7 financial tips for growing businesses

As your business grows, its financial needs may evolve too. While your business may have more revenue, it could also be dealing with increased expenses. Growth can also introduce new complexities, such as managing cash-flow gaps, financing large purchase orders, or adjusting your budget to increase cash reserves.

Planning ahead and making the right moves now can help shape the way your business grows and reaches your goals. Here are seven smart financial tips for growing businesses:

1. Look for efficiencies. The demands on your time will grow as your business does. As you find yourself pulled in multiple directions — managing operations, serving customers, and planning — time will be the most valuable resource you and your team have. Monitoring transactions and buying patterns lets you provide better service to loyal customers. And technology from Wells Fargo Business Merchant Services can help, giving you a fully connected platform that delivers real-time sales reporting. E-commerce businesses can also link their Merchant Services platform to marketing platforms that help save time by automating email and social media outreach. Wells Fargo Business tools such as digital dashboards, financial management software, and automated payment options like Bill Pay also help you gather important information and put automation to work for your business.
2. Keep an eye on cash flow. As your business scales, expenses may increase before revenue catches up, creating a strain on cash flow. The money coming in and going out of your business can be an important gauge of its health, providing the liquidity the business needs to fund operations, invest in inventory, and seize new opportunities. Review current cash flow and create a cash flow projection to fully understand what money you’ll receive and how that money will be used for expenses. If you’ll have changes in cash flow, talk to a Wells Fargo Business banker about your goals, as well as having the right deposit and checking accounts, digital budgeting, and dashboard tools your business needs. Look for ways to speed up payments to facilitate cash flow. For example, Zelle®¹ may help you get paid faster. In addition, Wells Fargo Business Merchant Services enables your business to accept various payment forms. If you have a Wells Fargo Business deposit account, you can receive funding as soon as the next business day.
3. Mind your business’s money. Many of the same good financial basics that apply to personal finance are also useful in creating strong business financials. Create a business budget and look for the best ways to manage spending, including identifying unnecessary expenses. This can be particularly important during your company’s slow season or an economic downturn. Wells Fargo Business Merchant Services offer a range of management and growth tools, including dispute management, accounting sync, and self-ordering devices that can facilitate sales, reduce errors, and improve customer service. In addition, a separate business emergency savings account can help your business build its cash reserves —three to six months of expenses is recommended. Set aside these funds in a separate account so you’re not tempted to spend them.

4. Diversify your funding options. Growth also requires planning for the future to keep your business on track. Could a line of credit help smooth cash flow? Could a business credit card help you front expenses for a big new client (while earning rewards)? Or could a loan allow you to invest in a new piece of equipment for your manufacturing business? Work with a Wells Fargo Business banker to help you explore your business’s funding options before you need them. A banker can help you understand your options for getting timely access to capital.
5. Invest strategically for growth. Inefficiencies, bottlenecks, or other challenges are common in growing businesses, but overcoming them can make the business stronger. Ask yourself: Where are processes slowing or getting “stuck”? Also look for areas where growth may be possible, such as adding more space or expanding into new territories or products. Then explore the right investments in people, technology, equipment, or other areas that will allow your business to thrive. For example, Wells Fargo Business Merchant Services can help your business engage customers by enabling reward programs or promotions or even scheduling appointments for you and your team. Does your tech startup need more space? Or does your commercial kitchen need new equipment? Talk to a Wells Fargo Business banker about the best ways to invest strategically in your business.
6. Build your A team. You undoubtedly will have questions about how to grow your business. Having a team of trusted knowledgeable professionals on call can help you along the way.
   A Wells Fargo Business banker, an accountant, and other professionals can help you chart the course for business growth. Communicate regularly with them as aspects of your business change, and use their wisdom to guide growth.
7. Seek new growth opportunities. Creating a strategic marketing and sales plan can help you identify new customers and markets — and ways to reach them — while potentially identifying operational improvements. Consider allocating time and budget to activities that build awareness and drive sales, such as digital advertising, social media campaigns, or email marketing. Wells Fargo Business Merchant Services offerings can integrate with third-party marketing tools that can help you automate and manage promotions and loyalty programs. If your business has a sales team, you might invest in training and tools that help them close deals faster and maintain strong customer relationships. You can also use market and customer data to find new revenue sources. For example, a medical practice may choose to add a second location to serve more customers. An IT service company may consider adopting a subscription payment model to improve profit margins and spur recurring sales.

Smart money moves can help make your business stronger as it grows. Contact a Wells Fargo Business banker to help you find the right Wells Fargo products and solutions for your growing business.