The secret to becoming a big company20th June 2018
Rapid growth was the dream.
They’d just started out in business, but the founders were ambitious.
We want to reach £0.5m within a year, they declared, and hit seven figures by the end of year two.
They set their objective, gathered the troops, and got to work.
By the time this start-up came to Insight Associates, they had hit their first target, and then some.
They’d outgrown their first premises and had moved into a bigger office. Marketing activity brought more business than they could handle, but they were handling it. Recruitment drives continued and their people were happy.
But these entrepreneurs wanted to stay ahead of the game.
They knew rapid growth would bring growing pains – especially since their business would grow from ‘infant’ to ‘adolescent’ very quickly.
And they wanted to set their business up right from the start. There was no point, they understood, behaving like a small company when they wanted to be a big company in a very short time.
So when it came to their finances, they had some tough choices to make.
One option was to keep their existing bookkeeper and wait to implement a more sophisticated financial management system until it became necessary. They didn’t really need it yet.
But that’s not the route they decided to take.
We’re building a tower block, not a garden shed. We want the foundations of our business to support our plans, not just react to them.
They decided to put in place the kind of financial systems, controls and processes that a much bigger company would have right now --- because they knew that this would make growing easier for them.
Over the past few weeks, we’ve been talking about how to know when it’s the right time to upgrade your financial management.
Often this comes after years in business, when conditions are finally right.
But sometimes, the right time to professionalise your financial management comes early, when you set up, because you are extremely ambitious for your company.
You know that key business decisions can be made more easily with reliable, timely numbers at your fingertips – instead of relying on your personal insight and gut feeling. So you demand management accounts and KPIs from the start.
You know that it will be easier to plan ahead and to expand with proper cash flow forecasts – so you make sure these exist from Day 1.
You know that you will scale quicker if managing the company’s finances do not depend on you, the bookkeeper or any one individual, but on systems and processes that anyone can pick up and work with. So you make sure those are inbuilt.
All of this activity combined avoids those nightmare moments where invoices aren’t raised on time, products aren’t shipped efficiently and suppliers start leaving because they’re tired of inefficiency.
Of course, you don’t have to be a brand-new company for all this to apply.
It will help you, equally, at any point when you decide that massive growth is in order.
If you start acting like a big company today, you’ll become one far quicker. And you’ll be more resilient during that process.
Solid financial information is a key step in supporting this growth from day one.
So don’t wait until the cracks in your growing company start to show - get the foundation of your company set correctly today.
Get in touch and we can talk about which pieces to put in place first.
Let’s build that tower block, shall we?