As the consultant to Home Solutions, I would like to identify some potential obstacles your company may face. Cash flow seems to be the main obstacle once a company decides to expand. Cash flow problems are not unique, in fact it is common that companies face cash flow issues as they experience growth. (Brood’s, 2009, Para.
1). One of the most important steps in gaining control of your business would be to figure out your exact costs of running your business. Conduct a cash flow analysis.
Update your financial statement with the most accurate information. Include the loaded costs you pay your employees (hourly rate, plus benefits). Check the cost of receivables, inventory, and overhead.
Settle all outstanding accounts. Once you have a clear picture of your financial standing, you can proceed with your goals. Opening other offices will be a huge undertaking so make sure you compare costs and trim your expenses wherever necessary.
Family and friends can be a source of needed funds, but keep in mind this type of borrowing can create problems. Nickels, McHugh and McHugh, 2013, p. 05) I have two possible solutions for handling cash flow issues that come along with rapid growth in business. First let’s outline the options for increasing your cash flow. Call your bank or credit union and inquire about unsecured loans, line of credit, and revolving credit. (Nickels, McHugh and McHugh, 2013, p.
507) Review your credit cards to see if you can increase your limit, cash in any bonds or liquidate investments. Stay on top of clients with outstanding balances. One of the quickest ways to get cash is to collect from unpaid clients.
Look into ways to minimize costs, .NET instead of buy, barter services. Consider selling any unnecessary inventory, goods and/or equipment. Restructure loans and credit agreements for lower interest rates. The second possible option would be to seek equity financing. Offering stock has advantages and disadvantages. The advantages of having funds available may outweigh sharing your company with new owners.
Venture Capitalists (investors who believe a company has great profit potential) can be a source of significant funds.Some advantages are: Investors do not have to be repaid, no legal obligation to pay vividness to stockholders, can improve the condition of your balance sheet. Some disadvantages are: Stockholders have the right to vote for board of directors, dividends are paid from profit after taxes and are tax deductible, needs to keep stockholders nappy. (Nickels, McHugh and McHugh, 2013, p. 528).
Consider partnering with other investors or companies. This type of stability could generate the needed revenue to expand and grow your company at a steady and efficient rate.The economic crises can impact your growth. Research lessons learned from the fall f financial markets, ask questions to business save.
“y’ people. Above all, keep good records. Your Judgment and integrity will show and build trust with consumers as you grow.