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Manage Growth to Optimize Cash Flow

 

One of the most surefire ways to tame wide fluctuations in cash flow is to master the idea of consistent, measured growth. Evaluate every growth opportunity - whether you’re renovating your manufacturing facility or hiring one more employee - and make sure you’re able to project a profitable and timely return on the investment. As you complete your evaluation for growth potential, consider the following:

  • Is this growth ‘for real’ or just a ‘one-time-deal’? Make sure you know the difference. What you invest in the growth could mean the difference between company success and failure.
  • Do you have enough people? Hire people that will make sense long term. Use reputable contractors to fill short term gaps and work-flow fluctuations.
  • Do you have enough space? Be it manufacturing or warehouse space – you’ll need more of it as you grow. That said, don’t buy or lease more than you can handle in the foreseeable future. Look to shorter term leases or good bargains in the commercial real estate market before you make a commitment that might sink your business.
  • Do you have too much control? If you’re working 90 hours a week and still seem to never have enough hours in the day to accomplish your goals, it might be time to delegate to others, regardless if they’re permanent or contracted employees. If the workload is too big, customers suffer. If customers suffer, they go away. And so does the cash that came with them.