Is It Time to Grow Your Business? Tips From a Financial Expert

There comes a time for many businesses where the opportunity of growth presents itself.  

And, while scaling the business is no doubt an exciting time for everybody involved, there are a number of things worth knowing and understating prior to starting the process.

Now, although each business is different, we often have clients come to us with the very question of what the best way to grow is.

So, today we are looking at a number of tips to consider when doing so.

Services vs Products

One of the first things every business needs to be clear on is what type of business they are.

Typically, we are looking at two types of businesses – those who sell products and those who sell services. This will help identify the underline assets or sources of revenue.

If you are a service business such as an accountant or a lawyer, it’s your people. 

The people in the company are the ones charging time so the company can make money.

On the other hand, if your businesses sells products such as lights, TV’s and so on, it’s the product that is generating the revenue.

Of course, some companies have both and that is great.

However, identifying the two groups can help the business identify its needs and plan.

Is the business properly set up for growth?

Service businesses

When it comes to a service company, the business needs to consider the workforce and the processes.

That is typically where all the time is spent so having the right procedures in place to ensure efficiency is crucial.  

As mentioned, having the right people in place is also a big factor. Investing money in their growth, development, and their work environment are all important.  

As a service business it is important to have the understanding that wages is not a cost. The opposite, it is the way the company makes money.

The key is to make the most of those wages. That goes back to having the right people and processes in place. Investing in the people will give businesses the best return.

For product companies

When it comes to businesses who are selling products, the money is in the time. The time it takes to develop and consult on the products.  

In this case, the crucial part is understanding the unique selling point and the specific market the product is built for.

The goal is to have an understanding of how much the market is worth and have a plan of how the business will get there and how long it would take.

At the end of the day, typically any business that sells products would experience the cashflow going down during building time and going up when the products are selling.

So ideally the business would have a clear understanding of how far the cash they have will carry them, otherwise they risk running out.

There are many businesses that have great ideas and visions but don’t have the resources to get them there. Businesses without a clear plan that can be backed by the required dollars would likely not make it.

If we once again compare between a business selling services and a business selling products, a service business could adjust to circumstances by reducing team members and making other cuts.

But for a product company, that is a lot harder.

To sum it up, the first step a business should take is identifying their reason of existence.

Once that is done, having a plan in place is the next step.

If you are looking to grow your company and ready to scale, we strongly advise talking to an accountant.

Having a professional to advise on best practices will have a large impact on the business.

For any questions regarding growing a business and setting up a plan to do so, contact us at Eventum Consulting and we would be honoured to help.