This month, we have taken a closer look at the common reasons that cause small businesses to fail. From debilitating employee theft to owners standing in the way of their own success, there are various reasons why small businesses don’t make it past the first year. With that said, there is another key issue that business owners face: growing too fast too soon. While it might seem like the best decision and your business is flourishing, doing so can be counterintuitive for success. As we explore the dangers of expanding the business too soon, ensure your operation is backed by an iron-clad Indianapolis General Liability Insurance policy.
Misunderstanding the numbers.
According to Forbes, once you get to a certain sales range, above $5 million or so, it’s very hard to keep track of your financials in your head. That’s why it’s so important for business owners to consult their accountants at more than just tax time. Accountants have tons of financial data about your business and other businesses like yours. Because of that insight, a good accountant can often very quickly point out strengths or weaknesses of your business to help you better manage your business.
Sales growth doesn’t always equate to more profit.
You can get as much capital invested to grow as you want, but that doesn’t guarantee success. In fact, this is a great reason why you should look at trends in your business rather than simply go off of the income sheet from product sales. Scaling the business takes money and strategy, so don’t just assume you’re going to make money by growing. You might not make money when you first start to grow as you will have different levels of expenses.
Hiring the wrong people.
In any business, hiring the right people is critical. From starting out as a two-person operation to expanding to a huge warehouse, you need the right people by your side. Keep in mind you want to implement the same culture and values as you did from the start. Ensure you bring on quality people to your team who share your vision and your passion.
About Walker & Associates Insurance
If you’re not sure if your insurance is sufficient, it’s smart business to have your risks evaluated by professionals you can trust. Since being founded in 1960, Walker & Associates has embraced a “service is first” philosophy. Our team is focused on ensuring that each client receives individualized guidance to preserve their assets and control their expenses. Our strong relationships with international, national, and Indiana insurance companies allow us to negotiate the best coverages, terms, and pricing for our clients. Contact us at Walker & Associates Insurance, (888) 760-7292, for all of your business and personal matters.