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5 things to watch as your business grows

5 things to watch as your business grows

With greater success comes an increased number of risks that can affect the financial health of your business, as well as its public image and standing in the marketplace. Here are some common risks associated with running a growing business, along with tips on how they can be managed.
 

1. Increased staff turnover

According to an HR Institute survey, Australian companies are getting better at retaining staff. As your business grows, however, you will still have competitors trying to lure your most talented employees away with promises of higher pay and better conditions. Lack of career opportunities, poor relations with the boss and insufficient pay were cited in the survey as key reasons staff choose to leave. Good communication will help to ensure those issues are addressed early on.

2. Increased competition

As you achieve greater visibility, you will appear on the radar of competing businesses with more money and brand awareness – and more to lose if you are seen as an attractive alternative. Monitoring competitors will be a key part of their business risk management, and it should be in yours as well. Your best weapon will be your point of difference – what can you offer that they can’t?

3. Cash flow and debt issues

With a bigger business you will have bigger overheads – more employees to pay and greater spending on equipment, rent and other items. Make sure you monitor your cash flow and get an accountant if necessary. Month-by-month cash flow forecasting will help you make better decisions regarding asset purchases, staff hire and use of company credit.

4. Equipment and machinery problems

Growing your business will see you asking whether it’s better to lease or buy your equipment. When you buy, you’ll end up owning the asset and can dispose of it at any time. You will, however, be responsible for its insurance and maintenance. You will also need to take value depreciation and obsolescence into account. Will you require a loan to cover the purchase price, and how will this affect available credit?

5. Compliance with regulations and standards

As your business expands, compliance becomes more of an issue. Will you need to register for GST? Do you have rules in place governing workplace safety, harassment and bullying? If you trade goods with other countries, are you privy to current import and export regulations?

When doing a business risk assessment, try to involve all staff rather than just keeping it within senior management. This will help encourage risk awareness – and good risk management – throughout your entire business.

One of the key indicators of business growth is the launch of new products. Find out how to make the most of new product development.

As your business grows, your insurance plan should grow with it. Speak to your local expert Resilium Adviser today to make sure you’re covered.

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