If you are thinking about expanding your business and you are wondering is now the right time to do it?
First, it’s important that you properly assess the current state of your company, the market conditions and the economy in general. Certainly, all the signs are pointing in the right direction. The latest Quarterly Economic Outlook from Bank of Ireland predicts that Ireland will see healthy growth in employment, an increase in GDP, sustained consumer spending and further export growth in 2017.
There are some possible and unknown storms on the horizon particularly with the changes across the Atlantic after the US Presidential election and the unknown effect in the UK of the Brexit decision. It is a bit like the lyrics from Stealers Wheel song, except changed ever so slightly ‘America to the left of me, Brexit to the right, here I am, stuck in the middle with you’. The outcome from either situation may affect this upbeat forecast but for the time being it all looks extremely positive. So let’s make hay while the sun shines.
As far as your own business is concerned, only you can answer the inevitable question, ‘is now the right time to expand?’
Let’s be honest, most start-ups go into business with a plan to grow but few achieve the objective. Expansion can cause serious growing pains and headaches: adding new employees, additional office space, manufacturing facilities, production capacity, expanding product lines, inventory, processes, procedures, additional sales, marketing support, funding, the list can be endless.
On the upside the rewards can make it all worthwhile but should be done in a phased approach only when the indicators and signs are there showing that the business is ready. Look out for positive signs before you make your move:
Your order book is continuously full with demand outstripping supply. You can now project forward 60 to 90 days in terms of demand and customers are prepared to wait for deliveries as long as you do not let them down. New prospects are coming to you based on what they have heard about your product or service. The sales pipeline is healthy even allowing for seasonal dips.
You have processes in place which are now working efficiently from ordering through to production and finances. Everything is documented even down to the final detail so if an employee leaves or goes out sick, someone else can take over and the system continues uninterrupted. Where possible software has been utilised to help systems run more efficiently including dashboards to monitor the Business Drivers and Key Performance Indicators (KPIs).
You have confidence in your team who let’s face it have up to now been selected and trained by you. You have clearly documented Roles and Responsibilities so everyone is in no doubt with what is expected of them. Review procedures are in place preferably on a quarterly basis so not only you but also the individuals know how they are performing against expectations. Managers / Supervisors have been identified and they along with their team are given the correct levels of authority and responsibility to ensure their functions perform smoothly.
The business has finally turned the corner and you are starting to see regular profit which in turn is allowing you the opportunity to invest in growth. Yearly budgets and targets are being set and monitored against actuals. Collections are running smoothly and in turn cashflow is healthy. No business can function unless invoices are being paid in a timely manner to allow suppliers and overheads be met.
To take advantage of any growth opportunities further investment maybe required which can be done through cash reserves, bank borrowings or further investment. From time to time the business will encounter cashflow difficulties due to late payments or over supply, during these periods alternative financial solutions should be investigated including Invoice Discounting.
At Celtic Invoice Discounting we specialise in helping small to mid-size businesses with cash flow solutions providing access to cash and quick decisions. To speak to one of our Financial Advisors, simply call 01 230 0866 for a confidential and non-committal conversation to see if Invoice Discounting is right for your company.