If your e-commerce business has experienced rapid growth recently, whether, through exceptional content marketing, word of mouth, or other promotional efforts, you may feel like things are finally happening.
However, as exciting as growth can be, there are several issues you need to avoid to ensure you can manage this efficiently.
Many companies have enjoyed this growth before, but growing too quickly has tripped them up because they think the money will always stay supplied. These financial issues can lead to the company closing down, so if you want to avoid that, here are eight ways to successfully handle your finances as your business grows.
Work Out How Much You Can Spend
Even if your business grows rapidly, you may still need more cash. While there are many things you feel you can now buy, you still need to take time to consider your financial situation by analyzing your costs and reevaluating your budget.
You might find that you don't have as much to spend as you thought, at least not now. While growth has given your business a chance to stand out, you must consider increased business taxes and other costs that could damage your company if you are not careful.
Outline Your Growth Plans
Once you have determined how much money you can spend, you can also take the time to outline your growth plans. This should give you an idea of where you want to be at the end of this growth but also how to grow even more in the future.
While it’s impossible to predict the future, you can still better understand what you expect from your company's growth now. At the very least, this helps you make better decisions to push your business in the right direction and minimize the risks of making mistakes that could damage your company.
Consider More Investment
While you expect more money to flood your business bank accounts, you should avoid the potential costs your business could experience sooner rather than later. Now that you have evidence that your company is profitable and has growth potential, you may want to seek more investment from venture capitalists.
Although this is only sometimes a successful idea, any investors who were previously on the fence about injecting cash into your brand may feel more comfortable. What’s more, this injection can help set you up for your next phase and help you purchase or upgrade your office or workplace essentials quicker to handle the increased demand you are expecting.
Don’t Forget Your Employees
It was not just you who helped the company achieve this growth. Instead, the entire team contributed to your business’s success, so you should reward them accordingly.
Now that you are looking forward to increased investment and more customers, you should take the time to set up ways to accurately calculate payroll for employees to ensure they are fairly compensated. Don’t hesitate to suggest raises for everyone, especially those involved in your small business since the beginning, to show appreciation for all their hard work.
And Ask If You Need to Hire More
Consider hiring more employees to meet the increased demand. While it’s tempting to stick with the same employees who helped your business get this far, there’s the risk that there will be too much demand for them to handle, at least to the best of their abilities.
Hiring more employees will give everyone more leeway and prevent burnout. However, it could impact workplace chemistry, especially if you hire many new people for your small e-commerce business. If you need to hire more people, hire a few at a time to allow them to integrate better and avoid significant financial changes so soon.
Inform Your Customers About What’s Happening
Your company’s growth will be an exciting but stressful time, so there could be several issues you may encounter during the period. Rather than wait for issues, anticipate them and let your customers know what is happening.
You can do this with maintenance messages to inform them about any planned system downtime or inform them that you are moving offices and may need help to fulfill orders as efficiently during a specific week or just a few days. While inconvenient, it is better than leaving your customers in the dark and attracting complaints that could damage your reputation.
Consider A New Office Or Warehouse
It would be best to consider moving into a new office or setting up a new warehouse to handle your needed increased stock. This can raise a few issues. Moving can be disruptive and expensive, and you may need to break your current lease, which could come with penalties.
There is no perfect solution, but you can consider interim options to prevent issues. Storing stock elsewhere without breaking a lease could be beneficial, but you must ensure it makes financial sense. Also, moving offices can wait until you have filled positions, and your team can work remotely when needed until then.
Upgrade the Essentials
With company growth comes the need to improve your workplace to ensure it can handle increased demand. As an e-commerce business, system upgrades are one of the most vital factors to remember.
You need to ensure that your website or platform can handle the increase in customers. Otherwise, risk the website crashing, which could cancel orders or make people miss out on products they were excited for. Focusing on upgrading the essentials can make it easier to manage your growth and ensure your company has the consistent cash flow to maintain its service quality during your transition.
Business growth is always exciting for small businesses, especially in the e-commerce industry. However, growth can also be unexpectedly damaging for your brand, so understanding how to manage your finances during this time is essential to ensure more growth in your future.