When running a business, you have your immediate focuses and then your future planning. Sometimes it can be easy to get caught up in the here and now and focus too much on a micro rather than a macro level. Bringing in business is important and manufacturing/providing a service is, but it is also important to plan longer term to enable your business to scale up effectively and with the most efficiency. We’re going to look at a few of the best ways to forward plan.
Forecasts & Projections
It is essential to have an overall plan for your business, where do you ideally want to be in a years time and where do you want to be in five years and ten years time. At a more basic level you can simply work out your current rate of growth including turnover, profit and expenditure and then apply it at the same rate going forward but in all likelihood as you grow your costs will change, you will need bigger offices, more management, you will have higher wages overall so your current profit margin is likely to change but overall you should still make more money. Another important area to take into consideration is cashflow, this can often be one of the biggest problems for growing businesses – when do you get paid by your customers and when do your outgoings need to be paid to your suppliers? Work out detailed projections and then try and stick to them.
Insurance is essential, it covers your in case of accidents in the workplace, negligence by employees and in case of theft or fire. There are numerous different kinds of business insurance available but the essential ones are employee liability insurance, business interruption insurance, public liability insurance and business life insurance. When getting insurance using a broker can save you a lot of money, they will scour all of the insurance companies available and put together a custom quote that has all of the things you need. If for example life insurance is more important to you then go for a specialist life insurance broker.
Negotiate With Suppliers
As you start to grow and scale up you should be able to negotiate better deals with suppliers. In general, the more you order, the better the rate you should get. This applies to both service and product-based businesses. Suppliers prefer to manufacture in bulk, it lowers the cost for them and in turn should lower the cost for you so don’t be afraid to re-negotiate a better deal or look elsewhere at new suppliers. We mentioned earlier than some costs can go up when you scale-up but this is one of the instances where you can get them down.
There are many parts of your business that can be automated from HR through to contracts and banking. The more automated your make your business the cheaper it gets and the more flexibility you have to change things on the go.