Business Development Service
You want to grow, and you are not certain the business can afford to. That question has a numerical answer, and it is worth finding before you commit.
- Bookkeeping & accounting
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- Work directly with the owner
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Growth decisions made on a hunch
Another location. A second van and a crew to run it. A bigger contract that would double the workload for six months. Owners face these decisions with a feel for how the business is going and, often, not much else. The feel is sometimes right. When it is wrong, the cost shows up as a cash squeeze a few months after the commitment, when it is hardest to undo.
This page is about the financial side of developing a business: working out what growth will cost, when the money for it has to be found, and which parts of the business are worth growing at all. Those are questions your own books can answer, if they are current and set up to answer them.
Business development is one of the services JE Ledger offers. The sections below cover the numbers worth running before a growth decision.
Know your break even before you add to it
Every business has a level of sales that covers its fixed costs, the ones that arrive whether you sell anything or not. Below that level it loses money, above it each sale contributes. Most growth moves raise fixed costs: a lease, a salary, a loan payment. That raises the break even point, and the first question about any expansion is how much extra you have to sell just to stand still.
Working it out needs two things from the books: a clean split between fixed and variable costs, and a reliable margin on what you sell. With those, the break even point is simple arithmetic, and it turns a vague sense of risk into a specific sales target you can judge.
Growth uses cash before it makes any
A business that grows usually spends first and collects later. Wages for a new hire start on day one. Materials for a bigger job are bought before it is invoiced. Customers pay in thirty or sixty days. So a profitable expansion can still drain the bank account for months, and plenty of sound businesses have come close to failing in exactly that gap.
A cash forecast month by month, built from what the books show about how quickly customers pay and when bills fall due, shows how deep the dip will be and how long it lasts. That tells you whether you can fund the growth from reserves, need a line of credit, or should phase it.
Grow the part that pays
Not every part of a business deserves to be bigger. If one line of work carries a strong margin and another barely covers its costs, growing the second one mainly produces more work. Cost figures by job, product or service show where an extra dollar of sales leaves the most behind, and that is where growth effort belongs.
This is where business development and cost accounting meet. The same coded records that tell you which jobs make money tell you which ones to chase.
Getting ready for a lender or investor
If growth needs outside money, the conversation starts with your financial statements. Lenders commonly ask for a profit and loss, a balance sheet and recent tax returns, and they read them for consistency. Statements that are late, unreconciled or impossible to tie to the bank weaken the application before anyone looks at the plan.
Closed, reconciled books and a clear forecast make the request easier to approve and easier to defend. They also make it easier for you to judge whether the loan on offer actually fits the cash forecast.
What does a business development service do on the financial side?
On the financial side, business development means testing growth plans against the business's own numbers: the break even point before and after the change, a month by month cash forecast showing how much money the growth needs and when, the margins that show which work is worth growing, and financial statements clean enough to put in front of a lender. It turns a growth idea into figures an owner can decide on. JE Ledger offers business development service. Call (305) 748-1367 to talk through the decision in front of you.
Office hours: Monday to Friday, 8:00 AM to 5:00 PM.
Business Development Service FAQs
Is this marketing or sales help?
This page covers the financial side of growing a business: break even, cash, margins and lender readiness. If you are looking for help finding customers, say so when you get in touch and Javier will tell you whether it is something he covers.
My books are behind. Can I still plan growth?
Not reliably. Plans built on stale or unreconciled figures inherit their errors. The usual first step is getting the books current, which also tends to answer some of the growth questions along the way.
How far ahead should a cash forecast look?
Far enough to cover the whole period before the growth pays for itself. For a new hire or a new location, that often means several months to a year, reviewed and updated as actual figures come in.
What would JE Ledger handle?
Bring the decision you are weighing. Javier will tell you which numbers matter for it, what your books can already show, and what he would put together.
What does it cost?
It depends on the decision and the state of the records. Call (305) 748-1367 or email [email protected] with what you are planning.
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Where to Next
Keep reading, or get in touch and tell us where the books stand.