Many entrepreneurs think they have to wait until their startup is profitable before they begin thinking about growth. But this is a huge misconception. Growth should be part of your business’s overall financial strategy from day one because even if you’re losing money, there are ways you can leverage those losses and make them work for you. Assess your business finances when you’re ready to start growing to figure out your options.
Determine Which Expenses Will Need to Increase and by How Much
The first thing you’ll need to do is figure out which areas of your business you’ll have to invest money in as you grow. Do you need a new piece of machinery? Are there software programs or app development costs you’ll need to incur? Rather than just guessing at these things, ask yourself what sales goals you’d like to hit, then plan accordingly. For example, if you want to hit $100,000 in sales next year and your existing machinery won’t be able get you there, you’re going to need something that can handle the load.
Set Financially Based Goals
Next, determine what your goals are on your projected growth and then set a monetary goal for each one. If you want to hit $100,000 in sales this year but you’re fairly confident it won’t happen, figure out how much money you’ll need to set aside for the buying of new machinery or additional employees to make that happen.
Business Finance Solutions
Once you’ve figured out how much money you’ll need to either make something happen or get something you need, talk to a business finance consultant and see what kind of business finance solutions might apply to your situation. After assessing your financial situation, they will be able to tell you which financing options will work best for you.
Calculate Your Expenses
Once you know how much money you’ll need to invest, calculate your expenses for the upcoming year. This will give you an idea of how much money your business will make, which you can use to determine whether or not you’ll have enough money to buy the things you need and still reach your target amount.
Develop a Business Plan
Then, once you’ve made your decisions and the finances are starting to look better, write up a business plan and present it to your investors for feedback. This will help you determine what areas of your business need attention and will help lay the foundation for future growth.
If you’re willing to do the work and take control of your business finances before you start making serious money, it can be a great way to set yourself up for continued growth. Having a financial plan in place can also help you avoid the pitfalls of overspending on unnecessary things that could add to your bottom line at a later date.