Every business’s goal is to grow, but knowing how to achieve that isn’t always concrete.
To reassess how a company can get out of a hole or expand moving forward, they often come up with growth strategies. Conducted on their own or with an expert, mapping out their finances can help quite a bit with knowing where the business is at, as well as where it can go. And if creating a plan around the health of your company’s finances is important, then we’ve provided a few suggestions on how to get started. Check them out below:
Start with your current revenues.
Whether your business is a full-time job or side hustle, your first step almost always is going over the numbers. This will help gauge where you’re at, what’s affordable, and what you might want to cut back on as you prepare to grow. If your business has multiple streams, map out which ones have been the most successful, as well as how you can maximize them in your growth plan. Even if it takes a little bit of extra maneuvering from an accounting perspective, examining your current revenues will help quite a bit in knowing where to begin.
Learn what expenses you’ll incur.
As it goes with a lot of growing pains, you’re probably going to have to spend some money in order to make more long-term. Whether that’s purchasing new equipment or hiring more staff, the cost you’re going to incur is not only the upfront price but often the interest associated with that purchase as well. Furthermore, it’s also important to examine the long-term ROI of what you’re spending on, as well as if there’s enough runway to accomplish your goals and stay afloat if something goes bad. Although every business decision has its risks, it’s vital to look at your expenses from the perspective of reducing liability.
Prepare for a rainy day.
On a similar note to planning expenses, the same rings true for preparing for a rainy day. As it’s much easier to prepare for things to go 70% right than 100% perfect, starting thinking towards what that 30% gap of roadblocks or errors could be, as well as how to hedge your bets around it.