Once you have established your business and become profitable it makes sense to consider strategies for expansion . Growing a business needs to be planned and carried out methodically, otherwise you can run the risk of growing too rapidly and undoing much your previous good work.
There are ways you can control your growth as well as think about the future. Here are some tips to help you do just that.
Creating a detailed financial plan
As a startup, you will probably have devised a financial plan. This will show your projected costs as well as how you will make a profit.
When you are thinking about expansion, it’s essential to revisit this plan. You may have created a growth plan in which case take some time to review it. It could be that the plan you originally had is still useful and you can build on it.
If your plan is no longer relevant due to changes in the economy that your business had to respond to, it’s easier to start from scratch. Having a plan will keep you on track and allow you to break down your end goal into smaller, achievable steps along the way.
Optimising cash flow management
Cash flow is the lifeblood of a business, so making sure it is running smoothly and efficiently is important. Invoice management is one area where cash flow can stall. This could be from paperwork being sent out late or payments not being received. If this is an issue for your business, take a look at your policies and procedures. By making everything crystal clear, your staff should be able to work together and get the job done.
It is prudent in business to have a reserve fund of cash which can be used in emergencies. It is never too late to start so consider putting away some profits every month to boost this safety net. That way, if there is a machine that breaks down unexpectedly or an unforeseen economic crisis, your business has the financial means to weather the storm.
Investing in the right financial tools
There are many different applications and software on the market that can help your business in its expansion phase. A popular choice is accounting software. Utilising this can reduce your administrative needs and reduce the risk of errors.
Not only will you be able to pay your staff on time, comply with government record-keeping rules and track your income and outgoings, but you will also be able to create financial analytics. These reports can be used to project future growth so you can adjust your financial plan accordingly.
Enhancing financial control and accountability
Having control over the business finances allows you to monitor exactly where your income is going. Sometimes you have to delegate this responsibility and allow other members of staff to make purchases on your behalf. Rather than giving them full access to your business’s bank account, you can use business expense cards.
These cards make staff accountable for their spending, whilst you maintain overall control.
Giving your employees an element of financial responsibility to spend business funds means they will feel empowered and hopefully careful about how they make purchases for the company , particularly as they know you’ll receive detailed statements showing what has been spent and by whom.
