part and parcel of running a business, and business owners need to take into account the mounting debt that it accrues as part of its day-to-day activities.
Mapping out these debts, and actually having the necessary cash available to pay wages, super, ATO obligations, utilities, bills, and increasing overheads is vital to building a business that realises its growth dreams.
There are also the costs of a business’ raw materials themselves to factor in. If a business is having trouble making its payments it starts to put pressure on the industry. Suppliers are hesitant to supply a company that can’t pay, and without the base level materials, a business can’t operate.
“When it comes to planning, a business needs a good deal of fluidity and flexibility in how it operates,” Allister states. “While you can plan for payments, you can’t control what a debtor does, and all too often invoices are delayed.”
Timing is everything
Timing is the other big pain point that business owners face during periods of growth. Growth costs money, and requires a large cash outflow before any benefits can start to be materialise.
“Times are generally going to get tighter before they get better. It’s vital to have enough to cover these times, so it still allows you to operate as a business,” Allister cautions.
Navigating the revenue trap
The opportunity to grow can come out of left field. A business might jump on it thinking the chance could be lost if it doesn’t act now. But forging ahead too quickly, impulsively, and without the proper planning, is what generally puts debts ahead of cashflow.
Growth isn’t something that should be acted on immediately. Business owners need to pause, take a breath, and undertake the right planning first. They need confidence that another opportunity will come along—and with comprehensive forecasts in place, they’ll be ready for it, and in a better position to create more sustainable growth.
For many business owners, it’s a matter of drawing from their previous experiences. Depending on what cycle of the business they’re in, they might already have experienced some of the typical growth pain points.
Spending the time to map this out is the first step to avoiding the typical growth traps. The next step is to find a good accountant.
The right support is worth its weight in gold
“The best way to manage your cashflow and safely navigate growth is by sitting down with your accountant,” says Allister.
An accountant will help a business owner to dive into their planning. They will ask questions, helping to identify where tripping points may be, and ensure the business owner is aware of potential risks.
Their goal is to help a business understand that, yes, these challenges may occur. But in planning for them, the business is prepared to navigate them confidently.
A good accountant will ask things like:
• What reserves do you have available?
• What happens if you grow too fast—can your liquidity keep up?
• What is your process if a debtor doesn’t pay on time?
They provide robust advice, and act as a sounding board. For example, managing the temptation to overstretch too early in the business’ life.
An accountant can also provide relevant and timely reporting as the business goes through the scaling process. This way, if things waver on the liquidity front, the business can identify the issue immediately, and make changes early.
“Growth shouldn’t be chased on a whim,” says Allister. “Truly sustainable growth is built on a solid foundation, a robust plan, and the necessary liquidity to ensure all debts can be safely paid.”
While you can’t predict the future, you can put the right plans in place to be prepared, no matter what comes down the line. AR & B Advisors are here to help you grow a sustainable business. Contact us to learn more about we can help your business prepare for progress—and do it safely.