Transitioning from a Small to Medium Business: 3 Useful Tips
So, you finally made it! You have worked so hard and sacrificed so much just to upgrade your business and sales from a startup to a mid-level venture. Congratulations! You are just one of the few who never gave up and managed to show the world that hard work and determination can always do wonders. Such an achievement is worth celebrating, even for a day.
Unfortunately, the reality that your work is never done may sink in. While you have managed to bring your company to the next level, you also have to factor in many things that may affect it in the long run. The business may have upgraded, but it isn’t going to work by itself. You still need to exert effort and strategy at the end of the day.
With that being said, this phase of your venture may be unknown territory to you. If you have no knowledge of how to properly shift your business structure from small to medium, no need to worry. We have listed three helpful tips that may give you an idea of the crucial steps you’d have to do to stay afloat.
1. Consider the Wilson EOQ Formula for Your Inventory Management
If you happen to be offering products instead of services, chances are, you have a lot of inventory management to worry about. This is crucial, as not having enough of those products may result in lost sales. You also have to contend with a lack of inventory space, as too much of anything good can also be bad.
You must be able to sort out your supplies by taking the economic order quantity (EOQ) into account, and the best way to do this is by using the Wilson EOQ formula. The EOQ formula enables you to calculate the reorder point accurately and the reorder quantity of your inventory. This ensures that you will have enough supply of your products to sell to your customers.
2. Integrate Your Business in a New System
Since you are shifting to a medium-sized business, it would only be appropriate to integrate all your business processes and assets within a single, upgraded system. Not only will it make things easier for you, but your employees may access it as well, adding in their input and giving you a general idea of what the new developments in the company are.
Everything that was deemed almost unmanageable before is now made easy with software and online tools, and an expanding business must have a few of those up its sleeves; otherwise, the company itself may have a hard time keeping up with the sales figures and feedback date from the customers.
3. Acquire a Larger Space
Bigger business means a much bigger space. Whether it's your new office or inventory warehouse, you must remember to get a bigger property that will not limit your increased need for productivity and development.
Your additional employees may not feel comfortable working in a tight space, and neither would your new equipment fit in a small, rundown warehouse. Remember to plan your move out early on to avoid any hassle when transitioning from your old office space.
Switching from a small business to a much bigger one may not be easy; however, it is still very manageable, especially if you make all the right decisions along the way. Using the Wilson EOQ formula for your added inventory, integrating to a new business system, and acquiring a larger space are just some of the most efficient ways to approach your venture’s transition.
Be sure to follow them all and never hesitate to ask for help when the going gets tough. Remember, you have already made it this far. Don’t give up and continue your hard work so that you may upgrade your business again in the future, only this time; it will be a switch from medium to large-scale enterprise.
Our team at New Wave Accounting and Business Advisory have the best accountants in the Gold Coast to help your business with integration and growth. Our experienced accountants specialise in end-to-end accounting and bookkeeping services to optimise your transition. Contact us today and let us handle all your business numbers for you.