What are the pitfalls for a growing business?
Ross Brymer highlights some areas that may present challenges for growing businesses.
As your business grows there are many challenges it could face; some will be unforeseeable, in which case you will need to deal with them when they happen (and pretending to be an ostrich does not count). Others, however, are foreseeable and the important thing is to try to address these before they occur.
Some of the foreseeable challenges include:
Efficient cash flow management
- are you dealing effectively with your credit control issues by promptly chasing debts?
- is your flow of work heavily reliant on one or a small handful of clients, and, if so, do you need to broaden your client base to protect against a major client going out of business?
- do you need to review your existing credit terms (are you allowing customers too long – 14 days should be sufficient in most cases)?
- if you do not employ an accountant or bookkeeper, is your current accounting system able to deal with the increasing volume of work and have you considered outsourcing?
Finding the right people
- If you need to attract high quality managers or staff but cannot afford the level of salary or bonus package that would be required, have you considered using a share scheme as a form of incentive?
- If you do not have HR, IT or finance support will you soon need help in these areas? Have you considered outsourcing?
Do you have the right business structure?
If you are operating as a sole trader or partnership, you may need to give some thought to whether you should be formalising a new business structure, such as incorporating and becoming a limited company. There is a quick guide on the ‘Startup with FSP’ section of our website that provides an overview of the available options.
If you would like to discuss your options in more detail please contact Ross Brymer.