Crossing the Canyon

29th May 2019

Imagine that you are on the edge of a miles-deep canyon.

You are currently standing on solid ground….

And you can see firm footing in the distance, on the other side.

But to get across safely, you need to cross a narrow, rickety bridge, held together by no more than fraying ropes and duct tape. You take a first step on that bridge, gripping tightly as it sways from side to side. It’s going to be a long, nerve-racking journey.

That’s exactly how I see the journey entrepreneurs have to take, as well, to get their businesses from the startup stage to maturity.

Those two stages are your solid ground.

But in between them lies “adolescence” – those years when you are growing fast, taking on lots of new customers, and trying to build the team and assets you need to transform from a small company to an established operation.

This growth phase is exhilarating….

Business is finally booming!

But it’s also dangerous.

As I discussed in my last email, a few financial missteps and it can quickly be “game over.”

With a rapid rise in your outgoings, you can easily run out of money.

And the worst part is that most businesses don’t see it coming… until it’s too late.

You can fall into that chasm of insolvency, even if  – on paper – you are profitable and bringing on lots of new customers.

So how do you get across safely? Many businesses “wing it”, when it comes to their finances.

Your annual turnover has finally hit the millions, new customers are flocking…..

The money will take care of itself, right?

So you might feel that the way you have always handled your finances – with a bookkeeper and accountant handling things somewhere out of sight – is good enough.

But it’s not.

Fast growth needs to be carefully managed.

You need to watch your finances like a hawk.

You need to look at your cash flow every single day, so that potential issues which might cause a financial shortfall are flagged up and dealt with, well before they become a real problem.

Because you have to finance your growth – paying for all those new members of staff, expanding your marketing, possibly buying new equipment or lots more raw materials – you need to carefully plan your finances, to make it all possible.

And you need to recognise that growth can severely test all the financial processes you have in place.

You may have to add a lot more people to your payroll….

Pay a lot more suppliers….

Issue and chase up a lot more invoices….

Put aside a lot more money for taxes, and possibly deal with tax issues you have never come across before…

When these go wrong, they can cause serious problems for your cash flow and take up enormous amounts of your time.

So you have to upgrade your financial systems and processes, so that they are fit-for-purpose now that you are a bigger, more complex business.

There’s another issue, too.

As you scale, you will have lots of big decisions to make.

For example, which areas of your business should you develop? What should you drop? How should you structure your team? Which areas should you expand to?

These decisions are difficult to make well without cash flow forecasts, detailed management accounts, budgets – the kind of financial information you don’t get from an accountant or bookkeeper.

Larger businesses rely on a financial director to help them understand the financial implications of all their big business decisions, and develop a strategy which is financially solid.

And that’s what you get, too, when you work with us at Insight Associates.

I’m talking about the kind of tailored, streamlined financial management that corporates take for granted, available to you at a fraction of the cost.

So if your business is squarely in its growth phase…

…If you’re looking to hire additional staff, purchase equipment, rent office space, or otherwise increase your capacity to serve an ever-growing client or customer base…

…and you want to build a solid bridge to your next phase, where your business is fully established and well-run, without winging it...

…NOW is the time to reach out to our team.

Click here to schedule a call with me, and I’ll show you how we are the one thing you simply cannot do without.

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