While most small-business owners are looking to grow their organization, many fail to achieve the growth they aim for while others grow too quickly for their capabilities and eventually fail or revert to a more manageable size. However, with the right approach, small businesses can and should grow successfully.
The most common stumbling block for small-business owners looking for growth is that they don’t have a clear plan in place; they simply have a vague ambition to get bigger and more successful. Ambition is important and admirable. To support it, business owners need to know where their business is now so that they can decide on their growth goals and how to achieve them. Unfortunately, that key requirement of visibility is missing for many business owners.
Understanding profit and loss is important, but it’s just the start for businesses looking to grow. It’s arguably more important to understand the business’s cashflow, because this is the vital contributor to the business’s ability to grow. A business with poor cashflow is unlikely to have or be able to free up or obtain the resources necessary to fund growth-targeted activities.
Businesses need to start by deeply and thoroughly understanding their cashflow, and what affects it. This means getting a handle on who in the business is spending how much, on what items. It also means having a crystal-clear picture of where income comes from and what could affect the income stream, both positively and negatively.
Businesses that haven’t already put a strong, enforceable expense policy in place should do so without delay. As the business grows, it will become more difficult to manage spend, and unauthorized expenditure can get lost in the crowd. Putting an expense policy in place sooner rather than later, and demonstrating that it can and will be enforced, sets the tone for company expenditure and helps reduce the risk of employee fraud.
Growth often means that team members need to travel more, which can quickly add up if there’s no tight rein on expenses. It’s important to formalize spending policies so everyone knows what’s acceptable and what’s not. This avoids issues down the track when expense claims need to be denied or staff members haven’t adequately accounted for their spend.
An automated solution can help remove the burden of managing expenses from senior business leaders who need to focus on growing the business. Solutions that automate travel and expense processes can make everyone’s lives easier and help identify any spending anomalies or issues before they get out of hand. An automated invoice processing solution can reduce the average cost of processing a single invoice by more than 80 per cent.
It’s important that staff members spend time on revenue-generating activities rather than administrative tasks. Automated solutions that make it easy to control company expenditure can help remove that admin burden. Importantly, by analyzing the activities that generate revenue versus those that don’t, businesses can identify where to focus their resources for growth. This can help avoid issues where companies grow too quickly, becoming a victim of their own success.
