Each stage of a business’s lifecycle presents challenges and risks. Whilst gearing up for growth, in particular, can be inspiring and exhilarating, the process is no exception to the rule.

The critical question to ask is whether your business is truly ready for growth in the first place – and assessing your finances will help give some clearer indicators around this.

To help you understand your business’s readiness for growth, we’ve put together a helpful financial checklist below.

Scale-up checklist: what shape are your finances in?

There are four principal steps for exploring your business’s financial readiness for growth:

1. Assess your current financial health.

Growth requires healthy financial foundations. Start by evaluating your cash position: do you have the resources to support growth, and a financial safety net to handle unexpected costs?

Consider your reserves, overdraft facilities, and other liquidity options that can give you confidence as you scale.

Profitability, too, deserves careful consideration, as this shows how efficiently the business generates income relative to expenses, and so indicates whether your business will be resilient when growth costs start to climb.

And what are your debt levels like? Will you be able to continue servicing those debts, or will funding the business’s growth mean debt might increase to unmanageable levels?

EFM offers a free online financial healthcheck here.

2. Evaluate your financial processes and systems.

As your business grows, the volume and complexity of financial transactions will naturally increase. Have you considered whether your current systems can keep up?

Without reliable, scalable accounting and reporting tools, growth can quickly outpace your systems, creating bottlenecks that slow progress. Investing in tools that grow alongside your business ensures smooth operations and keeps you on track for sustainable success.

3. Identify funding needs and opportunities.

Understanding how much capital you’ll need to scale the business is only half the story. Knowing where it’s coming from is just as critical.

Will your growth plans require investments in recruitment, marketing, or technology? Or perhaps a move to larger premises?

The right funding strategy depends on your unique goals. Whether it’s grants, loans, or equity, each option carries its own benefits and considerations. Equity funding, for example, can provide significant resources but involves sharing control of your business.

But wherever the funding’s coming from, the funders will want to see financial evidence that your business is growth-ready.

Guide: 5 funding options for innovative SMEs

4. Focus on cash flow management.

Managing cash flow during growth requires precision and foresight. With increased and unexpected costs on the horizon, forecasting and budgeting become indispensable tools.

Implement a formal and regular reporting process to track cash flow and monitor budgets – this will flag future impacts. By staying agile, and reshaping forecasts as needed, you’ll ensure that your business can adjust tactics to grow with confidence.

Read more: Managing cash flow: Tips for small businesses

Growing, ready or not?

In short, financial preparedness is the key ingredient in a successful roadmap for business growth. By carefully assessing your financial health, systems and strategy, you can confidently embrace the exciting prospect of scaling up.

At MPA, we’re here to guide and support you as you scale your business effectively.

Ready to scale your business? Contact Us for expert guidance tailored to you.