Mark Osborne explains the cash-flow problem manufacturers and service firms face: they pay for inventory or expenses weeks or months before customers pay them. The gap between costs and payment can strain operations and growth.
If you're a manufacturer, you get a big order, you've gotta buy inventory and you have to hold it, and then you have to pay and you might not deliver for a while. So you're actually generally increasing your expenses, whether in manufacturing or you're in a service company, before you get paid. And there's often a gap of weeks and sometimes it's months.
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