Growing a business is no easy task, as the economy has taken a slight downturn in recent months. The world of business is becoming increasingly competitive, and it may be all that a business can do to stay financially solvent much less expand. There are some secrets that can help any business to grow, but financial discipline is one of the main things that will contribute to healthy growth in any business. Those looking to grow their business should consider some of the following tips to determine if they can improve in any of the areas highlighted below:
Ensure that the money for the company is housed at a bank that prefers companies similar to yours as clients, and establish a good rapport with the commercial banker in charge of handling your business. Community banks owned by locals will usually be the best choice for your money, as they are smaller and thus more geared to providing preferential treatment for top customers.
Ensure that your team is being led or assisted by someone who has a documented background in accounting and finance. If you donΓÇÖt have anyone on your executive team who has this experience, hire a consultant that can provide professional counsel on how to handle money more effectively in order to accommodate growth.
Draw up a rolling six month projection for cash flow, and consult the projection daily as you handle the cash flow of your company. Make sure that the cash flow is as close to your projection as possible, otherwise find out where the company is failing to meet the projection effectively. DonΓÇÖt go looking for outside money to grow your company, but ensure that the money that your company can use to grow is actually rolling in.
When purchasing annual services like insurance, why not consider using a monthly payment plan in order to free up cash for investment and increasing cash flow. There is no reason to have it all tied up if you need it to be able to grow.
Be as proactive as possible, and try to generate as much cash as you can from internal sources.
Practice discipline in your company, saving as much money as possible to avoid having to raise more money.
Reduce overheads in order to have more money for investing in your growth, and be as frugal possible when setting up your business.
Draw up a budget that covers your companyΓÇÖs marketing costs, overhead costs, and other costs unrelated to the actual manufacturing of your products. Once you have the budget drawn up, stick to it.
Using variable expenses will be much more effective than using fixed expenses, as you will be able to pay according to the growth of your company rather than having to pay high bills whether or not a service is used.
Consider hiring part-time labor rather than full time. Part time labor is much cheaper, as they can work extra hours without needing to be paid overtime, and you can always be certain to have staff on hand whenever needed.