How to sabotage your business growth27th June 2018
Imagine this scenario …
Your company turns over £500,000 a year and you know everything there is to know about it.
From every client to each individual employee – you’re on a first-name basis with everyone. You personally hire Annie to do the bookkeeping and you finalise every new client contract. When things get really busy, you come into the office on the weekend to balance the books.
As business steadily grows, everything still feels under your control.
Now, imagine your business gets a bit bigger and more complex.
Revenue has doubled. Then you open up a new location, hire more staff and before you know it, the company now turns over £5 million.
But you’re still running the company exactly like you did when it was 1/10 of the size.
You’re still hiring every employee. Still finalising every contract. Still balancing the books yourself, on the weekend.
It sounds ridiculous, right?
You’d be running yourself ragged. And you’d be doing your company no favours either, because you wouldn’t have the time to do the things the CEO of a £5 million company really does need to do, like take well-considered decisions about the company’s future.
In fact, pretty soon, if you continued behaving that way, your company would probably contract back down to a much smaller size.
You just can’t run a £5 million company the way you run a £0.5 million one……
…….Or even a £1 million one.
Over the past few weeks, we’ve talked a lot about how to know when the right time is to professionalise the financial management of your company.
It might be when you experience rapid growth, and your finances feel like they’re spinning out of control. It might be when your financial management is too dependent on just one or two people – an extremely unhealthy situation. Or perhaps you want to prepare the ground for growth, even if you’re not quite there yet.
The problem is that even when you spot that the time is right, it can feel like a big risk to change the way you manage your finances. Scary, even.
Implementing a new accounting system or hiring an external FD can feel like too much too soon… Even when you need it. And giving up control of your books? That feels risky too. (Even though in reality, you control nothing when you try to do all this work yourself.)
So it’s easy to delay taking any action.
But the real question you should be asking yourself is: “What if I don’t professionalise the way we handle our finances? What if we carry on managing just like we do today?”
Because the truth is: Doing nothing is risky, too.
If you don’t take the calculated risk of change now, you could head for rapid collapse.
Just like the scenario I outlined earlier.
Just look at companies like Blockbuster, Kodak and Blackberry. These companies took the risk of standing still… and you know what happened to them.
There’s a reason why a company that turns over £500,000 has different systems and processes to one that turns over £5 million.
Do you and your team currently have the financial skills and process you need to manage the kind of company you want to own a year from now?
If not, it’s time we had a conversation. Just hit ‘reply’ to reach out.
Take the fear out of risk. Together, let’s put in place the kind of financial management you need to grow smoothly, to £5 million, £10 million and beyond.