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The Economics of Business Growth Finance and Survival

Explore the factors behind the demand for growth finance in business survival, as per John Maynard Keynes' 'rising tide' model. Learn how the formula 'Performance=scale of profit ÷ by inflation + the dominant trend in cost of living' affects profitability and the choice to grow or face collapse. Gain insights from statistics on the rising cost of living and business failures to understand the urgent need for consistent growth strategies.

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The Economics of Business Growth Finance and Survival

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  1. Factors demanding growth finance • John Maynard Keynes’ ‘rising tide’ model - • Business survival depends on the formula: ‘Performance=scale of profit ÷ by inflation + the dominant trend in cost of living’.

  2. Factors demanding growth finance • As a global average, according to Dun & Bradstreet, the cost of living rises by 54 per cent every decade. • So any business has a clear choice: • grow or go bust. • You actually have to doubleyour profitability every 10 years just to stay where you are.

  3. Factors demanding growth finance • Figures from the Official Receiver’s Office in the UK show that of all the businesses that go into receivership, 38% of them collapse in years 6-9. • That’s actually more than the number • that go under in the first year.

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