I think it’s a safe bet that everyone has heard of the Tortoise and the Hare fable, but you haven’t or if it’s been awhile since you last heard it, let’s go over it again: Tired of being made fun of for being so slow, the tortoise challenges the hare to a race. When the race starts, the hare races ahead of the tortoise and after getting a comfortable lead decides to take a rest. The tortoise passes the hare while he’s sleeping and wins the race. It teaches us the lesson that slow and steady wins the race. So what does that have to do with running a business?
Fast growing businesses are often applauded for their rapid pace, but judging success solely on how fast a business grows can be misleading. There is a big difference between growing fast and growing smart. Business, like the hare, can become complacent when they think they’re ahead of the pack. Instead of shooting for growing fast, businesses should focus on growing at a steady pace and what they can do to maintain that rate of growth.
In order to grow at a steady pace, companies should pay attention to the financial health of their company. One particular area to pay attention to is cash flow. It doesn’t matter how fast a company grows if they can’t sustain their cashflow. Having a sufficient cash flow means you have enough money on hand to pay creditors, employees, and other emergency bills that might pop up along the way. Having ample cash flow also gives you the opportunity to use the extra cash to further expand your business.
Companies should also focus on managing their inventory. Too often we see even the fastest growing companies struggle with maintaining a healthy inventory level. Steadily growing businesses rely on inventory management to stay successful. Proper inventory levels not only save on overhead costs, but also strengthen the relationship with the customer by providing flexibility and timely service.
ERP financial management software with inventory management capabilities can help you keep track of your financial information and inventory levels. Find a package that works well with your specific needs and helps you maintain a steady level of growth. Remember, growing a business is a marathon, not a sprint.