When you joined or started your company, one of the biggest and most repeated words on your to-do list was “grow”. It was likely embedded into every metric you knew at the time. Grow your customer base, grow larger profits, add more product lines, create bigger margins, add more locations. If it sounds familiar, it is. It’s the same for all of us.
Being a small to midsize business (SMB) growth can bring on more change than you might initially anticipate. Taking on more employees, increasing your physical space or online presence probably won’t catch you off-guard but the amount of regulations, tax laws, and advice just might.
SaaS (Software-as-a-Service): Subscription-based Software Model
Let’s get more granular and look at companies that provide software-as-a-service (SaaS), the business model where software resides in the cloud and businesses or individuals license (subscribe) with you to use it on a monthly, quarterly, or annual perpetual basis until cancellation. Customers are relieved of the burden of maintaining hardware and IT staff to host the software on their premises and they can reap significant savings as a result of your handling the back-end, updates, and support responsibilities.
The SaaS business model can be a win-win for both the clients and vendors with the right software, support, and pricing. One of the virtues with SaaS is that it’s scalable. Ostensibly, it’s one product that you provide to multiple entities. Growth is necessary to recoup your expense, stay in business, and come out ahead. Other business models without a physical product, such as professional services (like accounting or consulting firms) have similar growth needs but they’re often bound by greater resource restrictions unless they optimize their productivity and automate many processes, often with the help of SaaS products.
Growth Road Bumps
When starting a business, it’s easy to stay thinking of the here and now. The knocks on the doors that need to be made and the revenue goals that need to be met just to break even with current expenses, let alone having enough funds to recoup investments. Even if you’re in that place, if you’re not already doing so, I’d challenge you to think about the long-term goal of building a scalable business.
SaaS applications are built to be scalable. The owners know, want, and expect their businesses to grow. But is growth always good?
Scaling up a family business to start adding employees from outside your circle can be jarring. You might be a killer at completing complex tax returns but managing employees may not be your forte. Hiring, firing, and keeping up morale might require you to add new skill sets. Laws and Regulations kick in too. Overtime laws need to be understood when you add that first hourly employee. FMLA (Family and Medical Leave Act) hits you at 50 employees. Other employment and labor laws that can kick in with as few as 20 employees. Are their Health Care Tax Credits you qualify for? If so, they’re no good if you or your accountant don’t know about them. (You do have an accountant at this stage, don’t you?)
Financial and physical growth as well as product expansion can be wonderful things when you’re prepared for them. Your unwavering ambition to grow your business or non-profit can encounter more than a few sticky points.
Is your plan for organic growth? Or bent on scaling up through mergers or acquisitions? Either way, you’ve got to prepare yourself for change. When you start a business today, the amount of decisions that need to made is incredulous. What comes first, the product or the business name? The logo or the website? Do you head full force into social media or take it one app at a time? Go wide or go deep?
We’ve all been taught the saying “Do it right the first time”. For the rule-followers among us, breaking that rule is tantamount to a sin. Growing a business isn’t a linear process. Your product may be spectacular but if you’re reaching the wrong audience, the results won’t be stellar. Prepare yourself for a few less-than-successful outcomes but keep your tenacity sharp, make adjustments and you’ll grow at a pace that’s right for you and your team.
Think about the primary growth goal for your business. Do you need to adjust the goal, the timeline or how you’ll reach it?
Businesses of every description rely on the Budget Maestro™ family of software solutions by Centage Corporation to improve the efficiency and effectiveness of their business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.