The Director’s Take: 7 Steps to Business Growth and Stability

Running a small or medium-sized enterprise (SME) is a balancing act between growth and stability, ambition and caution. Financial literacy and discipline are not just helpful; they’re essential. Here are some practical, experience-backed tips I’ve learned the hard way which have helped me out.

1. Understand the Fundamentals: Don’t Outsource Your Financial Awareness

Before you delegate financial tasks, make sure you understand them yourself. Learn the language, terms like EBITDA, accruals, and working capital shouldn’t be mysteries. The three key financial statements: Profit & Loss, Balance Sheet, and Cash Flow Statement are your business’s dashboard. If you don’t grasp the basics and how they all interact with each other, it’s harder to exert the right controls or spot red flags early.

2. Cash Flow Is King - Even Over Profit

Profit is important, but cash flow is survival. We’ve taken on lower-margin work in the past because the payment terms were favourable, strengthening our overall position. A healthy cash flow allows you to meet obligations, seize opportunities, and sleep better at night. Tools like automated invoicing and early payment incentives can help keep the cash flowing. Also, a good credit controller is money well spent!

3. Reinvest in Your Balance Sheet: Build Your Safety Net

Every year, reinvest a good percentage of your profits into your balance sheet. Build up reserves so you can weather storms, make strategic investments, or pivot when needed. This isn’t just about prudence, it’s about giving yourself options. A strong balance sheet is a signal of long-term thinking and financial maturity. It’s also reassuring to external stakeholders you are doing your best to give your business options for the future.

4. Negotiate Everything: The Value Is in the Details

Whether it’s supplier contracts, software subscriptions, or insurance policies, always negotiate. Achieving value through every purchase is essential. Don’t just accept the first quote - ask questions, compare options, and push for better terms. This mindset can save thousands over time and improve your margins. You also as a leader need to teach this behaviour to the people you work with. It’s a skill which takes practice to master, it’s important you embody the right behaviours here. Never just split the difference, fight for a deal you think is good value.

5. Pay Promptly - Your Reputation Is a Currency

Build a reputation as a reliable payer. Suppliers talk, and being known as someone who pays on time builds trust and opens doors. It can lead to better terms, priority service, and stronger partnerships. Everyone wants to work with businesses that honour their commitments.

6. Align Costs with Strategy: Don’t Spend Blindly

Every pound spent should make sense in the context of your business strategy. Are your costs aligned with where your business is heading? If not, it’s time to reassess. Financial discipline isn’t about cutting costs, it’s about spending wisely and intentionally. For example, If you want to focus more on using technology to drive efficiency long term, do you have the right balance between salaries and technology investments. The expenditure needs to make sense not just for where you have been but also where you want to go as a business

 7. Think Long-Term - Flexibility Is Your Friend

Financial agility is about being ready for change. Whether it’s a new market opportunity or an economic downturn, your financial setup should allow you to adapt. That means keeping overheads lean, maintaining liquidity, and planning for multiple scenarios. Long-term thinking paired with short-term flexibility is a winning combination.

We aren’t by any means perfect and we still have a lot of lessons to learn but some of the above tips have really served us well. I hope they help some others out. If you have any thoughts on the above let me know!