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The relationship between business finance and business growthGood financial management and business growth are things that many small businesses hope for and they sometimes treat them as independent variables, but they are really part of the same equation that will result in success for the business.The relationship between good business finance management and business growth is notable and here is some more information about how they are related.
The general relationship between business finance and business growth is that good management of a business' finances will eventually lead to growth if it is desired.There are some businesses that don't desire growth of any kind and having sound and solid finances will lead to success for the owner of the business and will also allow for continued business.If a business is looking for success only on small level, it will be much easier when the finances are managed properly.Most businesses are looking for growth and want some way to expand their ideas and product offering to other people or to even have a franchise system of some kind set up eventually.But some businesses get the order wrong and try to expand or make the business larger before they have a good accounting and financial system in place. This is challenging for many reasons and getting things in the wrong order can really make the process much more difficult.When you seek to expand a business but don't have the finances necessary to support the business, you risk the chance that you will lose everything you have in the business.For example, if you were to be in a credit crisis for your existing business or to have cash flow problems and then expand the business, you would certainly run the risk of having the same things happen in the new business and repeating the same mistakes over and over again, until eventually the business could no longer support itself. One instance where having things done in the right order is particularly important is when you are seeking financing for expansion.When a bank or other lender is analyzing your business for expansion or for offering funding, they care a great deal about how you are managing your finances as they are a fair indication of how you will manage things in the future.If you are having trouble dealing with your debts and paying them on time now, then a bank is going to be extremely hesitant to offer any more money to you.If you can't pay what you owe now with the way the business is managed, they have no reason to believe that expanding the business will change methods enough to result in any kind of drastic change.When you manage your finances will from the start, it will be much easier to secure additional financing when you are ready to expand the business and to take it to new heights. If you want to expand your business and offer it to other people to franchise the business, you will need to have solid and strong financials so that you are a good option for them when they are considering various franchise opportunities.You will also need to make sure that you have an accounting system that can be used across all the other business offices in a uniform way and that the methods used subscribe to the best accounting practices.No matter what situation you are currently in with your business, you can make changes that will make it run smoother and better so there will be more opportunities in the future.Take advantage of resources available to you to improve your business finances so that you'll also be able to promote the growth of your business.
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