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7 Finance Tips For Expanding Your Small Business from Mountain Ridge Associates

There are going to be many activities that you will need to be engaged in when you run a small business and one vital aspect of your business will be keeping a close eye on and managing your finances.

Identifying ways to grow your business and bringing in new business should be one an area of focus at all times and the status of your business finances will play a role when it comes to your long term goals for growth and success.

7 Finance Tips For Expanding Your Small Business

Business Finance Tips from Mountain Ridge Associates

Assess Any Debt

The cost of credit can be crippling for new businesses and if you are wanting to grow your business you may find yourself unable to reach your goals due to interest and debt repayments. It is essential to always consider the true cost of credit and avoid expensive credit.

If you do have business debt start looking at a plan to get rid of your debt as soon as possible and to reduce the interest you need to pay. Consolidating your debt may be an option which can reduce your monthly repayments as well as lower the interest that you are paying.

Make paying off your debt a priority since growing your business while your business is in the red is not going to be an easy task. You will need available finances to implement strategies for business growth.

Keep Expenses To A Minimum and Plan Ahead

Keeping your fixed expenses as low as possible is essential for startups and when you are wanting to grow your business. Any savings that you can make can make on your expenses is money that you can put towards your business growth goals instead.

Plan Ahead

Creating a budget and planning ahead is going to not only help you to assess your cash flow, it will also show you where you will be able to cut any expenses and where you are falling short with your planning when you look back on your projections and compare them with your actual expenses.

Here are some important items to add to your budget:

  • rental
  • salaries
  • taxes
  • interest
  • utilities
  • materials for products and services
  • insurance

Stay Organized

Very often small businesses lack the organizational structure that large businesses are able to easily afford. Make sure that your day to day financial activities are recorded accurately and that simple clear reports are available for regular assessment.

This will provide your company with a quick overview at any time of the financial health of your business which can contribute to your growth plans.

Lease Instead of Buying Says Mountain Ridge Associates

One way to avoid big expenses is to lease business equipment or property instead of buying which will keep your expenses low and give you an opportunity to invest in other areas of your business that will increase productivity to help you expand your business.

Business Growth Strategy

Keep Track Of Expenses and Money Movements

Knowing where you are spending your money and where your income is coming from is essential in business. Proper record keeping is important for your business for your own financial reporting as well as a legal requirement.

Keeping track of your finances will assist you with assessing how your business is faring and help you to clearly see where you need to control your finances and identify which areas of your business are doing well.

These records will also assist you to prepare your budgets and projections.

Negotiate Before Confirming Contracts With Vendors

Make sure to ask your suppliers for better payment terms such as an extra 30 days to make payment, or early settlement discounts. Make sure to agree on purchase terms such as late penalties and any grace periods for deal negotiations.

It is important to have everything agreed upon and clear before you sign any contracts with your vendors.

You should know what you want to achieve from negotiations with vendors as this will give you a better chance of successfully achieving your goals.

Negotiating the best terms from your vendors can save your company a lot of money which can help you to achieve your business growth goals.

Watch Your Competition

Keeping tabs on your competition is essential when you are planning on growing your business. This will assist you to identify industry demands, any limitations in the market and help you to create your niche.

You will be able to better understand the financial needs of your business to grow and expand in order to keep up with and overtake your competitors.

Following your competitors will spark innovation and help you to assess your financial needs for growth. You will need to know what capital you will need initially and the projected revenue that will be generated to consider your options.

Business Team

The Right Team Is Key advises Mountain Ridge Associates

No matter the size of your business your employees, or the people you outsource work to, must be trusted and valued. You will need talented people to help you to achieve the growth goals of your business.

A team that feels valued will be much more willing to work hard at implementing your company’s growth strategy and more invested in it’s success.

Competitive benefits and compensation that is fair and in line with your market will encourage loyalty and commitment to the growth and success of your business.

Define Your Growth Strategy

When you know exactly where you stand with regards to resources and finances you will be able to devise and define a growth strategy for your company.

Defining how you want to grow your business is an essential step in your growth strategy. You will need to ask yourself the following questions:

  • Do you want to diversify into new products or markets?
  • Do you want to expand a product line that already exists?
  • Do you want to increase your marketing in an existing customer base or do you want to reach a new market with the same product line?

The next step is to assess the risk and benefits associated with each growth goal that you are trying to achieve. Do you have the available resources for the strategy and how can you achieve success through investing in it?

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Lynne Huysamen

Mommy to a pigeon pair, blogger and online marketer. Lover of chocolate, good books and buckets of coffee.

10 Comments

  1. I have learnt a whole new thing this day and I must commend your effort towards trying to render help to some of us just starting our business. But I’ll love to know if it’s possible to lease out a blog for sometime? We all know some blogs pull a lot of traffic, is it possible to lease it out for some time? Thanks

    • Hi Salim 

      That is an interesting question and I am not sure of the answer to be honest. I don’t think any person would be willing to lease out a high traffic blog to anyone else. I certainly wouldn’t give anyone free reign on any of my websites. I do however offer contributor accounts on some of my websites with very limited access. Contributor’s cannot access anything other than adding blog posts but they cannot publish them, they can only submit them for approval and I do a final check of the content and links before publishing them. 

  2. Thanks for this article, this is an insightful write up, many people don’t know that, the longer it takes to pay a debt the more is the interest paid. I’ve learnt a lot from this article, I’ll make use of those points. For point number 3, l’m guilty of it, because I’ve bought so many things that can be leased for my new business, and if I had gone for lease, I’ll have more capital to create a standard marketing strategy. 

  3. Hi, I’m a newbie in affiliate marketing, am done with my website and I think my business is up to a certain standard. Indeed there is a lot of competition and it’s really quite difficult to handle but with this article I’ve learnt something other tips which may keep the business up and going.

  4. Wow! I find this post very educating and engaging. Small businesses often lack financing and sometimes when they acquire finances for boosting their business they end up spending the money purchasing high priced goods that doesn’t in anyway match their earnings.
    I have learnt great lessons from this post and i will sure implement them in my business. Thank you very much for this post.

  5. Hey! Thanks for sharing this wonderful article, I appreciate you taking time and breaking it all down for us. This is great. I found this article very informative and well detailed on how to expand a small business. But from my humble opinion I think expanding a small business will surely need a lot of resources. Again, thanks for sharing this article.

  6. Thanks Lynne, for these tips, many of them I have heard before reading your post, but you have explained them very clearly. I knew debts should be paid as soon as possible, you have added that a business in red is difficult to grow. The equipment one really got me. I used to think of buying, now I will be leasing. Thanks for this post Lynne. 

  7. Dear Lynne,

    You have given me plenty to think about here. This article is so thorough it opened my eyes to all sorts of information I wasn’t aware of!

    I am working from home on my online business and I am looking for advice on finance management and found your post very helpful. Currently reading “Rich Dad Poor Dad” to learn more about dealing with finance.

    I worked in a call center and our company lease the computers, property etc., I was wondering on it and thinking they have money why can’t they buy it. Lease Instead of Buying is an eye-opener for me and now I can relate it and got answer to my question.

    Since working from home I never had a track on my expenses and money movement. Now I am planning to allocate a dairy for writing all my expenses and money movement. I learned a lot of helpful information and I need to implement what I learned from your article.

    Much Success!

    Paul

    • Hi Paul 

      I think that there is a time for leasing and there is a time for buying, but certainly the upfront cost of buying equipment and property is huge. By leasing you avoid those big costs, also if you are leasing chances are good that you won’t be responsible for repairs and maintenance on those items – that should be covered by the company that you rent from! 

      I highly recommend that you track your expenses, especially since you work from home! 

  8. Good Morning Lynne,

    I read on the About Me page how you successfully overcame your addictions, that is something to be proud of.

    The tips you give in your post on expanding my business are really good. Plan ahead, well, without a plan the whole thing will soon be a disaster. To be organized is of utmost importance.I would like to add keep a small emergency budget as insurances do not cover everything and life can be full of surprises.

    A contract should be very precise to avoid disappointments and disagreements in the future. Also to have the right people in your team. I think that is really important for creative growth. Thank you for these helpful tips.

    Regards, Taetske

      

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