A new small business, Underwater Wildlife, has opened to sell tours of underwater sites around the country and in South America. However, money has to be paid up front by the Underwater staff to book hotels and other travel arrangements before its clients have paid for the tours. That means Underwater is facing a potential

Question

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The fact that Underwater Wildlife has to pay for travel arrangements before receiving payment from clients implies that they may face cash flow problems. They will need to have enough funds upfront to cover their expenses and must wait for clients to pay them later, which could negatively impact their ability to operate the business.

A New Small Business, Underwater Wildlife, Has Opened to Sell