You should never start a company and stop development after you hit a certain point where you are comfortable with your profits. The market constantly changes – in this day and age, faster than ever. If you want to stay ahead of the competition, you need to be able to foresee those changes and adjust accordingly. Therefore, you should always do business with the idea of growth in mind. Here are the six best ways to finance and expand your small business:
1. Self-financing
The easiest and fastest way to secure extra funds is by financing out of your own pocket. When a profitable market opportunity presents itself, it's important to act fast and make use of it before the competition does. In such situations, you won't always have enough time to secure additional funding through traditional means. Your own money is, therefore, the best solution. Not only will this be quicker but it also gives you total freedom of decision over the allocation of those funds. If you pay for something yourself, you get to decide what exactly you are investing in and you also get to reap all the rewards.
2. Friends and family
If you don't have enough private money to finance the growth of your business yourself, the next best thing would be to ask for help. One option is to secure funding through friends and family. This option is relatively straightforward as people who are close to you are very likely to help you out. However, there are a few drawbacks to asking those people for money. If things don't turn out the way you expected, it's easy to lose their trust, also it's much harder to say no to them if your business ideas are not the same. It's very important to have a clear strategy in mind before you ask for financial help and make everyone aware of how exactly you plan to use those funds as well as the potential risks and rewards of such an undertaking.
3. Consider a partnership
Partnering up with another likeminded individual is a great way to secure additional funding. Besides financial help, a partner can provide help in the form of advice and support. When important decisions need to be made, it's always easier to make them together. A partner should be someone who has the same vision as you but not necessarily the same skills. It's always good to find someone who complements your skills and has knowledge and experience in areas that you don't. This way, you can help each other and build a much more stable company together.
4. Funding through loans
The traditional method of funding is through bank loans. This is a relatively straightforward practice where you approach a bank and get information about their lending practices. While the idea of getting loans this way is relatively simple on paper, the procedure of securing those loans can be surprisingly complicated in practice. Most banks are reluctant to give loans and require a time-consuming background check. There is also the option of fast unsecured business loans. These kinds of loans are much simpler and faster than traditional loans and are becoming increasingly popular among small business owners.
5. Increase sales
If you are already managing a profitable small business, the simplest solution to secure funding might be through additional profit. There are certain strategies that you can use in order to temporarily increase sales and secure additional funding. Offering discounts and promotions with benefit to people who buy bulk amounts is a nice way to stimulate sales. This tactic does not have the same profit rate as standard sale transactions but it's a good way to secure additional funds in a short period of time, which can be more profitable in the long term if you require money for a quick investment.
6. Crowdfunding
Crowdfunding is a relatively new way of securing funds but it's been proven to be very successful and is quickly growing in popularity. The idea is simple; using online platforms, you can present your idea to a huge amount of people and give them the option to invest in return for small rewards. The benefits of such funding are that you are not selling your company and get to actually keep all the money and decide where to invest it by yourself.
Having the necessary funds available to make quick investments is crucial for the survival of small businesses. Unfortunately, it's not very profitable to keep money lying around and when the opportunity for investment presents itself, you need to come up with ways to secure funds. Use the tips above to get those extra funds when the need for them arises.