When it comes to business development and growth, many business owners focus almost entirely on the development of products and the advertising of these products. However, with growth down the line expected and being the driving force to keep entrepreneurs going, it is vitally important to prepare for the expenses that come with this growth.
As you would expect, there is the potential of moving from one tax bracket to the next, and thus having a higher withholding balance needed for these purposes, though there are a few more expenses out there in the world of business that comes with growth and we will take a look at these below.
Employee or Contractor Expenses
One of the biggest and most important expenses from a growing business is the need to delegate to those capable of completing tasks on your behalf.
With many business owners simply following the ‘I can do it all’ attitude falling into failure, it is imperative to recognise that you simply can’t do it all, and must work to ensure you can afford to outsource certain activities to others.
For this tip, we suggest that you begin to offset a small percentage of your business’s profit to build up a fund to pay for contractors when the time comes. Of course, depending on your industry this amount may need to be smaller or larger than others, though it is still vital to have such a cash reserve for urgent times a project must be completed, and you don’t possess the skill or the time to undertake it.
Cutting Back or Being Smart
One aspect of growth that is often forgotten about in the business world is essentially the importance of being wise and frugal with income streams and maximising income.
As an example, for businesses operating with a range of computer systems, or car fleets there is the option of routinely replacing these assets or making use of efficient and affordable platforms to get on top of maintenance tasks without blowing the bank. A fleet of vehicles could be effectively serviced with a local mechanic, rather than more costly sales-based maintenance service providers, for example. Added to this, offloading costly in-house workflows for affordable outsourced solutions may also be the key to cutting costs and redirecting cash flow from these, and back into the points, we outlined above.
Management Solutions – Both Digital and Employee-based
In line with the delegation of low priority tasks, there will eventually be the requirement for you to have another team member or software solution to rely on which enables your business to better function and get work done in shorter periods of time.
For many businesses, this is a project manager, either on-contract or in-house. Though there are also well-rounded project management service solutions too.
It will be important to weigh up the pros and cons as a business owner or manager and to determine which is the better option for your business’s size, though regardless of what you choose, you will have to ensure that your business has enough cash on hand to pay for a subscription-based project management solution, or a contracted employee to take care of these integral tasks.
Marketing Against Rivals
Another key expense to keep in mind when it comes to the growth of businesses is fighting off competing businesses and ensuring you have a firm place in the market.
Much like our tip above, this will be important to keep your business afloat down the line. You don’t want to have a rival business simply ‘copy’ your product or service, then out-advertise you to their customer base and effectively cut you out of the market.
And with that in mind, another fund or routine expense will need to be factored into your business operating expenses when growth is concerned.
Keeping on top of advertising and marketing is going to be integral to maintaining a top spot in both the online and physical worlds of business.
Make Use of Digital Finance Solutions
Another key preparation when it comes to dealing with growing businesses and success is ensuring you have the correct tools to handle finances with efficiency. We suggest relying heavily on all-digital solutions here which take care of the monitoring of cash inflow and outflow and give you the chance to simply watch, monitor and make changes rather than spending countless hours working out these things on your own.
With that in mind, you will have a more streamlined automated solution that is less likely to make mistakes and more able to keep you in the green should things begin to heat up from a financial standpoint.
Develop a Growth-focused Plan
Our final tip in preparing for growth-related business expenses is to formulate a plan that is specifically focused on these expenses.
As you would with a marketing or business plan, also set aside some time to develop a plan that features all of the things that are looking to crop up and cost money in the future – if your business is bigger than it is today.
Of course, you can’t predict the future here, however, you can make educated guesses and work out whether a larger customer base will require more customer service staff, for example, and integrate this added cost into your future expenses plan.