Why You’re Lacking Funding For Growth
Small businesses are often trapped in an eternal loop of needs. They need fundings to grow, but they need to grow to accumulate the necessary funds. It’s an ironic situation that somehow can’t come to a clean resolution unless small businesses can develop a new strategy to generate the required funds.
Indeed, the only way to break free from this vicious stagnation loop is for business owners to get creative about their growth strategy. While capital is a key factor of growth, the ways to increase your business capital are, thankfully, more varied than just improving your productivity. Four critical elements can affect business financing, which you can address accordingly to free yourself from a stasis loop.
#1. You spend money on resources too early
It’s a common mistake for small businesses to hire more staff than they need during the early phases of the company. While you might need additional skills and workforce, your company may not be able to sustain the financial consequences. But, relying on cost-effective and tailored alternatives can provide just enough breathing room for positive cash flow. Outsourcing some tasks to professional third-party companies can ensure that you stay on top of your productivity without the inconveniences of recruiting, training and maintenance costs. Similarly, hiring freelancers and contractors by project also provides a budget-friendly solution.
#2. You don’t know how to convince lenders
You may not need to build up the growth capital you need to expand your business. Indeed, that’s precisely why commercial loans are about! However, too many small companies struggle with the components of a business plan, meaning that they are unable to present a solid case to convince lenders. Indeed, lenders need reassurance that your cash flow can sustain loan payments – you can’t apply for a loan without income statements. Failure to produce a plan that displays your management, marketing and financial strategies can affect your application success.
#3. Nobody knows you
You can’t grow if you don’t know how to network correctly! Small businesses, especially, need to build a strong network community in their local market, as this is where their first clients will be. Being part of a local business community provides you with the recognition you need to approach new projects and build support – from the local economy. Needless to say, launching a new business on the market can take a lot of time and effort. But growing it without a supportive network is impossible!
#4. You’re not selling to the right audience
Marketers find it difficult to get noticed by their target audience. Ultimately, as your audience is surrounded by content all the time, it can be tricky to stand out. But, what is more worrying, is that 72% of marketers say they can’t find their target audience online. Indeed, in an attempt to reach out to the broadest possible community, you might be failing to stay relevant to your niche target. Consequently, you are missing potential buyers.
Growth comes from money – no point denying it. However, gathering the capital you need from growth requires strategic planning, starting with reducing unnecessary costs to developing a convincing and researched plan of action for the future.