As your business grows and scales, there are blind spots that sneak up on you. Things were going well in your business; you were cruising along, enjoying the growth and profitability and then … BAM! New problems and opportunities seemingly come out of nowhere.
Each stage of business (startup, growth-stage and maturity) has unique opportunities and challenges. Just when you think you’ve figured out how to navigate one stage, the growth and scale you’ve worked so hard to achieve results in a whole new set of challenges you didn’t anticipate. Blind spots.
Here are the top five financial blind spots for growth stage businesses:
1. You’ve Reached Your Limit, and You Know There’s Got to Be a Better Way
It’s common in the growth stage to find yourself (and your team) consumed with activities that creep beyond your competency. Carrying out roles and responsibilities within your business that don’t match your skills and desires is risky. If someone else wouldn’t pay you to process payroll, keep the books, design your website or screen resumes, for example, your business probably shouldn’t be paying you to do those things either.
2. Your Gut Feeling for What’s Happening In Your Business is No Longer Accurate
Business owners often have, in their minds, an expectation of what the numbers should be. As your business grows and scales, you can no longer keep all the financial details in your head. You need accurate, relevant financial reports that provide a clear picture of how your company really makes money. Without this information, you can end up with lots of activity, even high gross revenue, but little profitability.
3. You Are Spending a Lot of Time Putting Out Fires Instead of Preventing Them
As you add more people and more activities in your business, it becomes harder to identify the underlying issues. Suddenly, it becomes challenging to tell whether you’re fixing symptoms or the underlying causes. You certainly have to deal with the acute issues in your business — but you also need a way to prevent, or more quickly detect, future issues.
4. You Have More Cash Than You’re Used to, and You Don’t Want to Waste It
As your business grows and becomes more profitable, you’ll find yourself with a new problem — excess cash. Is more money really a problem? It certainly can be. When things are going well, it’s easy for costs to creep in. It’s also easy for inefficient processes to become the status quo. The comfort of excess cash can cause you to undermine your own success.
5. You Have a Vision for Your Future, but You’re Not Sure If It Pencils Out
You have a clear vision for your business. You have focused strategies to get you there. Or, at least that’s what you hope. Without crunching the numbers, it’s hard to be confident about whether your strategies will actually get the results you’re planning on. You need financial projections to support your strategy. Otherwise, you’re relying on a strategy of hope. Though it’s a wonderful virtue, hope is not an effective strategy
One or more of these challenges likely exists in your business right now, hiding in your blind spot.