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Do you want to enjoy the wonders that growth can do for your business while also ensuring you can sustain success over time? Then it’s salient to clear the misconception most business owners make of only focusing on their revenue or profit as key indicators.
Cash is king, and if your business runs out of cash, you won’t be able to continue operating, let alone invest in growth opportunities. With that in mind, you must monitor and manage your cash flow properly using a simple but powerful tool, Moolamore, so you won’t end up like the 82% of businesses that failed and closed down due to poor cash flow.
Read along to discover more about the significance and stages of growth and why forecasting your cash flow should be included in your business growth strategy. Let’s start!
The Significance of Growth For Every Business
As an SME company owner, you constantly strive to improve your bottom line—it’s your A-list objective. Hence, one of the most important ways to achieve this is through growth. Here’s why:
- Growth enables you to blow up your sales, drive your business performance, expand your product and service line, reach new audiences, expand your customer base, partner with suppliers on the most favourable terms and employ a team of professionals since, of course, most job seekers want to be a part of a prominent and renowned community.
- Growth creates opportunities for innovation. As your business expands, you can invest more resources into research and development, helping you meet emerging customer needs, stay ahead of your competitors and maintain your position in the marketplace.
- Growth will boost your business’ credibility, providing confidence for your investors and stakeholders alike. By demonstrating progress towards long-term goals, your business will be more likely to secure funding and support from external partners, which can help fuel further expansion.
The Phases / Stages of Business Growth
Each phase/stage of growth is vital for your business to understand as you strive towards success. So, let’s check out each of them below:
1) Startup or Initial Stage – This is the most crucial phase, as it sets the foundation for future success or failure. Therefore, you must consider your target market, establish your brand recognition, build your marketing strategy, obtain the necessary funding and ensure that your product value can meet your customer’s needs and expectations even on a tight budget.
2) Growth Stage – The second phase wherein you’ve already established your business and can focus on expanding your customer base and increasing profits. It involves enhancing customer service, exploring new markets, introducing new products or services, and hiring additional personnel. The process of business growth is an exciting venture that can be both challenging and rewarding.
3) Maturity Stage – Once your business has achieved stability, it enters the maturity stage, which involves consolidating resources and finding new ways to stay competitive in the marketplace, such as building worldwide recognition, geographical expansion and product diversification. Thus, despite a more or less stable growth period, maturity requires more cash flows so that you can carry out new strategies and promotions effectively.
4) Renewal/Decline stage – Renewal is a time for your business to refresh your strategies, practices and processes to maximise efficiency and even boost your market share. That said, if you don’t reevaluate and renew your plan of action (e.g. investing in new technologies and ideas), your business can decay, leading to its decline stage.
Understanding Your Numbers, Planning Better For the Future and Surviving the Tough Business Climate: The Critical Role of the Moolamore Cash Flow Forecasting App For Your Business Growth
Remember that it’s essential to look at more than just your revenue and profit to truly comprehend the full story of your business’s financial health.
Cash flow being part of the three key financial statements you should be aware of, is an incredibly valuable metric in understanding how much money is coming and going from your business and whether there are any potential issues with liquidity or payments.
It helps ensure that your business has enough funds to pay its bills, prevent insolvency, maintain operations, and make investments in future development. For these reasons, looking closely and managing your cash flow properly should also be an integral part of your growth strategy.
To elucidate further, we list down the different ways an innovative cash flow tool, Moolamore, can drive growth success into your business:
1) Better Cost Control
Creating a cash flow forecast with Moolamore makes it easier for you to see if your business is overspending. With that, you can develop an effective budgeting strategy and identify areas where you can apply cutbacks, thus increasing your profit margins.
2) Enhance Your Receivables Management
Forecasting with Moolamore will also help you improve your receivables management. For instance, if you spot that you often have cash flow problems because your customers don’t pay their invoices promptly or because you give them a long period to pay, you can optimise a better payment policy and process that will benefit both parties.
3) Prepare For Tough Times: Anticipate Cash Shortages and Seasonal Fluctuations
Another biggest advantage of the cash flow forecasting app Moolamore is that you can use it to predict potential cash shortages and seasonal fluctuations, enabling you to avoid serious financial difficulties and instead create a plan of action to help your business manage through the tough times and remain in a secure position.
4) Play Through Scenarios: Make Informed and Brilliant Business Decisions
Moolamore empowers you to generate what-if scenarios so you can evaluate the feasibility of your plans and decisions and see the impact they can have on your cash flow.
Let’s say your business is considering purchasing new equipment, employing additional staff or expanding into new premises, but what if there’s an unexpected economic turmoil or your sales suddenly drop due to competition?
These are the exact reasons why your business needs a cash flow forecasting tool like Moolamore. If you understand your cash availability and the opportunities and risks involved, you can make informed and brilliant business decisions about when and how to invest in your growth, giving you a stronger footing in the industry.
5) Obtaining Funds You Need
When you apply for financial backups, you’ll need to come prepared with your financial statements, and a cash flow forecast is part of it. If you have an accurate and good cash flow forecast, you can prove the creditworthiness of your business and have a higher chance of winning the favour of investors, creditors and lending institutions.
Thankfully, a reliable tool such as Moolamore will help you prepare for your financing requirements smoothly since, with this tool, you can easily visualise your cash flow position and build solid financial data.
Forecasting your cash flow with an expert tool, Moolamore, should be a part of your growth strategy. Doing so will help you get valuable insights into your business’s financial health, stability and direction so you can address potential financial issues before they become severe and plan smarter for your next steps in reaching growth milestones. Thanks for reading!
Give your business the visibility needed to set up for growth success well into the future. Embrace an expert forecasting and cash flow management tool, Moolamore, today! Schedule a demo here.