During the start-up phase, a company needs a significant amount of cash. But companies often have to wait four months on average before seeing any income.
The financial resources a company needs to survive the start-up phase are heavily dependent on the sector. However, on average, it takes four months before the first inflows are received in the company’s bank account.
In this same time period, start-up fees, rent, salaries, inventory purchases and other various expenses have to be paid. During the start-up phase, a company should keep at least a third of its annual budgeted expenses in cash or as a credit limit so that it can pay bills and invoices on time.