Fast Growing Business- 5 Steps

5 NEEDS FUNDING YOUR BUSINESS

SIGNS

The daily challenges of running a business means longer term strategic planning such as access to sufficient financing can be overlooked. Often it is not unitl a lack of access to capital puts the brakes on your growth does the need for capital become apparent. In most cases, these problems can be avoided by carefully planning to ensure adequate requirements are met.

Here are five common situations where fast growing businesses may need to plan for additional financing.

1 HIRING ADDITIONAL EMPLOYEES To grow the business, you will inevitably need to hire new employees.

The rst step should be to establish what you can afford to pay. these new employees.

Then, you need to determine where the added payroll will come from.

It may be possible to cut budget from other areas or to pay them out of current cash flow.

2 OPENING NEW LOCATIONS If you operate in retail, then part of your path to growth will lie in opening up new locations for your business.

This includes significant operation costs which must be incurred before the new location starts to bring in new revenue.

Financing will usually need to be in place in order to see you through this period.

3

EXPANDING INVENTORY One of the most frustrating experiences for both cusatomers and businesses is not being able to order a product that is featured in a catalogue or website because it is out of stock.

Businesses in fast growing industries often struggle to Keep adequate stock availabledue to cash constraints.

Access to capital to meet increasing inventory requirements is critical for sucess, especially for seasonal businesses.

4

EXPANDING SPACE As you take on new clients and revenue expands, your business will require more physical space.

This may include more oce space, warehousing or factory floor space.

If it is not possible to fund this out of cash ow, then you may need to obtain financing.

5

DIPS IN YOUR GROWTH

While the general progression of your business will expand, there may be troughs along the way.

You can plan or these dips by proactively obtaining adequate financing.

Having a short term financial cushion can help ensure that your business survives periods of slow growth.

The growth trajectory of a business is rarely a straight line.

Financing constraints can give your competitors a window of opportunity to capture market share. Plan not only for your immediate requirements, but also longer term strategic goals for your business.