Deciding to take your business to the next level is an exciting time. Whether adding a new product line, introducing new staff members, or opening another store in a new area, your finances must be in order before taking this leap to ensure success.
Expanding your business requires a lot of financial investment. Sometimes, you may not have the cash readily available, leading to approaching banks or investors to raise funds.
When investing or loaning money, banks and investors will want to see previous financial reports and forecasts post-growth. Without these, it's unlikely to raise funds as they won't be able to see how investing in your business will be beneficial to them.
Growing your business usually entails taking on new members of staff. It's important to factor this into your forecasts as you'll be paying an additional salary which can be a significant cost to your business.
Ensuring you have forecasted for this means you can decide on a fair wage in return for increased sales and productivity due to your expansion. If you don't factor in additional salaries, you may lose money and have to cut other costs, which could hinder areas of the business.
If you choose to open new premises, you need to budget for all fixed costs, such as the rent and electricity. If you launch a new product line, you'll need to increase your spending on raw materials.
It's essential that you spend time planning what these costs will be to create a good profit margin and charge prices accordingly. If you don't, you may realise you aren't making enough sales to make a profit due to overpricing or underpricing your product or service.
How GMP Can Help
At GMP Accountants, we have years of experience in taking a company from one level to the next and doing so successfully.
We can take control of your financial reports to ensure they are up to date and accurate to increase your chances of raising finances. We can also work with you to forecast for the future to ensure you'll be making enough money to remain successful.
If you would like a free initial consultation on how we can help you grow your business, please don't hesitate to get in touch with us today.