Growth is exciting.
A new employee. A bigger contract. Another location. More clients. A new program. Finally saying yes to an opportunity you’ve been thinking about for months.
But before you jump in, I have one very bookkeeper-ish question for you:
What do the numbers say?
I love seeing businesses grow. But I especially love seeing them grow in a way they can actually support.
More revenue is great. More clients are great. A busier calendar can certainly feel like growth. But none of those things automatically mean the business is becoming more profitable.
That’s why it’s worth looking a little deeper.
Start With Profitability, Not Just Revenue
One of the easiest numbers to celebrate is revenue.
If you made more this year than last year, that’s good news.
But how much did it cost you to make that money?
Maybe revenue increased by 20%, but payroll, contractors, software, rent, marketing, and other expenses increased right along with it.
You can have a very busy business without having a very profitable one.
This doesn’t mean you shouldn’t spend money to grow. Sometimes investing in people, equipment, marketing, or technology is exactly what a business needs.
You just want to understand what that investment is doing for you.
Look at Your Cash Flow
Profit and cash aren’t exactly the same thing.
That’s especially important for businesses and organizations that receive income through contracts, grants, retainers, reimbursements, or client payments that don’t arrive on the same schedule every month.
You may have money coming—but when is it coming?
Meanwhile, payroll, rent, software, insurance, contractors, and other expenses aren’t particularly interested in waiting.
Before making a big growth decision, look at what’s actually moving in and out of the business and what you expect over the next few months.
That gives you a much more realistic picture of what you can comfortably take on.
What Will Growth Actually Cost?
Let’s say you’re thinking about hiring.
The cost isn’t simply the person’s hourly rate or salary.
There may be payroll taxes, benefits, software, equipment, training, insurance, administrative time, and other expenses that come with adding someone to your team.
The same idea applies to opening another location, launching a program, purchasing equipment, or adding a new service.
Ask:
What will this really cost us?
And then:
What does this need to produce to make sense for the business?
Those are much better questions than simply, “Can we afford it?”
Look for Trends, Not Just One Good Month
One really good month feels fantastic.
Celebrate it!
Just don’t build an entire growth plan around it yet.
Look at several months together. Are sales consistently increasing? Are expenses stable? Is cash flow improving? Is the business becoming more profitable?
Trends tell you much more than one snapshot.
This is one reason I encourage regular financial reviews. When you’re looking at your numbers every month, you don’t have to suddenly figure out an entire year’s worth of information when a big decision comes along.
You already know what’s happening.
Don’t Forget About Your Own Goals
Responsible growth doesn’t always mean getting as big as possible.
Maybe your goal is to build a larger organization.
Maybe you want to hire enough support that you can stop working evenings.
Maybe you want your nonprofit to serve more people.
Maybe you want your practice to become more profitable without adding more clients.
Maybe you want to create a business that eventually gives you more freedom.
Your numbers should support your version of success.
That’s why financial conversations shouldn’t only be about what happened last month. They should also include where you want to go.
October Is a Great Time to Look
We’re heading into the final stretch of the year, which makes this a good time to look at how the business has performed so far.
What worked?
What surprised you?
Where did you spend more than expected?
What became more profitable?
What needs attention?
And what do you want next year to look like?
You don’t need a 47-page business plan.
Start with a conversation and some good numbers.
At LadyTech Consulting, I help business owners understand what’s happening behind the numbers so they can make thoughtful decisions about what’s next.
Because growth is exciting.
Profitable, sustainable growth is even better.
Book a meeting and I can translate the numbers for your next business tactic.
