Growth is a goal for most companies, but if your finances aren’t rock-solid, it can quickly become overwhelming. Many companies fail not because they lack customers but because they mismanage cash flow, overextend resources, or fail to plan ahead.
This guide places finance at the heart of your growth strategy, helping you scale sustainably and strategically.
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Build a Financial Growth Roadmap
Your growth strategy should begin with a robust financial plan. Start with forecasting and build models that show where you’re going, not just where you’ve been.
Key Actions:
- Create 12, 24, and 36-month financial forecasts.
- Build best-case, expected, and worst-case scenarios.
- Include realistic assumptions for key elements such as debtor days, creditor days, customer wins and losses, etc.
- Have an endgame in mind and work towards it. What is the company being grown for? All too often, business owners have no exit strategy.
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Monitor and Understand Cash Flow
Cash flow is the most critical financial metric for growing companies. Unlike profitability, cash flow shows whether you can actually pay your bills and invest in opportunities.
Key Actions:
- Use weekly cash flow tracking tools.
- Delay expenses when possible; accelerate receivables.
- Keep a 3–6 month cash forecast on a rolling basis.
- Be aware of the impact tax payments will have, both company and personal. Understand that how and when you pay yourself will have an impact on when and how much taxes are due.
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Set Financial Key Performance Indicators That Matter
Choose KPIs that reflect your financial health and scalability. Every business has and should track different KPIs, but some examples are
- Gross margin: are you pricing your product/service correctly? What is the industry norm?
- Working capital tied up in the business, how much is needed to fund stock, WIP and debtors? This will increase as a business grows.
- Debtor days – how quickly do your customers pay you?
- Stock days – useful to monitor slowing moving stock and aid with future purchases.
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Understand the company costs
Scaling doesn’t mean taking every opportunity that arises. You need to understand the financial impact of every opportunity; some ways to assist with this are:
- Separate fixed vs variable costs. Are you aware of the difference and the impact of each?
- Renegotiate supplier contracts as you grow. Are your prices quantity driven?
- Outsource skills required to do this, such as FD/CFO services.
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Ensure the company has adequate access to funding for each stage of growth
Waiting until the cash is needed is too late. Be proactive with funding options and consider
- Credit available and how this grows with the business.
- What are the funding requirements for each stage of growth?
- Fixed asset financing and the best way of funding capital additions.
- Building a relationship with a proactive advisor who can assist with the funding required.
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Implement Robust Systems
All too often, when a company grows, its back office function is considered less important than its operations. A robust financial system is critical as a company grows. Some things to consider are
- Cloud-based accounting software that delivers what is required at each stage
- Automation of routine tasks
- Budgeting and forecasting tools
- Integrated payroll and HR platforms
- Intelligent and easy-to-use operational software
A company that grows without financial control is like a car with no brakes… exciting until it crashes. By placing finance at the centre of your growth strategy, you ensure that your company isn’t just growing bigger but growing better.
Use this guide as your checklist, and revisit your financial plan to stay ahead of both risk and opportunity.
Our digital finance team are able to assist in all aspect of this, please get in touch for more info.
