Expanding Your Business? The Numbers You Need to Review First

When your business starts to grow, new clients, higher turnover, a busier team, expansion feels like the logical next step. But growth can be a double-edged sword.

Every decision to hire, lease, upgrade, or invest brings more risk. The key is not whether to grow, but whether your numbers support it. Get them wrong, and you could run out of cash, stretch your team thin, or scale unprofitably.

Let’s explore the 5 numbers you must review before scaling, how to measure them, and why each one genuinely matters to your business success.

1. Cash Flow Forecast

Can You Afford This… Really?

Why it matters: A profitable business can still fail if it runs out of cash. Growth usually means upfront costs: recruitment fees, deposits, onboarding time, new systems, all before revenue catches up. If you don't forecast your cash, you might say yes to expansion while being weeks away from missing payroll or a tax payment.

How to implement:

• Build a 12-month cash flow forecast in Excel, Google Sheets, or tools like Float or Xero.

• Input expected income by customer and due date, and expenses by category and frequency.

• Factor in hidden costs like VAT, PAYE, insurance, subscriptions, and staff training.

  
  

How to measure:

• Review monthly: Actuals vs Forecast.

• Set alerts for low cash thresholds.

• Check your “cash runway” how many months you can operate without new income.

2. Gross Margin

Is the Growth Worth It?

Why it matters: High sales don’t always mean high profits. If your gross margin is poor, i.e. the profit after direct costs, then scaling just multiplies inefficiency. You could work harder, grow revenue, but end up with less in your pocket. If you don’t know your margin by product or service, you’re scaling blind.

How to implement:

• Calculate: (Revenue – Direct Costs) ÷ Revenue.

• Break this down by service line, client, or department.

• Use tracking in Xero, or Excel templates if needed.

  
  

How to measure:

• Set margin benchmarks (e.g. 40% minimum).

• Use monthly dashboards to monitor margin drift.

• Highlight anything trending downwards over 3 months.

3. Capacity Planning

Can You Deliver What You’re Promising?

Why it matters: Growth without delivery is dangerous. Adding clients or launching services without understanding team capacity leads to missed deadlines, lower quality, or staff burnout. You risk damaging your brand just as you’re trying to build it.

How to implement:

• Create a simple spreadsheet or dashboard tracking each team member’s available hours vs allocated work.

• Start with a “50 hours per client per month” assumption if offering part-time finance functions.

• Include time for internal admin, meetings, reporting, and holidays.

  
  

How to measure:

• Monitor utilisation rates (billable hours ÷ available hours).

• Flag individuals consistently exceeding 90% capacity.

• Forecast future hires by mapping new client work onto existing resources.

4. Break-Even Point

How Much Pressure Are You Adding?

Why it matters: Every expansion increases your overhead: staff salaries, rent, software, insurance. If your new revenue doesn’t cover these costs quickly, you’ll be under pressure from day one. Many SMEs scale too fast, not realising how thin their margin becomes.

How to implement:

• Break-even formula: Fixed Costs ÷ Gross Margin %.

• Include salaries, rent, subscriptions, software, and overhead buffers.

• Recalculate every time you change your cost structure (e.g. hire someone, take on new software).

  
  

How to measure:

• Set a revenue target to hit break-even monthly.

• Use forecasts to model what happens if income drops 10–20%.

• Monitor actual vs break-even in real time.

5. 🧠 Scenario Planning

Are You Ready for the 'What Ifs'?

Why it matters: Very few plans go 100% to plan. New clients take longer to onboard. A hire may not work out. A supplier cost might spike. If your finances are built only for the best case, you’ll be exposed. Scenario planning helps you stress-test decisions, protect cash, and stay in control.

How to implement:

• Build 3 forecasts: Best, Base, and Worst Case.

• Include key assumptions: sales timing, payment delays, client retention, hiring costs.

• Use tools like Fathom, or Excel with variables built in.

  
  

How to measure:

• Compare actuals monthly to your Base case.

• Keep a risk dashboard: client churn rate, late payment exposure, project overruns.

• Set contingency actions for each “What if?” (e.g. freeze hiring, delay capital spend).

How JFA Can Help

At Jones Financial Accounts, we support ambitious SMEs who want to grow,but grow smart. Acting as your part-time finance director, we help you:

• Build decision-ready forecasts: We create 12-month rolling cash flow forecasts tailored to your business model, including tax obligations, payment patterns, and seasonal shifts.

  
  

• Analyse profitability before you scale: We assess your gross margins, cost base, and pricing model to make sure you're not expanding something that’s eroding profit.

• Plan resource and team growth: We map out workload vs team capacity, so you know when to hire, who to hire, and how much that expansion will really cost.

• Model best, worst, and realistic growth scenarios: We prepare you for delays, missed targets, and unexpected costs, so nothing catches you off guard.

• Track break-even and risk in real time: We build custom dashboards that show exactly how far you are from financial pressure or financial confidence.

Whether you’re hiring your first employee or planning a nationwide scale-up, JFA ensures your expansion is backed by data, not just instinct.

Book your free finance health check-in today

Final Word

Growth can build your business, or break it. The difference is whether your numbers support your decision.

If you're planning to scale, don’t guess. Build the systems to give you clarity, flexibility, and confidence.

Wrapping up today’s insights, tomorrow we simplify another accounting challenge.