Understanding business finance for a small company can be seriously problematic if there is not much to start with. Cashflow can be very unpredictable at the best of times but when there are national upheavals, as in the recent pandemic, it is even more critical. Unforseen costs are compounded by seasonal fluctuations. Wider economic challenges also play a part such as an unhelpful budget after a change of government. Once the new party is in power, all their manifesto pledges go out of the window as they grapple with the reality of running the country. The luxury of being able to promise anything they like and never expect to get voted in to have their ideas put to the test suddenly evaporates and they need to get to grip with black holes and the lack of operational consistency of their own.
Retail businesses need to have constant cashflow for investing in new ideas and new stocks. Until they sell the previous supply, their capital is tied up so more finance must be readily available for them to capitalise on opportunities in their specialised fields. If things have been going well for a few years, expansion will often be a point discussed. Whether this is opening a new branch to add to the stable, or just launching a new marketing campaign, additional funding is always needed. Whatever the carefully planned estimates go out of the window and additional funding will be needed.