Your business is growing—that’s good news! It also means it’s time to triple-check that you’re protecting your assets and managing your finances in a flexible manner. Here’s how.
As a company grows, leaders need to ensure that they manage financial assets and equity within the company is managed well and securely. Regardless of where your business and personal finances are invested, there are several things you can do to make sure your assets are protected as you grow older.
1. Use Cap table management software
A balance sheet, or balance sheet, is a useful document for keeping track of your company’s profitability—a type of number.
Think of it as a spreadsheet that tracks the distribution of dividends among shareholders. Include your business value and future financial projections. Do this even if you don’t have a public shareholder or a sole proprietorship LLC. To properly manage assets, you need to track your assets so investors know.
The capo chart will show all of your company’s collateral, all liability and appraisal details.
As an organizational resource, it should be organized and easy to keep up-to-date as your business goes through financing. As a financial document, it can be an excellent marketing tool for new investors. This is the first document investors want to look at before deciding whether to take a chance on your business.
You can create your first hat table using a spreadsheet when your business is small. However, managing this data manually as you grow is both dangerous and tedious.
As you go through funding, your disk tables will become more and more complex, with various actions and conditions affecting the data along the way. Ultimately, you want to invest in cap table management software just as much as you want to invest in automation as your business grows.
Dedicated enterprise software, such as Astrella from Equiniti, provides intuitive data management that includes decades of compliance and security capabilities. Astrella in particular uses blockchain technology — a growing trend in finance — so that no one can access and alter data entry secretly.
This type of fraud and inaccuracy protection can help business owners sleep well at night.
2. Hire an accountant and bookkeeper
According to the founder and CEO of Inherit Learning, Nicole Walters, having two different people in the position of accountant and bookkeeper is fundamental to the business.
Bookkeepers are essential to the day-to-day operations of your business. They will reconcile your bank accounts, process payroll, maintain general ledgers, and compile financial reports for you to review.
You may have managed your own books when you started your business. But as you grow and mature, you need experts who can take some of these tasks away. They should be able to spend the time necessary to ensure that all of your accounts are in order and up to date.
An accountant can help you with tax planning and compliance (if that’s part of their scope). They are also the people who can provide a creditor check when you are looking for a loan.
They can advise you on better financial decisions. They will help you avoid tax and interest penalties, get the most out of your refund if possible, and make smart decisions about how to structure your business’s finances and manage assets. This important responsibility can affect the long-term health of your business.
Be sure to check the people you choose to fill these roles. Verbal references help, as does a good understanding of what you’re looking for. If you work with an accounting firm, find out what services they offer to help with property management. Sometimes they have a finance specialist on staff.
Find a licensed CPA who practices GAAP compliance. Interview potential accounts or companies to ensure that their ethics, professional values and priorities align with your company. Call references. Whether you’re hiring a full-time employee or an outside contractor, you want to make sure it’s a culture fit for your growing business.
3. Get credit insurance
If most of your income comes from a small pool of clients or customers, consider investing in debt, or secured, insurance.
It’s not an easy choice, but it gives peace of mind. It does this by covering a percentage of your receivables, if one of your customers goes bankrupt or goes out of business. It can also protect you if you rely on an import or export license. If you transport goods within your business, you may also need transport insurance.
To decide how much insurance to buy, you need to crunch some numbers. Decide what size loss can hurt your bottom line.
Keep in mind that having insurance against receivables can improve your creditworthiness, because your business becomes less risky for creditors. Depending on your business plan and quarterly goals, this may be part of your profitability analysis.
Do you have good quality or service as a member? If so, you may also want to hire an income recovery service to chase up recurring failed payments.
A leadership role in your company can be empowering, but it requires your best strategic brain and energy. Don’t waste your time contacting delinquent clients, get this job done and protect your prospects.
It’s all part of making sure your business is safe to save money while making money.
4. Invest in your employees
Attracting and retaining the kind of talent needed to grow your business is more difficult than ever.
Pew research shows that one in five workers are seriously considering looking for a new job in the next six months. But the quality of your talent affects the day-to-day operations of your business and how attractive your business is to investors.
With that in mind, there are a few ways to attract great employees and keep them.
- First, you can provide a health insurance plan
This may include employee stock options, employee stock purchase plans, restricted stock options, and other options. No matter how you design your fair compensation plan, it motivates employees to work hard for the success of the company. By offering more than just a salary, you can attract business-minded employees who take responsibility and bring creativity and enthusiasm to the team.
- Second, you can offer growth opportunities to your company’s employees
If your people feel like they don’t have job security, they are more likely to move. People who move to a new company may also see an increase in their salary. (Both of these statistics are reflected in Pew research.)
To combat this, consider offering professional development and opportunities for employees to grow in new roles within your company. They can increase their own value when you gain employee loyalty.
Invest in all employees, in people SY away.
- Third, you can offer benefits such as remote work.
If possible, telecommuting is a smart financial move for employees. Other benefits may include a 401k match, health club membership, comprehensive health care coverage, vacation policies, and even office lunches.
If you don’t have a formal traffic policy yet, start by writing one. When you do this, you can standardize your onboarding process and ensure the consistency of hiring. (Note: This is a good time to hire an external or internal HR professional, if you don’t already have one.)
- Finally, you can invest in recruiting to attract the right talent to your team.
Don’t have time to find someone who believes in your company’s mission? In that case, hire a contractor to spend the necessary time. You want to hire those who align with your company values, fit your culture, and have the technical and soft skills essential to be an asset to your business.
It’s worth spending a little money up front to avoid losing expensive training and HR nightmares in the next few months.
5. Check the weather
Finally, a quick gut check: Is it really a good time to grow?
It can seem silly to stop and reflect when you see obvious opportunities for growth. But it’s worth doing your due diligence.
Make sure that scaling now is the best option for your business’s longevity. If your industry is healthy, your customer base is growing and your customers want more, well, maybe now is the time.
A 2020 report from Gallup and TrueSpace, titled The Five Conditions Assessment, looks at the conditions necessary for a company to take the next step after the startup phase. Study this report and the five criteria for a growing business. It can help you navigate the sophomore years of your business.
The Five Conditions Assessment questions are a good place to start your own self-assessment.
Is your business capable of growth and development? Are you and your leadership team committed to continuous learning? Are your people — your investors and employees — on board with the growth, knowing that it will come with problems along the way?
Be honest when you answer these questions. When you do, you’ll get a clearer picture of what growth potential will look like for your company to manage its assets in the coming months and years. Then you can continue to build a financial base. Give yourself the best chance for future financial success.
By Deanna Ritchie
The Epoch Times Copyright © 2022 The views and opinions expressed are those of the author. They are for general information purposes only and should not be taken or construed as recommendations or solicitations. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other specific financial advice. The Epoch Times is not responsible for the accuracy or timeliness of the information provided.