Why is Working Capital Important for Entrepreneurs?
For entrepreneurs, maintaining adequate working capital is vital for several reasons:
Operational Efficiency: Adequate working capital ensures that a business can meet its daily operational expenses, such as salaries, rent, and utility bills. Growth and Expansion: Positive working capital allows a business to invest in growth opportunities, such as new products, services, or market expansion. Risk Management: Sufficient working capital helps a business cushion against unforeseen expenses or economic downturns, thereby reducing financial risk. Creditworthiness: A healthy working capital level enhances a company's credit rating, making it easier to secure loans and attract investors.