There comes a time in a businesses’ life cycle when it experiences a successful launch, which is soon followed by success and growth. Although reaching this point is incredibly exciting and has proven the viability of the business, a new set of obstacles and challenges must be met head on.
At this stage of growth, the small business owner begins to get pulled in a myriad of directions: managing an increasing level of revenue, attending to customers, dealing with the competition, and accommodating an expanding workforce, just to name a few.
As your business continues to grow and develop, so should your business objectives, priorities, and strategies. Specifically, all of these changes that will aid the expansion of your business will come at a hefty financial price.
A strategy or a well-defined plan needs to be in place in order to thwart any financial calamity that could lead to the end of your business.
Unless you already have multiple streams of income in place, do consider the following strategies to ensure there is plenty of cash flow to fund the expansion of your business.
Reexamine Your Vendor Relationships
Taking the time to reevaluate your vendors is a great first step to controlling costs and alleviating expenses. If you are happy with your current vendors, determine if you can negotiate a better rate due to your growth.
Also make sure that you are evaluating your vendor’s work. It’s quite common for vendors to become complacent over time, leading to a decline in the quality of their work. This could potentially cost you in terms of revenue.
Finally, depending on the industry, you could have a multitude of vendors and suppliers to choose from. It’s worth pricing them against each other to negotiate a better rate.
Optimize Your Business Expenses
Many times, simply taking a look at your operating expenses and costs of goods sold (COGS) can reveal ways to save money. A common way businesses are approaching ways to optimize expenses is by seeking technology, software, and automated solutions to take care of your manual or redundant tasks.
Are you a business owner that physically creates invoices and wastes valuable time and resources chasing down overdue payments? Look into accounting software that can automate these tasks.
Pick The Right Funding Solution
There are numerous ways to fund your expansion. Make sure that you determine the cost that it would pose for your business.
If you decide to go with a business loan, do consider the interest rate and the monthly liability attached to it. Analyze the repayment terms. This will vary greatly, depending on the funding source.
For a more conservative approach, do consider applying for a small business credit card. As a quick financing option, the small business credit card is much easier to get than a loan and it would be a great way to finance small investments.
An added bonus for these cards is that they offer perks and rewards, such as travel miles, which will cut the cost of travel expenses.
Expanding Your Small Business Should Not Be Mission Impossible
The expansion of your small business should be a celebrated milestone and not an event full of dread and doom. Adequate finances are the foundation of the sustained and successful growth of any business. Implementing the aforementioned strategies to allocate the necessary funds will control costs and secure the future of your business.