Whether you’re just starting or you’ve been running your business for years, keeping your finances in check is absolutely vital. As your business grows, it stretches past its current capabilities – monetary or otherwise – so you’ll need to be able to adapt and grow your financial plan accordingly. You’ll also likely be investing back into your business, so you’ll need to use appropriate systems, controls, and planning to keep an eye on your overall financial position. Here’s a guide to help you do this.
Start Right
Before you start thinking about growth and where to channel your resources, you need to make sure you’re starting on the right foot. Set aside a few hours and grab the financial records, then go through them in as much detail as possible so that you really understand what’s happened in your business’s financial past, what’s happening now, and what will need to happen to either sustain or create growth – and also vitally, if any cuts need to be made, where. You must have accurate and up-to-date financial information if you are going to support the growth of your, and going through it carefully like this will mean you can make rational and proportionate decisions in good times and bad. You should also regularly review and improve your accounting systems as you expand, like those you started with will likely be unable to cope after significant growth. Once you reach your first big financial milestone, you should look at potentially hiring a finance director who’ll be able to use accurate financial figures to help you make key decisions in the business and continue your growth. This is perhaps the biggest hiring decision you’ll ever make, though; so don’t rush into it on a whim.
Plan Ahead
Once you’ve got to grips with the current financial situation, you need to start thinking about the future. Having a properly thought out, a detailed financial plan will set clear targets, and focus your efforts and vitally your resources to ensure you’re on the right track to reach them. To make an effective financial plan you need to consider what’s likely to happen next in the lifespan of your business – crucially will your sales volume and gross profits cover the increased costs of your business growth? Don’t think that you can just make a plan and leave it though; you need to regularly re-assess your targets to make sure they’re achievable. It’s also vital that you make sure you’re aware of any upcoming changes to the law that will affect your business, for example, if you run a retail business check out this guide from Card Cutters Limited about the upcoming reduction to credit card interchange rates. They also provide a huge range of solutions to suit the needs of your business.
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