5 Financial Tips for Scaling your Business
Picture this. You’ve made it! You worked hard on building your clientele, you’re getting more referrals by the day, and you’re starting to get noticed for your excellent quality of work. As the calls roll in, you’re loving the feeling of saying YES to all these new clients. But before you know it, you’ve gone from working 10 hours a week to 60. While you’re thankful for the revenue, burnout is real. Eventually, you will need to make a choice between selling your business, turning away new work, or scaling rapidly.
While rapid business growth can be scary at times, it is a huge opportunity to create a bigger and brighter future for your business. Scaling your business requires you to think hard about how you will move forward financially, but there are smart ways to scale up. Start by asking yourself if you’re ready to scale up. Have you reached your previous financial goals? Are you at full capacity or feeling like you don’t have the bandwidth to grow? If so, it’s time to start thinking about some key financial decisions and make some money moves. But first, make sure you’re on track to make this growth period successful.
Here are five financial tips to scale your business the right way:
1. Develop a strong business plan with the help of your financial statements
Whether you included plans for growth in your original business plan or you’re expanding your plan to include strategies for scaling, strategizing your next steps will help your business grow faster and stronger. As you plot your next moves, take a look at your business plan and use your financial statements - income statement, balance sheet, and cash flow statement - to ensure that your updated business plan makes sense for you financially.
2. Budget for future business expenses
Everything you will do to scale your business will come with a cost. Make sure that you assign a price for everything you will need to scale. This should include staff salaries, new software and technology expenses, contractor fees, additional taxes, inventory, and other business expenses you will incur as you grow your business.
3. Save at least 3-6 months of business expenses in advance
Managing cash flow is hard! Every year, small businesses go under just because of poor cash flow management. Using your cash flow statement, determine what scaling your business will cost on a monthly basis and have at least 3-6 months of costs saved up for a rainy day. If COVID-19 has taught us anything, it’s that saving in case of an unexpected emergency could be the difference between continuing your business dreams and hitting your goals and returning to your 9-5.
4. Know how to hire a team
Once you have your business plan and budget in place and your savings secured, you’ll need to hire a great team to help grow your business. We ALL think we can do it all, but delegating your business responsibilities will save you money in the long run. When hiring, be sure to research the market value of the skills you need and the appropriate salaries for the team members you want to hire. Then, start the process of investing in new talent to scale your business alongside you.
5. Create workflow processes for success
Once you have a team in place, it’s important to create key processes to make your business run as efficiently as possible. Using software like Loom, Asana, ClickUp, or other project management tools, set up your processes to easily translate to new team members. Creating these processes makes the transition easier for new team members and will help your business grow faster by maximizing efficiency and providing clear guidance to your team.
Now - you may be asking yourself, “Is my business ready to scale up?” We can help! When you work with Fireside Bookkeeping, we can help you create and implement smart financial strategies to grow your business faster and stronger. Want in?
or Schedule a free Discovery Call here: https://bookus.page/Fireside/judahkosky/discovery-call