At first glance the financial component of a growth initiative may seem very cut and dried. Nothing could be further from the truth

To effectively manage the financial side of a growth initiative it is imperative to address the emotional side of your organizations finances. It has been our experience that few owner/operators of businesses approach the finances of their organizations with breathless anticipation. Most view it as a necessary evil for running a successful business. They are correct in this view - the necessity angle that is!

In order for a business to be successful and grow it must have a solid and continuous grasp on the financial picture of the organization. Those organizations that run their financial management practices the way they run their household budgets will find themselves more and more in hot water as the organization grows. It simply isn't feasible to manage an operating budget the way you do your household budget.

Businesses that are serious about strategic management and growth should invest in a financial management system that has the capability of providing any and all levels of management with timely and relevant information. With a financial management system, a company's invoicing can be done in an accurate and timely fashion. Receivable reports can assist in getting a handle on collection of invoices, which results in better cash flow management. Marketing and sales efforts, even customers, can be tracked to calculate a sales lifecycle return on investment, so sales efforts can be focused in the most efficient methods.

The key information focus areas of such a system are planning, control and performance evaluation. It will also provide a company with the non-financial information that is needed to view the 'big picture'. The overriding benefit of using a computerized system is that it allows all levels of management to adopt a more proactive decision-making practice regarding its growth initiative.

None of us like to be in debt in the personal side of our lives, but its a reality with which one must become comfortable when a growing business. It is the cost of doing business. Those organizations that don't come to terms with this reality will always find themselves short in the operational cash department when they attempt to operationalize their growth initiative.

It only makes sense that costs will increase as you begin to expand or grow your business. Whether its more equipment, space or people, theres always a price tag attached. Without the proper funds available to allow you to effectively run your operations while you grow your growth initiative will be a very short-lived one.

To launch a growth initiative that has any hope of success it is necessary to take a deep breath, get that loan or line of credit and USE IT! Otherwise, you will always be robbing Peter to pay Paul and you know that 'ol Paul's needs are going to sabotage your growth efforts by draining your funds pool!

As has been stated many times before in this monthly column, change is never easy. One of the most difficult aspects of effectively managing it is being able to come to terms with the emotions attached to each stage of change and mold them into a productive force within this new reality.

Copyright Kelly Melanson, Certified Management Accountant