5 Proven Steps to Manage The Finance Of a Growing Company Here are five strategies to handle the finance and align your organization towards the roadmap of maximum profitability
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A growing company is quantified by increasing customers, resources and profits. As the company grows, there should be good business habits instituted in its workflow. And one of the crucial business habits is having an effective financial planning. Mismanaging your finances can put your company's sales, resources and strategies at risk. To align your organization towards the roadmap of maximum profitability in any line of business, this blog will guide you with key tips here are 5 proven steps to manage the finance of your growing company.
1. Have Proper Plan for Upcoming Investments
A growing company should evaluate its current scenario and forecast its future roadmap ensuring fixed costs, variable costs and expenses for contingencies. With innovative technologies being adopted by competitor business, it becomes crucial to understand whether the investment is right for your organization. In case you are looking for investors funding your business, you should formulate the best business strategy and plan with short, medium and long-term goals.
2. Speed Up Cash Flow
A business with a good financial strategy requires smarter cash flow planning to fuel bigger profits and experience sustainable growth. This involves projections, monitoring and making adjustments before you approach financial stumbles. The steps to accelerate cash flow is to check whether your business is making a profit, timely tracking progress of your company, seeking additional financing or loan to expand your business, collecting accounts receivable quickly, controlling cash outflows and take control of inventory management. Also, to focus on Smarketing tactics is the new way of looking at sales & marketing together along with financial control, with an eye on cost-per-deal while acquiring customers to improve cash flow.
Kingshuk Hazra, the founder at Leadstrategus, said that "The only reason all firms end up closing down is lack of free cash flow coupled with the lack of repeat customers". He agrees with the fact that, " A strong control on finance allows firms to outlast the competition during bad times and overcomes virtually all the roadblocks coming in the way of a successful enterprise".
3. Focus on Quality Clients
A good business plan should include a marketing strategy to reach the right audience. The product or service your business offers should have competitive pricing as they reflect quality. Quality of your product or service attracts high-end clients. And when you have quality clients who add to your revenue, it is important to provide privileges like discounts and perks at regular intervals.
Manit Bhatia, the Founder & CEO at Act It out believes, "Having the right mix of clients is the key to sustainable success." He always aims to give importance to quality over quantity when it comes to acquiring right audience for his business. "Your marketing plan should communicate the right language targeting a client base", Manit suggested.
4.Cut or Delay Expenses
Jason Quey, the founder at The Storyteller Marketer, often finds the common mistake, made by first time entrepreneurs who own growing enterprises - "They don't count the cost or figure out how they'll actually make money ahead of time." He suggested to such entrepreneurs, "You need to think about where your revenue and profit will be once the business scales." This should be an integral part of financial planning. You should establish metrics essential for your business and investigate expenses in certain categories and reduce them. Businesses should evaluate the fixed and variable costs and try to avail better deals from competitive suppliers. Another important parameter to cut expenses is investing in technology that can enhance operational efficiency.
5. Maintain a Good Rapport with Your Team
Employees are the backbone of your business who will steer your company to success. If your planning is top-notch, and execution is poor then it becomes challenging to gain holistic benefits. It is very important to implement successful human resource management practices that will boost employee satisfaction, performance, and retention. Management should foster effective communication, give constructive feedback, recognize the importance of every employee. There should be an appropriate delegation of roles and responsibilities, training, and development in a flexible workplace.
Wrapping it up, managing finances has never been an easier task for businesses. By executing the above strategies and maneuvering swiftly to your scenarios will facilitate business growth and success.