NOTHING GREAT IS CREATED SUDDENLY
Fast growth is a goal for many small business owners, and properly managed, it is a good goal to shoot for. The key words are “properly managed.” Too often the desire for fast growth means spending more than you have either cash on hand or actual income, thus increasing the cost of business to a point it is no longer sustainable.
Properly managed growth is the way to go!
Creating a balance between consuming and generating cash is one of the hardest lessons that an owner has to master. Many small businesses use “self-financed growth” as the main source of growth financing. To accomplish this, there has to exist a means of accurately predicting revenue in order to control expenditures.
At the early stages of a business’s existence, external funding sources are not often an option. Going into personal debt, for example using high interest credit cards as a funding source for a business is not advisable unless a full-proof income system is in place to pay off those loans.
An impatient business owner does not want to wait; instead the goal is instant gratification in the way of fast growth accompanied by a large amount of profit. Unfortunately, statistics show that many businesses have failed in years 2 to 5 because of excessively rapid growth without having the ability to fund it.
Fast growth can be managed. For example, prices of goods and services can be raised or costs can be reduced. In a fast growth situation, a business should also be able to speed up cash flow through increased sales without a cost increase. All these methods will help with the self-funding process.
In most cases, one forward calculated step at a time will get you to your goal faster than an unplanned sprint. It pays to have your BizQuack Vision Business Plan in place to help you gauge the right rate of growth.
As always, BizQuack is here to help you establish your growth foundation.
Tips & Advice by Nick Petra, CFP – Founder of Strategic Duck and BizQuack
Comments are closed