Growth is more than likely going to be the ultimate goal for your small business. However, it’s often difficult to achieve at the best of times, let alone when the UK economy is facing zero growth in 2012 and the whole Eurozone is seemingly embroiled in a critical situation. However, while many firms will be battening down the hatches to try and weather the storm, there are still opportunities out there. So, can your business afford to grow?
As with any big business decision, you need to plan every detail if you’re looking to grow your business. You need to make sure the balance of outgoings and payments will work; if growth means you’ll be spending a lot up front, you need to make sure you’ll be earning this money back before your cash flow is stretched to breaking point. In order to get this balance right, you will need to make sure you’re at the right point in your business’ life cycle to achieve the desired growth. If you’re not quite there yet, it can pay to bide your time.
Expanding a business of course means making outlays when it comes to recruiting new staff or purchasing new IT systems, machinery or even moving business premises. You don’t always have to purchase up front – hire purchase and lending can both be more cash flow friendly options. This will spread payments over a number of years, so your business will be earning money at the same time as paying off the costs of growth – though, of course, you’ll be charged interest on the cost of your purchases.
Finding ways to fund business growth can be difficult, especially with banks tightening up their lending requirements in an attempt to minimise their own debt. However, with options such as invoice finance, you can free up cash flow by borrowing against the value of your customers’ debts. This means that instead of having to wait for 30, 60 or 90 days for payment, you’ll get access to the funds often within 24 hours.
If your business is looking to grow, it’s worth looking into alternative options for finance in order to give yourself the best chance possible of succeeding.