Managing your business finances for growth

You’ve got your great business idea, but can you access the funding you need to manage your finances as you grow?

Accessing finance is crucial for any small business, but particularly as you look to scale and grow.

Understanding which product will be the best fit for your individual business at any time can be overwhelming – plus knowing how to best manage your finances to give you the best chance of a successful application.

Here, we’ve got seven essential tips to help your business get the finance it needs to thrive and grow.

1. Plan, review, and plan again

One of the key reasons that startups fail is because they lack a sound business plan. Having a plan that sets a roadmap for your business and that clearly articulates what issue your business is trying to solve, is a very important step in creating a sound foundation.

Your plan should establish your objectives, your unique selling point, and identify the skills you have and the skills you need to meet your ambitions. The planning process itself can also help you spot any potential problems or issues.

2. Metrics matter

Once you’ve established your targets and objectives, measuring your performance and progress is essential. You simply can’t have enough data about your business. Setting Specific, Measurable, Achievable, Realistic and Timely – or SMART – measures that you can review regularly can be helpful.

There are various tools and resources to help you gather information. HSBC Kinetic* is an award-winning business banking app, which harnesses data to inform customers about potential business risks and provide solutions. It works alongside a range of proprietary software to help give you a holistic picture of business performance. That information can help identify trends, threats and opportunities and can help power growth.

3. Mind the gaps

Using your trading experience and financial metrics can help identify gaps in your cash and trade cycles that might inhibit growth. Customer payment delays or goods held up in shipment can mean your cash is tied up, for example.

Re-evaluating trade cycles and your existing terms can help you keep track of your cash, which is crucial when you’re growing. It can also help provide clarity on what changes could help you grow faster and whether you might need funding to support your plans.

When the need for funding arises, HSBC Kinetic* has a Small Business Loan** so you could access real time funding and keep up with the pace of growth.

4. Be realistic

When it comes to seeking funding for your business, it’s important to be honest and open about your needs, what you’re planning to use the money for and how you’ve calculated the sum required.

It’s where good financial records come in useful. They can show your trading history, how risk is being managed, and your own commitment – and these are areas any lender or investor will be focussed on.

5. Understand your options

For businesses starting out, obtaining debt finance can be difficult and many turn to family and friends. When it comes to financing growth, and with proof of concept and financials behind you, the options can seem bewildering.

Understanding the terms of each option and what impact they would have on your business is essential. Angel investors or VCs, for example, can offer experience and support alongside funding, but they’ll require an equity stake in return, and many business owners aren’t prepared to give that away.

Debt finance can also take many forms, particularly as your business matures. More structured solutions such as trade finance, which funds the gap between paying your suppliers and your typical point of sale, or receivables finance, which raises funds against your issued sales invoices, could help free up working capital.

6. Cashflow really is king

If you want your business to survive and thrive, having a deep understanding of your cashflow is fundamental.  Make sure you’re building in enough money that if something goes wrong – you lose a contract or your forecasts are off – you can still meet your obligations. One of the first things any financial provider will look at is how you can mitigate risk and service any debt. The HSBC Kinetic Current Account*, can help you manage your business finances with helpful cashflow forecasting to make better informed decisions.

7. Access support

Businesses don’t operate in isolation and your network can help you find new opportunities and new markets that can help you scale up, but it can also help you access specialist support. Building that support both internally and externally is an important step in growing your business. It’s a huge learning curve to take your vision and learn all the things you don’t know, like IT, marketing, supply chains or finance.

You can apply for a new business account in minutes with HSBC Kinetic. So if you’re a single director shareholder limited company or a sole trader, find out more at business.hsbc.uk/kinetic

Simply download the HSBC Kinetic app and apply in minutes. Most accounts are opened in 48 hours.

*HSBC Kinetic is subject to eligibility, T&Cs, credit check and fees apply.

**You don’t have to open, have or maintain a HSBC Kinetic Current Account to open, have or maintain a HSBC Kinetic Small Business Loan.

This article was written as part of a paid-for advertising content campaign with HSBC.