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.
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.
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:
- materials for products and services
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.
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.
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?