5 Ways that Business Finance can Help Grow Your Business
Over 60 percent of small businesses in Australia close in the first three years. Highly competitive markets, inadequate staffing and slow paying debtors can all have significant impact on business operations.
Fortunately, each of the above can be solved by some form of business finance. Small business finance options are not limited to a standard principal & interest business loan - there are many loan structures that can help get your business on track to grow and survive that critical 3 year mark. Here we list 5 ways that business finance can be used as an asset to help grow your business.
1. Increase Staff to Grow with Demand
A lot of small businesses struggle because they don't have enough employees to handle the demands of their customers. Even if the flow of customers isn't constant, you don't want to appear incapable as a small business. People want service, convenience, and results on an individual level.
A commercial line of credit may help to grow your business by allowing you to employ and adequate number of staff to meet growth demands.
2. Improve Cash Flow During Slow Seasons
The test of a successful business isn't how well they do during ideal sales opportunities. What matters most is how you manage the dips in income between your strongest seasons.
Slow paying clients can have a huge impact on cash flow, leaving many businesses without the means to pay their operating expenses. Rather than risking your credit rating or irritating suppliers with late payments, you could secure debtor finance to act as a low-cost safety net. Alternatively, a business line of credit facility may be appropriate to help meet your expenses and obligations.
3. Build on Training and Supplies
Another overlooked area of small business growth is employee development, as hiring and training of new employees can be an expensive investment. The best way to avoid having to pour more than you need to into new hires is to
1) invest in efficient/effective programs
2) find a great hiring manager, and
3) keep investing in the employees you have.
Focusing on employee development is difficult to do when operating on a tight budget. That's why a line of credit can really strengthen the core of your company and enhance your business reputation.
4. Expand Your Marketing Budget
This category sort of speaks for itself. Without an adequate marketing budget, your business can simply fizzle out. When you experience a slow down in sales, usually the marketing budget is first to get cut. Stop making this critical sacrifice and get the money you need now to make your brand visible, and start to grow your business today.
5. Scale Your Inventory
Inventory issues are another factor that often hold back small business growth. Without the capital, it's a struggle to decide how to scale your business. You want to have the inventory for seasonal opportunities, but you don't want to sacrifice in other areas.
Cash flow funding or even a business loan can help fund inventory, allowing you financial space to capitalise on sales opportunities.
Grow Your Business with Funding Today
Almost every small business in Australia can benefit from some form of business finance. It's all a matter of know when and how to use it to their advantage. If your business is struggling or you want to do more and grow faster, contact us today. At Lendfin, we can work with your business to plan a funding strategy that will help you grow.