Are you the manager of a fast-growing business? The cost of growth can quickly get out of control, causing cash-flow problems. The financial consequences of hiring too quickly or purchasing a building may surprise you months down the road.ÊÊYou can take steps now to minimize your risk and protect yourÊcash flow.ÊÊConsider these three tips for growing your business without busting the bank:

Tip #1: Right-size your building. If you need to select and move into a larger building, get creative. You don't want to end up with too much or too little space one year from now. Lease one-half the space now with the option of leasing the other half as your business expands. As you consider various locations, determine whether the neighborhood can accommodate your needs over time—is there room to grow across the street or next door. If you decide to go with a large building right away, sublet what you do not need to other businesses. If you plan to purchase a building, do it outside the corporation. Owning the building outside the business keeps it free from creditors and allows you to collect rental income from your business.

Tip #2: Design your talent team. Few entrepreneurs can afford to hire an executive dream team from the start. Use outside consultants to help you make key decisions, create a strategy for growth and manage risk. Entrepreneurs with a lean staff can use outside consultants in the areas of accounting, marketing and human resources, for instance. When you hire, look for people who can multi-task. Hire a bookkeeper who can do both accounts payable and receivable. Look for an administrative assistant who can also function as a receptionist and typist. Hire a controller with experience in technology and human resources. Another tip: Outsource your payroll. Payroll is tedious and time-consuming and there are significant regulatory issues. Save yourself the headache—go with a reputable payroll service so you can ask your accounting staff to focus on tasks that add value to the business such as accounts receivable collection.

Tip #3: Develop internal controls. Growth can expose a business to fraud, embezzlement or costly mistakes. Work with your accountant to establish internal controls to protect your business. Ask your accountant to help you develop policies and procedures for your accounting staff. Invest in technology that gives you timely and accurate financial reporting. There are several ways to catch problems or avoid them altogether. Have your company's bank statements mailed directly to your home so you can review deposits and withdrawals. Place spending and check-signing limits on your personnel. Take regular inventory counts to monitor your assets. Employees are less likely to embezzle from an owner who is actively involved in the business.

Rob Babek is a Stonefield Josephson Principal and business consultant. For additional information on how to grow your business without busting the bank, contact Rob Babek at 310-453-9400 or rbabek@sjaccounting.com.

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