Speculate to accumulate is so often said when discussing the expansion of your business that it has almost become a cliche. As is often the case with cliches, the phrase itself is rarely expanded upon. So what are you expected to speculate with and how can you tell if the time is right to be looking forward and expanding?
There are many indicators for businesses that are looking towards expansion and growth. First of all, the economy will play a significant role in any decision you make. If the market is rough and customer sales are down, this is a red flag for you to avoid any further expenditure. However, if your sales are positive and the economic state of firstly your industry but also the climate of your country are leaving you with a sense of optimism, then it is time to start looking at your books.
We all want our business to reach its full potential. For some of us that will be opening up a few chains and for others it will be a global shipping strategy, but the one thing that will link all of our ambitions and how we achieve them is how we monitor our free cash flow. Before looking into where to open your new store or what country to explore next, you need to make sure your business is healthy, and that is where FCF comes in.
Different from net cash flow, FCF is looking at how much difference there is between your cash flow and capital expenditure. It is here that you will find that all important money that you can use to grow your company while ensuring you don’t expand beyond your means.
You may be reading this and realizing that you have the capital available to move your business to the next level but are wary of making significant changes to your current set up. Well, don’t be. As discussed here, companies that don’t look to the future – and embrace it – will get left behind and eventually fail. Expanding your business doesn’t have to mean making it bigger and bolder, it can mean moving into new areas to make it more efficient. Home businesses, for example, may struggle to organize growth but following tried and tested methods just with a modern day twist can alleviate a lot of that pressure.
Digital marketing is one area of business that can be used for as big or small an expenditure as you would like and ensuring that it is done right isn’t necessarily linked to budget. Assuming you’re now looking at ways to expand your business, what can you do?
A social media audit will give you a strong indication of how your business is being represented online. Analyzing all of your data across the many networks used every day by millions of people will help to set you up with a coherent social media strategy for the future. Even now the biggest conglomerates are finding new and exciting ways of developing their social media strategy on the understanding that this is a new way of reaching your consumer base and the rules of engagement haven’t necessarily been set yet.
Staying in the digital market space, you should use this opportunity to look at how well your SEO is performing, what does a cursory search engine glance tell you about your company? There are several analytics tools available to you as well as the tried and tested Google Analytics and having assessed your cash flow you can now decide whether this is the time to redirect the manpower you have at your disposal so that you can utilize your time to get to grips with how digital expansion can help your business.
There are more traditional ways to expand your business like looking into brick and mortar stores or increasing your stock. The point of this article is not to tell you what to do but instead show you how you can do it, the most important of which is to ensure you have the cash flow to expand into new areas, build upon what you already have and achieve the dreams that you have for your business no matter how big or small they may be.
So, now is the time for you to pick through your accounts with a fine tooth-comb and analyze just how you can take your successful business and make it better.
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