If you are looking to 2021 as a rebuilding year for your small business, you are not alone. The rebuilding process may bring its own challenges as you strain your cash flow to manage your small business growth. Here are 7 areas of your small business you need to watch as you are managing your small business growth.
7 Ways to Manage Your Small Business Growth Challenges:
- Manage Cash Flow
- Assess Processes
- Learn to Delegate
- Know When to Add Staff
- Watch Out for Regulations
- Monitor Your Performances
- Know When to Say No
Managing Cash Flow During Small Business Growth
The number one cause of business failure is inadequate cash flow. Similarly, the number one barrier for small business growth is cash flow. It is the lifeblood of your small business, and it will be strained during growth periods. More sales, larger volume, and more staff means more payment obligations. Larger customers likely have lengthy payment terms. Do you have enough cash in the bank to cover your overheads? Can you pay your staff on time? A lack of physical cash will stop a small business dead in its tracks. Keep an eye on your receivables and be sure to bring in money faster than you are paying out money.
Assess Your Business Processes During Growth Periods
You should be well-versed in how your business operates. Understanding your business goes beyond understanding your market and customers. It comes down to knowing your sales cycle, operations, financial status, and inventory at any given time. Not only should you understand the guts of your business, but your team should, too. Don’t let your sales team promise prices outside your ability. Don’t let your operations team run ragged from not having enough time or manpower to carryout your orders. Map out your processes and ensure the whole team understands them. This will oil your machine and let you run lean and mean into your growth.
Learn to Delegate to Manage Your Small Business Growth
You will have responsibilities in every area of the business when you are the person in charge. To put it simply, there are some tasks you should not take on yourself. Your time is likely stretched thin, and a crucial component of managing your small business growth is managing your time. Focus your work on the areas you need to, then delegate the rest. Having a strong team to support your small business growth is essential for delegating these tasks. If you bring on the right people, you should be able to trust them to carry out important aspects of the businesses without micromanaging or overextending yourself. It takes a drive to become a small business owner, and it is hard to pump the brakes when you are passionate. Just remember that you cannot do everything yourself, and some outside help can push your business to that next level.
Know When and When Not to Add Staff
The timing of adding to your team is tricky when you are managing your small business growth. Chances are that you are working hard and may not have a lot of time in your schedule to take on new team members or provide good training. Maybe you are growing quickly and add staff to early. This could lead to problems with having the cash flow to meet payroll on time. There are many factors to watch out for when adding or not adding to your team, but you want to try your best to get it right the first time. Employee turnover is bad for everyone, so making sure you have the time set aside to find the right candidate and provide the right training is crucial to the hiring process. Waiting too late to hire may impede your ability to onboard properly.
Watch Out for Regulations
Thinking about taxes and local and federal law is probably not your priority when managing your small business growth. When you have to field sales and new products and new staff, these regulations can easily fall to the side. However, the penalties for not complying to regulations can be steep. That is why it is important to make sure your business is up to snuff with local and federal regulations within your industry. Keep up with those mundane tasks like taxes, renewing licenses, and staying current with any industry specific regulations. It can be difficult when you have your business to stay on top of, but it will save you a headache and a fortune in the future.
Monitor Your Business Performances During Growth
You should have some basic key performance indicators that will tell you a summary of your business. Monitor those KPIs to ensure your small business growth is managing well and on track. Are you selling at the right prices? Are all product lines performing well? Be prepared to adapt your strategy at any time and take corrective action if the number are not making sense. If your growth is due to underpricing your products, your business model could be unsustainable when scaled. You know your business, and these numbers will simply remind you where you need to lean in and where you may need to move away from.
Know When to Say No
You can’t please everyone all the time. If your customers’ demands are unreasonable, then you can tell them you cannot do it. You do not want to be in a situation where you over promise and under deliver. It’s important to stay reliable in your guarantees, and part of that process is understanding when you cannot overextend yourself. Saying no does not only happen with customer requests that are too lofty for your means. It also is necessary when you have customer payment history that is unacceptable. You do not want to be in a position where you complete the sale and then your customer cannot pay you.
Do You Need Help Managing Your Small Business Growth?
Invoice factoring services are small business financing tools that improve your cash flow and free up your ability to grow. Eagle Business Credit is a factoring company that enables small business growth. If you need more cash flow to manage your growing business expenses, take a look at selling your invoices to a factoring company. It is fast, easy to qualify for, and will not cost an arm and a leg.
Flexible and Growing Business Funding Options
In addition to improving your cash flow reliably while you grow, invoice factoring is flexible and grows with your business. The more your sales grow, the more your factoring facility grows. There is no need to reapply for more financing. It also can serve as a receivables management tool.
Outsourcing Your Receivables Management to Free Up Time to Focus on Your Small Business Growth
Our factoring services at Eagle Business Credit come with back office management and full transparency to the state of your receivables. You can monitor your accounts aging, customer payment history, and credit availability all on one screen. Further, we will notify you of potential new clients’ credit history. You want to be sure you are doing business with customers that will pay you. If there are any red flags, we will promptly reach out and let you know. All these services come completely free with your factoring services.