Happy Friday - Here is the Five For Friday Post for this week:
1. Effective financial planning
Budgeting and cash flow management would be my most important consideration for business growth. Many companies have had sales and excellent products/services but could not grow effectively because they could not manage the cash. It does take a plan since it usually costs more money to grow before you begin earning it!
2. Cost Reduction Strategies
This is a form of operational efficiency. This could involve investing in technology to automate a process, or it could also be renegotiating supplier terms as the business grows and does more business with that specific supplier. There may also be unneeded expenses that were once required, but you no longer need them at this business level.
Is there more than one way to make money? This could be selling into a new market or finding new ways to sell to your current customer. Is there another revenue stream you could have? Think of the low-hanging fruit here—no need to be fancy.
Consider the idea of taking on debt for growth plans. Make sure that it will be manageable for the company afterward. Also, look at equity financing or taking on investors and what this may mean.
5. Financial Reporting & Analysis
Use Key Performance Indicators for your business (KPIs) to look at the health and performance of the company and regularly monitor financial statements. KPIs may be things as simple as daily sales and customer complaints. Think about what is essential to your business.
Bonus: Although not under the finance umbrella, I would promote having a strategy for customer relationship management, strategic marketing and branding, and operational efficiency and scalability to be just if not more important in growth than those items mentioned above.