Business Growth Decisions You’ll Have To Make: How To Get Them Right
As a business expands and grows there will be a myriad of decisions you’ll have to make.
Each one can either support or hold back your business. Business growth is of course a good thing but you have to handle it in the right way.
Here, we’ve covered a few decisions related to growth that normal businesses might struggle with. Not all businesses have to make the same decisions as they’re growing, but here are some of the common ones.
Deciding On The Right Lease
As you grow, you might have to upgrade your premises. This could involve taking out a larger lease. The same can be said of equipment or software. It can be expensive, and you’ll look at a business lease.
The problem is in finding a good lease with a fair contract and also in properly accounting for the lease in question. You might be looking at a capital vs operating lease or trying to work out what lease term will work best for you going forward.
These behave like financed purchases, so the company can spread the acquisition cost of an asset out over time. Just like you might personally finance a purchase for yourself that isn’t returned at the end.
These behave like fixed assets in the context of operating a business, but only for a period of time as they’re returned with useful life left.
It can be hard deciding on the right lease for you because you have to think about the future and consider where you’ll be business-wise when the contract comes to an end. Also, make sure you shop around for the best contract. There can be some predatory leases out there.
When it comes to accounting, always make sure you follow the updated lease accounting guidance under ASC 842.
It is typically appropriate to recruit new employees for a business when the company is experiencing growth or expansion, and additional staff is needed to handle the increased workload.
Other factors that may indicate it is time to recruit include a high turnover rate, the need to fill a specific skill or knowledge gap, or a change in the company’s business strategy or direction.
Ultimately, the decision to recruit new employees should be based on the needs of the business and the ability of the company to support and manage the additional staff.
Remember, don’t jump the gun, and make sure you’re in the right place before thinking of recruitment.
Choosing The Right Business Bank Account
It might be that you used a personal bank account for your business up until this point and have now realized you might be better off using a business bank account.
When choosing a business bank account, it is important to consider the following factors:
- Fees: Compare fees for different accounts and choose one that best fits your business’s needs.
- Services: Look at the services offered by different banks, such as online banking, check writing, and credit card processing.
- Location: Consider the location of the bank branches and ATMs in relation to your business, and if they’re easily accessible.
- Reputation: Research the reputation of the bank, including customer service and support.
- Relationship: Some banks may require a minimum deposit or balance, or may offer discounts on services if you maintain a certain account balance.
- Business type: Some banks offer special accounts for different types of businesses, such as non-profits or startups.
- It’s also important to speak with a representative from the bank and ask any questions you may have about their services and fees.
Ultimately, choose a bank that best fits your business’s needs and one that you feel confident in their ability to support your business as it grows.