Tips For Growing a Company
Most leaders or business owners expect their companies to be successful and grow in a healthy and positive way. However, unfortunately, there are very few companies that really achieve it since this, no matter how simple it may sound, is not an easy task. There are many factors and elements that can determine the success or failure of a company; Therefore, in this article we have prepared in a very summary way some tips for the growth of a company.
These tips can help you as a leader or entrepreneur to be much more focused when running your business and at the same time, be prepared to assume growth with your collaborator.
Tips for the successful growth of a company
Take care in detail of the company's gross margin while it grows
As the first piece of advice for the healthy and successful growth of a company, we have to take careful care of the company's gross margin while it grows. Many business leaders make the mistake of constantly focusing and measuring the growth of the company, taking into account easy-to-measure aspects such as the amount and quantity of sales, and based on this information, they begin to be much more aggressive. with their pricing strategies and with the discounts and benefits they offer to their customers.
For them, the calculation becomes very simple: greater sales – greater success for the company or greater amount – greater success for the company.
But how about you take a look at the gross profit of the operation? Beyond observing the increase in a company's sales amounts, taking care and measuring the profit of the operation is a good way to know the percentage that the cost of sales represents in relation to your net income.
The reason for this is because many SMEs tend to fail because despite having positive sales numbers, their operating costs increase to the point of being unsustainable for the business.
Our recommendation so that your company can grow healthily and positively is to take care of and measure at all times the gross profit of its operation not only globally, but also by families or product lines or by client or sales channel so that you can Take care that the sales strategy used is in accordance with the projected growth margin.
Increase free cash flow
Another of the big mistakes that SME leaders make and that often leads to business failure is that they begin to grant loans to their clients as a growth strategy without prior planning and timely monitoring that allows them to have short-term liquidity.
The decrease in cash flow may be a reason to make an entrepreneur nervous, but there are other strategies that turn out to be much more efficient or technologies that help you keep all this under control. Added to that, the lack of documentation and planning regarding the company's commitments such as payments to suppliers, creditors and payroll.
To increase free cash flow and keep the company's liabilities covered, we recommend that you rely on administrative solutions with which you can integrate all the financial information of your company and, in turn, you can plan your payments online, react in a timely manner face the problems that may arise and make much more accurate decisions at a financial and administrative level.
Take care of the company's operating margin
Another piece of advice for the growth of a company that we can offer you is to continuously measure the operating profits of the company, that is, the profit obtained after controlling sales and operating and administrative expenses related to the operation.
The lack of constant monitoring of these numbers can become a black hole that, little by little, ends up consuming the company's profits.
To do this, we recommend measuring operating profit month by month through the income statement. This document will allow you to know where the company's money is going, detect excessive expenses or money leaks in order to react in time and make much better decisions for the business.
Another tip for the successful growth of a company is to establish a detailed budget of your expenses from the beginning of the year to be able to monitor them month by month.
Increase control of new operations
It is important that as a leader you are very clear that as the business grows and develops, it is necessary to invest in the renewal of its processes and infrastructure, since otherwise, problems associated with the operation and inefficiencies that affect the quality of the service.
Make sure you increase control of new operations and have the necessary tools and personnel to control the business and be more effective.
Constant evaluation of the Company's Objectives and Results
Another piece of advice for the growth of a healthy and successful company that we can give you at Corponet is the constant evaluation of the company's objectives and results.
Remember that what is not measured is not controlled. Therefore, it is necessary to constantly measure and evaluate the results of the company's operation and ensure that employees meet their short, medium and long-term objectives.
To measure the results of your company, you need to have reliable information in real time. ERP systems can help you know in detail what is happening in your company through reports, graphs, control panels or dynamic tables that allow you to convert the data. in valuable information to grow in a healthy and successful way.
Take these tips into account for the successful growth of a company when running your business. At the same time, we invite you to rely on professionals who are capable of offering the best technologies and solutions that help you have greater control and monitoring of processes and results.
At Corponet we offer you our ERP consulting service to support you and guarantee the success of your investment. With more than 15 years of experience focused specifically on SAP Business One and growth companies, we can affirm that we are the ideal candidate to support you in this important process and help you achieve the levels of profitability that you have always sought.
We offer advice based on updated knowledge to carry out your growth and continuous improvement projects. For us, long-term relationships are one of the values that we promote to have synergy with our business partners.
Would you like to learn more about this ERP software and how it can support your company to achieve the growth you so desire? Request a Demo of SAP Business One . It is completely free and in it you will have the opportunity to observe this ERP software operating live and with business scenarios similar to those of your business. Also, a specialized consultant will help you resolve all your doubts.
