Top Financial Challenges for Small-Medium Business
Company executives face a choice at various stages of the business growth cycle where they can continue to operate as they always have, or chart a more focused path for consistent, profitable growth.
The strategies that have made a company successful, may not be the same strategies needed for next-stage growth. As a company becomes more successful, it meets with more established competitors that are, well, more competitive. They follow a company strategy and base decisions through that lens. They’ve made mistakes and learned the hard way. So, to compete, you need a plan and you need measure your results against that plan.
Successful companies that are primed for growth need to have a hand on the financial pulse of the company in order to effectively plan for the future.
Top Financial Challenges to SMB Growth
You know you’re making money but you don’t know where precisely.
There’s more to accounting than monthly and yearly financial statements. In order to compete and grow, management needs to break down the financials into actionable information. An accountant can segment your business into measurable components and tell you where you’re making money and where you’re losing it.
ROI needs to be considered on all strategic decisions.
For many emerging companies, strategic decisions are made on sales growth with less attention to the return-on-investment. But at some point, profitability and return-on-investment need to be considered more thoroughly if a company is to grow and remain profitable.
Not paying enough attention to the downside.
Every deal and every sale contain risk but is occasionally forgotten in the process. Growing companies need to understand, weigh, and communicate risk while in the decision-making process. As the business grows, decisions will need to be made faster and more efficiently. A certified accountant can help establish a decision-making framework that considers the risk involved.
Cash flow problems.
Emerging companies need to have sufficient cash flow to finance growth. In many cases, it’s a juggling act that can be resolved by an accounting professional.
Operational inefficiencies.
Operational inefficiencies lead to high-cost, low-quality results. Certified accountants are trained to spot operational inefficiencies, measure the impact, and help devise a plan to improve efficiency.
Insufficient planning.
Whenever one sets a destination, they must then devise a map or plan to get there. Strategic planning is an important component of business growth.
Inadequate IT systems.
Emerging companies that are fast-tracking their growth strategy may need to consider upgrading their information system (IT). Every business serious about growth needs to have the right tools. Information technology is advancing by leaps and bounds and it can be confusing to explore the options and make a decision. Certified accounting professionals can help managers sort through the clutter and offer advice that fits your specific needs.
The great thing about today’s accounting jobs is that you don’t have to invest in a permanent full-time position right away. Part-time, temporary, and contract accounting professionals are also available that allow you to measure their financial benefit before hiring full-time.
Author Bio
Russell Richer has 15 years experience as a B2B copywriter. A former 17-year corporate accountant, he specializes in promoting B2B products, software, SaaS, and services related to sustainable manufacturing, industrial contracting, supply chain, environmental health & safety, and business process automation. Contact Russ @ richer-communications.com.
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