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The Hard Road: How to Maintain a Healthy and Growing Company

As your small business start to grow and survive, you’ll start to see that you are not entirely prepared for what is about to come. You start seeing problems that you never expected to happen to your business many years ago, and you start noticing that you are running out of funds much faster than before. This is because companies reaching theĀ five-year to eight-year mark are at risk of being closed down.

The life span of many small businesses has only a life expectancy of eight years. Once businesses reach this point, problems occur more frequently. The need to expand becomes much higher, and expenses become pretty uncontrollable. It becomes a struggle to handle, and many would choose to abandon ship by then.

This is why about 500,000 small businesses close their doors permanently every year, and about 600,000 more join the market. This is the cycle of life in the business world, and many of these business owners don’t expect that they’ll be holding on to their companies forever. Time is limited, and we all know that life is short to be spending in one particular business.

However, some expect big things out of their small business. Some business owners want a particular company to strive and join the legion of elite big companies out there in the world. The transition to such a position is not easy. There is a lot of maintenance to be had, but it is possible. If you’re planning to do this for your company, here are some tips you should follow.

Have More Non-liquid Assets

If you want your business to grow, you’ll have to make worthwhile investments. Many articles out there will tell you to have more liquid assets, but these articles usually consider the idea that you’re not planning to stay in the market for too long. That eventually, you’ll want to sell your business and start anew. However, if you want your company to grow and become a better version of itself, you’re going to make investments you can’t claim right now. You’re going to invest more into Non-Liquid assets.

Non-Liquid assets are dangerous because, unlike liquid assets that can refine how your funds move, non-liquid assets can make your funds stagnant. This is because you can’t convert these assets to cash immediately and are affected by market value. Investments like real estate, equipment, and vehicles are all non-liquid assets. It can be problematic if you have many non-liquid assets in your company, especially when the market gets hit by an economic depression. However, these assets will be key to your success and growth as a business when you’ve reached the five-year mark.

You’re going to need to invest more into non-liquid assets because you want to improve business operations. Remember that it is in business operations you get revenue and, eventually, cash-on-hand, the most prioritized liquid asset for small businesses. So these non-liquid assets will grow your company and make it the big you’ve always wanted.

Prioritizing which kind of asset you want more in your company can be confusing. But remember, if you’re planning to be around in the long run, always choose the asset that lasts longer and contributes to business operations.

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Start Building Departments

Many small businesses don’t build legal departments in their companies. This is because they can be pretty expensive. However, having legal departments can ensure that your business is ready for the transition. It will also supply all the needs you have as a big company.

Departments such as human resources, finance and accounting, and marketing are essential departments for any growing company. These departments are the backbone of your business, and they will ensure that you’re prepared for the big transition. Additionally, by having these departments, you are getting a load off your chest because they will eventually be self-sufficient. So if you don’t want to stress out too much about your company’s needs, start building departments right now.

Be Ready to Go into Debt

Here’s a fact, many big companies are in debt. But they are not bankrupt. This is because they have mastered the art of cash flow. Because of that, they are here for the long run.

If you want to become a big business, you should be prepared for the worse, and the worse is that you will be in debt for a very long time. You’re going to spend your life and money running this business, but as long as you don’t go bankrupt, you will be fine. There are many ways to master the art of cash flow, and this article can’t cover it all.

The simplest way to master it is by making sure that your liquid and non-liquid assets are in a cycle: your non-liquid assets are generating liquid assets such as cash, while your liquid assets are paying for your non-liquid assets and more. If this cycle is broken, then your company will be brought to a downward spiral. Do your best to maintain the cycle, and you’ll be fine.

Here are a few tips you should maintain your business until it grows bigger. These tips should set you up for the long run. So make sure to follow them the best way you can.

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