What steps can you take to ensure your business's finances are in order before scaling?

Scaling your business can be an exciting but challenging goal. You need to have a clear vision, a solid strategy, and a realistic budget. But before you start investing in new resources, hiring more staff, or expanding your market, you also need to make sure your business's finances are in order. Here are some steps you can take to prepare your financial foundation for growth.

1 Review your cash flow

Cash flow is the lifeblood of any business, especially when you are planning to scale. You need to know how much money is coming in and going out of your business, and how to optimize your cash cycle. Review your income statements, balance sheets, and cash flow statements regularly, and identify any gaps, inefficiencies, or opportunities. You may need to adjust your pricing, reduce your expenses, negotiate better terms with your suppliers or customers, or seek external funding sources.

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Ian Hepworth

🔷Invoice Discounting | Trade Finance | Asset Finance | Business Finance | Acquisition Funding | LinkedIn Top Voice | 22,000 Followers
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Considering cash flow is imperative. What terms will suppliers offer if you land that dream order? What other options do you have to raise working capital? Will invoice finance or trade finance be available and viable? Look at financial forecasts with and without funding. Does the funding allow you to increase profits as well as increase sales?

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Shubham Trivedi

Founder & CEO @Oyexperts & @OrbinFilings | Entrepreneur | Investor in early-stage startups | HIRING for multiple roles
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Effective management of cash flow is essential for a long time business growth. Understanding the financial health of your company can be achieved by routinely reading financial accounts. Finding and fixing errors and deficiencies can have a big effect. Monitoring data is not enough; you also need to use insights to maximize your cash cycle.

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2 Set your financial goals

Scaling your business means setting new and higher financial goals. You need to have a clear idea of what you want to achieve, how much it will cost, and how long it will take. You also need to have realistic and measurable indicators to track your progress and performance. Use tools like financial projections, budgets, and forecasts to plan your revenue, expenses, and cash flow for different scenarios. You may also need to revise your business plan and financial statements to reflect your growth strategy.

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Khaldoun Abualulla

Help business to meet statutory financial and tax reporting, lead finance team members, and cooperate with stakeholders.
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Seeking for higher financial goal should at first based on a thorough understanding of own strengths and weakness at one side and opportunities and threats of business environment at other side. Once this this established, a detailed plan will be precise, realistic, and achievable. It is then very important to be dynamic plan through the road pursuing the goals

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3 Manage your debt and equity

Scaling your business may require you to raise more capital, either from debt or equity sources. Debt financing means borrowing money from lenders, such as banks, investors, or crowdfunding platforms. Equity financing means selling shares of your business to investors, such as angel investors, venture capitalists, or family and friends. Both options have pros and cons, depending on your business stage, size, and goals. You need to weigh the costs and benefits of each option, and manage your debt and equity ratios carefully.

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Ian Hepworth

🔷Invoice Discounting | Trade Finance | Asset Finance | Business Finance | Acquisition Funding | LinkedIn Top Voice | 22,000 Followers
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Once you give away equity it is often gone forever. However, it can help you scale. Debt may be a better option and leverage can fuel growth in the good years. It is important to consider the impact in a downturn.

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4 Hire an accountant or bookkeeper

As your business grows, so does the complexity and volume of your financial transactions and records. You may need to hire a professional accountant or bookkeeper to help you with your bookkeeping, accounting, tax, and compliance tasks. An accountant or bookkeeper can save you time, money, and stress by ensuring your financial data is accurate, complete, and up to date. They can also provide you with valuable insights and advice on your financial performance and strategy.

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5 Automate your financial processes

Another way to streamline and simplify your financial management is to automate your financial processes. You can use software tools and apps to automate tasks like invoicing, billing, payroll, reporting, and analysis. Automation can help you reduce errors, save time, improve efficiency, and enhance security. You can also integrate your financial software with other systems, such as your CRM, inventory, or marketing platforms, to create a seamless and holistic view of your business.

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6 Seek professional advice

Finally, scaling your business may require you to seek professional advice from experts, such as financial advisors, consultants, mentors, or coaches. These professionals can help you with specific aspects of your financial planning and decision-making, such as funding options, valuation methods, risk assessment, or exit strategies. They can also provide you with objective and constructive feedback, guidance, and support, as you navigate the challenges and opportunities of scaling your business.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What steps can you take to ensure your business's finances are in order before scaling?

1

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3

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1 Review your cash flow

2 Set your financial goals

3 Manage your debt and equity

4 Hire an accountant or bookkeeper

5 Automate your financial processes

6 Seek professional advice

7 Here’s what else to consider

Small Business

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What steps can you take to ensure your business's finances are in order before scaling?

1

2

3

4

5

6

7

1 Review your cash flow

2 Set your financial goals

3 Manage your debt and equity

4 Hire an accountant or bookkeeper

5 Automate your financial processes

6 Seek professional advice

7 Here’s what else to consider

Small Business

Rate this article

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