“If you’re not growing, you’re dying.” Often bandied about the personal development world, this phrase encapsulates the attitude you need to take toward your company. If your business is not growing – preferably by double digits each year – you need to be on high alert that it’s on a downhill slide.
Revenue Benchmarks to Monitor Business Health
Monitoring annual revenue is one powerful way you can keep tabs on your business’s health. You want to do more than monitor how much money is in the bank. You want to track revenue growth year to year. Your annual revenue is the scorecard of how much impact your product or service is having on the world.
- Revenue increases of 35 percent or more are considered rapid growth.
- Revenue increases of less than 35 percent are considered moderate growth.
- Revenue that is stagnant – or worse yet, shrinking – is a warning sign that your business is in trouble.
Dealing with the Coronavirus Fallout
If you’re like countless business owners, your business has been impacted by the coronavirus pandemic.
Some companies have seen a surge of demand for their products and services. They’re experiencing rapid growth and may be dealing with growing pains and questions about how to scale quickly.
Other companies have held steady. Perhaps they’ve seen a shift in what products and services the market wants, or perhaps they’ve capitalized on opportunities to dive into new markets. Regardless, their revenue is stable.
Still other companies are struggling. They’re cut back expenses to the bare minimum and may be wondering if they’ll be able to survive the fallout.
Regardless of where your business falls on the spectrum, one truth remains: You are a business owner, and your goal is to grow your company. Continual growth and profitability is our ultimate mission as CEOs.
The global crisis doesn’t change this goal. It simply changes the hand that you’ve been dealt. Your path to stability, growth and scaling needs to be customized based on where you’re starting and the challenges you must overcome.
4 Key Steps to Guide Your Business Growth
No matter where you’re starting, your business growth plan should follow these 4 key steps:
Step 1: Optimize Your Cash Flow
Cash flow is the lifeblood of your business. If you don’t have enough cash coming in to keep up with expenses, never mind investing in the growth of your business, your doors won’t be open long.
Many businesses are struggling with cash flow issues right now. Addressing your cash flow problems is a key step to stabilizing your business and creating a foundation for growth.
Step 2: Increase Revenue and Profits
Revenue is a key benchmark of whether your company is growing or dying. But remember that revenue isn’t the “end all, be all” of business. Profitability matters tremendously, as well.
Increasing your profits means more money to invest into:
- Growing your business
- Creating a bigger financial cushion for emergencies and downturns
- Expanding and/or better compensating your team
- Compensating yourself
Step 3: Increase Business Value
Many business owners lose sight of the fact that their companies aren’t just vehicles to generate a salary for themselves and to make an impact on the world. Your business is also one of the most valuable assets you own.
Increasing your company’s value means more money for you in the future, when you retire from or sell your business. A higher business value can also help you secure funding for growth.
Step 4: Prepare Your Business to Attract Funding
Women entrepreneurs choose to bootstrap their business growth far more often than their male counterparts. But bootstrapping takes time, which mean you’ll be missing out on opportunities to scale your business rapidly while waiting to build up a cash infusion.
There are several ways you can secure funding to grow your business. All three steps listed above will help to position you to secure funding. But there’s more to do. You also need to master your critical financial numbers and prepare the right type of financial reports to show lenders that you are a trustworthy steward of their money.
Your Next Step on the Path to Financial Success
Whether your business is struggling to survive, holding steady or experiencing rapid growth, you are likely experiencing at least one financial challenge that is hindering your efforts to grow your business.
To help you get your financial house in order and on the path to financial success, I’m leading a free masterclass, Breaking Through to Financial Success. Get full details and reserve your spot here for this live training.
