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The Financial Challenges of Expanding your Business and How to Handle Them

The Financial Challenges of Expanding your Business and How to Handle Them
Tuesday, April 02, 2019

If you have five employees in your business and you would like to grow that number to fifty, does that mean you will make ten times the level of profit? Or will it just make the headache of running your business ten times as bad?

Growing a business is never easy and there will be lots of new hurdles you will have to jump over to succeed – many of them financial and other managerial. In this article, Panthera explains what these financial challenges are and how you can overcome them.

Remaining competitive

Other businesses will take note of your expansion – they will be very interested in what you’re doing. If you are intending on slicing off a bigger piece of the market for yourself, then they’ll be forced to put up a fight. This means you can expect fiercer competition from your competitors which can be difficult to plan for.

Many business owners fail to plan for this because it’s hard to predict just how your competition is going to react to your expansion. The way to deal with this is by being prepared to cut your prices or to offer a higher quality service during and after your expansion. This can be taxing on your cash flow and your staff’s time so build up your financial reserves and draft in extra help when needed before you expand to make sure that you don’t get outdone by your competition.

Cash flow

When you expand, you can expect to see your cash flow become more behaviourally unpredictable. You will have new outgoings (perhaps you have leased additional premises or you have more employees to pay) and you will have to achieve a new and higher level of income for your business too.

An unpredictable cash flow can mean that if you let your outgoings run away, it could spell the end of your venture. Stabilising your cash flow should be at the top of your priorities list when you are expanding.

Monitor exactly how much is coming into and out of your business each month. You can use this information to set yourself a better budget for the future - making sure you keep some cash aside for a rainy day too, of course.

Hiring the right staff

If you are looking to expand your business to, say, a second location, you will need to hire new employees and possibly second some of your existing staff to babysit them until the new location can stand on its own two feet. When you add the costs of the premises, staff training, and their pay together, the cost can be surprisingly high.

The way to tackle this issue is by carefully selecting who will be working at your expanded premises ahead of time. Expansions take place over time anyway, so you should have a better chance of finding the right person for the job if you start your search early.

Low access to funding for growth

One significant financial risk of expanding your business that you might be forced to pay for it yourself. Sometimes, whether it is because of a poor credit score or a lack of interested investors or bank managers, this might not be the right time to secure this funding.

You can still grow and expand your business without this funding. However, all of the financial risk will be placed on you. The benefit of this is that, if your expansion is successful, you will keep all of the rewards of your efforts.

We recommend using your Panthera accountant to help you create a plan for saving up the money that an expansion requires. Accountants can also help you allocate this money in the most efficient way, meaning you can expand your business without the help of outside investors.

We can help

If you are looking to expand your business and you would like some advice on how to stabilise your cash flow and budget effectively, contact our team. Get in touch with our expert team on 01235 768 561 or email

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

Simple, efficient and most importantly, hassle-free.

We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

Pete Dungey Kaleido Grafik Limited
Anita van Eijndhoven

Talk Our Language

The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

Anita van Eijndhoven Quidne-IT
Ash & Tim Lane

Panthera brush aside the stereotype of the typical accountant

We got in touch with Panthera Accounting by way of a recommendation; we haven't looked anywhere else since. They are an extremely professional yet relaxed group of people. We were slightly daunted by the idea of accountants but Panthera brushed aside y the stereotypes. They are very understanding when answering any questions we may have. They are completely efficient, offer sound business advice, and are fantastically priced. We will continue to recommend them.

Ash & Tim Lane Starveacre Fencing
Jayne Johnson

An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

Jayne Johnson Better People
John Baker

Absolute joy - they provide a first class service on every level

Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

John Baker BKR Solutions
John Castle

Professional and Friendly

I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
Jonathan Morrison

They are always there to answer queries and sort out issues

I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
Pippa Scott

Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
Sara Southey

Panthera puts the personal back in to accountancy!

Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
Tracey Miller

Panthera are fantastic.

Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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