If your business is on the up and sales are increasing it is obviously good news and promising for the future, but it can also mean that you might experience some growing pains and face some challenges that stunt your growth if you don’t make the right moves.
Planning for sustainable growth involves anticipating changes and working out the right logistical tactics such as when to move to bigger premises and when to order new equipment or take on more employees.
Here are are some insights and tips on how to finance these major growth moves and ways to get the timing of these decisions just right by ensuring all the components for success are in place.
What are you doing right?
It might seem an odd question to ask yourself but if you are going to open up suitable lines of credit for your business and plan for expansion in a controlled way you need to be able to verify your revenue streams.
Knowing exactly which areas of the business the growth is coming from and where potential new revenues streams might be created are key factors in determining your growth plans.
You need to confirm whether the current revenue streams and any future channels are sustainable in the longer term. If you are noticing a spike in sales at a certain time of the year it could indicate a seasonal demand, and you will need to account for a potential drop in sales at certain times if that is the case.
Identifying how robust and predictable your income streams are will be fundamental to getting your timing and funding plans right for future growth.
Budgets are the health monitor every business needs
You can’t expect to plan for future expansion or even sustain your current levels of trade without knowing exactly where you stand with your finances, which is why an accurate budget is so critical.
A budget will help you keep a much tighter control over your finances and show you were cuts or adjustments need to be made. They are also helpful in giving you a clear idea of your debt-to-income ratio so that you can see if it needs adjusting in any way.
Lenders will always look at this ratio as a way of evaluating your ability to service the loan payments.
Invest in people
You can have a great product that is in demand but if you don’t have the right people to help you serve those customers and manage the business efficiently, it won’t always be enough.
It’s no secret that many of the most successful businesses have invested heavily in finding, nurturing, and rewarding talented employees.
It is a real no-brainer to commit to finding the right people who will want to be with you on your journey as the business grows and your investment in their talent as well as your desire to look after them, not just financially, will often deliver rewards greater than the actual cost of these employees.
When you have verifiable and sustainable income streams, a close eye on your finances, and some talented people who feel valued to help you run your business, these are some of the key components that can help you plan for the future with greater confidence.