Talking Cents

Planning for growth

Planning for growth is a step that all small businesses must prepare for well in advance of the growth occurring. We have seen numerous small businesses expand rapidly only to end up scaling back to a smaller operation than they had before the growth phase. That’s how critical it is to get this process right and to plan for growth as methodically as possible. Here’s just a few key areas to focus on when planning for growth. I’m sure there’s many more but at least this will get you thinking about planning for growth.

Funding growth – Often a growing business can actually drain cash flow in the short term as the need for more physical assets, more stock and more staff creates a number of initial lump sum cash outflows. Ensure you budget for these and have sufficient cash on hand and/or access to finance.

Staffing growth – Few businesses are able to generate more revenue without adding more staff. Knowing exactly when to add that new staff member can be a key driver to success. Too late and you can miss out on potential new clients, too soon and you drain cash flow far too quickly.

Product growth – Adding new product lines is a great way to create business growth, especially of your new products are supplementary or complimentary to your existing products. Stocking and marketing new products creates short term cash requirements. Research the sales potential of new products to get your stock levels spot on. There is no greater grain on cash flow than unsold stock just sitting on a shelf going nowhere.

For more information on how you can successfully grow your small business with as little pain as possible why not contact us, mas accountants, the original accountants for small business.