Every business owner has the same goal when they start their own company. They want their business to be successful, grow and flourish. Small business owners should know that certain acts can make or break their future business profits and growth potential. Here’s what small business owners should know about the various ways to grow a business.
Adequate Capital to Grow a Business
Starting and growing a small business is a big financial undertaking. The reality is that most small businesses that fail during the first five years do so because they lacked adequate capital to stay afloat. To start up and grow a business will take money, probably more than you even anticipated at the outset.
When you need funds to grow a business, take the time to explore various financing options. You want to educate yourself on the interest rates and other terms. Also look up reviews online to make sure the lender isn’t predatory and hasn’t destroyed an inordinate number of the small businesses they lend to.
“In this world you’re either growing or you’re dying, so get in motion and grow.” – Coach Lou Hotlz
Here are the details on what you should know about the various financing options available to small business entrepreneurs.
1. How to Get Your First Small Business Loan
You’ve probably heard the saying, “It takes money to make money.” It’s a popular saying because you’re not going to be able to get your business off the ground or expand it when it’s doing well unless your business is adequately funded.
If you’re independently wealthy and can fund your business out of your own pocket, then you’re one step ahead of the game. Feel free to skip ahead to the next section. However, most small business owners need to pursue a business loan sometime during the life of the company.
If you’ve never secured a loan for personal or business use, then you may not know where to start. Realize that by educating yourself and preparing for the process, it’s likely you’ll be able to find and secure the right small business loan for your company’s growth.
Lender requirements vary from business to business and from lending institution to lending institution. Traditional banks tend to be more stringent about their application requirements. Contrast that with community or microlenders who may be more concerned with your personal business attributes.
Take the time to find the loan and lender that work best for your business needs. What steps do you need to take to secure a loan for your small business growth or expansion? Get Your First Small Business Loan walks you through the ins-and-outs of what you need to know to secure a loan to grow a business.
2. How to Use a Line of Credit to Grow a Business
Business loans aren’t the only way to fund and expand your small business. Business lines of credit offer an alternative financing option for entrepreneurs.
How do business lines of credit differ from traditional business loans? Here’s the difference, in a nutshell: a business line of credit allows the business owner to draw money from an open line of credit when the financial need arises. The lender sets a cap on the amount the business owner may draw from the line of credit. Interest is charged on the amount the owner uses. In a sense, the business line of credit is similar to using a credit card.
Why would a business owner want to use a business line of credit? Business lines of credits are designated for temporary, transient business capital needs. For example, a business owner may use a business line of credit to pay employees during a cashflow shortfall. Or a business owner may use a business line of credit to expand their business and purchase more inventory or lease square footage, with the idea that those funds will be recouped soon.
Other ways a business owner may use a business line of credit include:
- A business emergency
- Cash flow issues
- Seasonal costs
- Vendor invoicing
- Buying new business supplies
- Buying a new business outright
Using a business line of credit can help keep the business afloat during particularly tough times. Business lines of credits may also help business owners to secure financing for a larger expansion though a lender. To learn more about how and when to use this financing tool, visit our resource Lines of Credit for Your Small Business.
3. How to Use a Working Capital Calculator to Prepare for Future Growth
Another vital consideration to funding your business start-up and eventual expansion is your company’s working capital.
“Working Capital” may sound like a phrase that an MBA professor would toss around during a lecture. What does that fancy term mean? The bottom line is that “working capital” translates to how much money you need to run your business on a day-to-day basis so you can pay for overhead expenses like rent, equipment, and inventory, debt, and employees.
A well-funded business will have enough working capital to keep the doors open in the present and to prepare for future growth and expansion. Robust amounts of working capital correlate with a financially healthy bottom line. In fact, banks and lenders look at adequate working capital as a strong indicator of a small businesses’ future financial viability. The amount of working capital a business has available is a unique tool for making operational, hiring, and expansion decisions.
How do you determine if your small business has sufficient working capital for current operations or to expand? Calculating the amount of working capital a small business needs is not a one-size-fits-all proposition. Some businesses will need more working capital than others. For example, a brick-and-mortar retail store with a storefront lease and high inventory needs will have greater working capital demands than a similar online shop.
Online tools can help you determine the amount of working capital that your own business needs. Use our interactive online Working Capital Calculator to prepare for your businesses’ financial future.
4. How to Know When It’s Time to Grow a Business
Now that you’ve considered how to fund your business, both in terms of daily operations and long-range expansion and growth, it’s time to consider when you’ll make that move to expand or otherwise grow your business.
How do you know when it’s time for your business to grow? There is no hardline rule to help small business owners determine whether it’s time to grow, but there are certain factors pros say to consider growing when:
- You need more space
- You can’t handle all the business you have
- Your business is consistently profitable
- Your industry is growing at a rapid rate
- Your business operations run smoothly
- You have funds to grow the company
For a detailed analysis of the factors to consider visit Is it Time to Expand Your Business?
The Importance of Social Media in Business Growth
Leveraging social media can be an important tool in your arsenal as you grow your business. It’s important to know that simply getting online and posting to social media isn’t guaranteed to win your business. You need to carefully consider the value of your time when it comes to all the demands of running your business.
If you decide you have time to devote to social media, then that’s great news. According to Ambassador, “71% of consumers who have had a good social media service experience with a brand are likely to recommend it to others.”
Here are top issues to know about social media and your small business growth.
1. Small Business Social Media Trends
Social media is constantly in flux and the trends come-and-go in the blink of an eye. Small business owners in today’s world are wise to stay abreast of these trends, particularly if any part of your customer or client base is part of a younger demographic.
You don’t need a full-time social media consultant to keep you up to speed, but you should try and focus on some key points. No matter what the trends are, high-quality content on your chosen platforms will keep you on top of the social media game.
Equally important is a social media posting that’s consistent. Also, social media is nothing if not SOCIAL—so make it a point to communicate with your audience and respond to their interactions. These points can help you weather the trends and maintain a constant social presence.
According to the social media specialist at Samuel Adams online business success is about developing and building relationships. Developing these relationships will allow you to organically expand your business as your audience grows. Note that is not an overnight endeavor, you’ll need to expend effort, time, and energy in creating trust and opening the channels of communication.
However as you become more proficient at social media and communicating with your audience, you’ll start to develop an authentic connection and a natural rapport. Over time, your company can develop its own loyal brand following and dedicated audience
For more details on how to make the modern social media trends work for your small business check out 5 Small Business Social Media Trends 2017. Honing in on any one of these trends can help you stay current and connected on your business social media platforms.
2. Business Social Media Pages and Advertising
Even if you currently use social media for your own personal use, business pros advise that all business owners should have clearly delineated social media accounts and pages exclusively for business. Your business social media can help you track and quantify users, posts, and feedback.
Another advantage of business social media is the ability to advertise. Your business social media has access to paid posts, promoted posts, and other forms of advertising. This is an invaluable resource for a start-up looking to boost business.
Anyone who has tried to manage a business page on Facebook knows that Facebook hides your content from the majority of users, even people who like and follow your page! Buying Facebook ads is the way to get your content widely seen.
How do get your accounts set up? Here’s how to get your social media presence off the ground Social Media Marketing: Guide to Setting Up Social Media Pages for Business.
3. What to Share on Social Media
To get the most out of any social media presence, you need to create engaging, high-quality content for your audience. Your customers and clients expect to see new, up-to-date, and engaging content on your platforms. How do you generate that high-quality content they demand?
Visit What to Share on Social Media for actionable ways to maximize your social media strategy, target new customers, and ultimately grow your business.
For tips on developing and implementing a social media marketing content strategy visit Small Business Marketing: Social Media Content.
For in-depth pro tips on the best ways to market to and engage your social media audience to grow your business, check out Small Business Strategy: Social Media Engagement.
Finding and Keeping Customers
Attracting customers to your business is crucial to your business growth. Customers are what keeps the doors open and keep your company profitable. Small businesses are in the unique position of being able to interact with each of their customers on a personal level.
1. Attracting Customers with Marketing
How can you maximize that interaction so that one-time customers become repeat customers? Visit the Hartford Business Owner’s Playbook’s top tips on how to attract customers to your small business.
Attracting customers and marketing go hand in hand. Marketing is simply “anything which features your logo or brand on it.” In the broadest sense, marketing is anything which allows prospective clients or partners to connect with your brand. Making that intellectual and emotional connection is what makes the sale and grows your company.
If your business has a heavy online component, you should consider harnessing the power of Search Engine Marketing (SEM) by purchasing Google Ads. You can also look into purchasing Facebook ads and Instagram ads if you have a strong social media presence there—or even to get started building your presence; you can buy ads that get your account some attention. You can use ads to grow your email list, to publicize deals and coupons, and to promote events.
Modern marketing is all about knowing your customer. Today’s small business owners need to customize their messages and branding for the audience they wish to target. To learn how to create marketing magic for your small business, visit our resource Secrets of Amazing Marketing.
2. Keeping Customers Via Excellent Customer Service
No matter what business or industry you’re in, providing top-notch customer service can make or break your company. Flawless customer service is a must to run a profitable small business.
Customers love to share their experiences—good or bad. The Internet and online reviews have made it so that customers can share their experiences instantly with thousands at the push of a button. When you make your customer happy, they’ll share that experience. When you screw up (Hey, it happens!) but you go the extra mile to make it right and satisfy that customer, they’ll share that experience.
A loyal customer will recommend your company, which will help your company land new customers so you can grow. Customer service seems so basic and intuitive, and in some ways it is. However, there are certain customer service rules which can put you ahead of your competitors.
Check out 10 Customer Service Rules to Abide By to make sure you’re providing platinum-level service for each and every person who patronizes your business. Your handful of loyal customers will eventually expand if your customer service is world-class.
The Importance of Being a Great Boss to Grow Your Business
Learning how to be a top-notch boss is a learned skill. However, it’s a skill that you should try to cultivate. Ultimately, excellent leadership, quality hiring, and an incredible company culture can make the difference between a company that shutters the doors at the one-year mark or celebrates their Golden Anniversary.
1. How to Use Leadership to Grow Your Business
When you first start dreaming about your business, you spend time planning the funding, location, products, customers, and your business plans, but you may not give much thought about how to best lead your employees.
How you lead the company ultimately has an impact on the bottom line. When you’re the founder and CEO of your company, then all decisions ultimately come back to you. Trying to find your footing as a boss while simultaneously running business operations can take some trial-and-error.
What is your management style? How should you interact with employees? Do you want a formal office environment or a more relaxed one? How should you hire? How should you fire? Learning how to lead a company and hire, train, manage and terminate a staff isn’t something which is completely intuitive.
Check out How to Be a Great Boss for the Do’s and Don’ts of communication, mentoring, and managing so you can grow your company into a successful venture.
2. How to Create a High-Performance Corporate Culture
You may be surprised to learn just how important corporate culture is to the future of a company and its potential for growth. Harvard Business School reports that corporate culture “can account for 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.”
That’s right—30%! That’s a huge percentage. The research indicates that how your employees feel about your business impacts how well they work.
What is corporate culture? Corporate culture is the intangibles which define a company. When you’re the boss, ultimately the corporate culture is within your ultimate control. How do you create a winning corporate culture?
The Harvard Business Review reports that six unique factors create a winning corporate culture including:
For a detailed exploration of how to influence corporate culture for top performance visit How to Create a High-Performance Corporate Culture.
3. Embrace Workplace Diversity for Business Growth
Another buzzword which is hot in the modern business world: Diversity. You may be thinking that implementing staff diversity is a good business practice, but what does it have to do with growing a business? The answer may surprise you.
Research and aggregation of business data indicate that companies who have diversity earn greater profits than companies lacking in diversity. It’s posited that this is due to the fact that workplace diversity produces measurable benefits for the company and its employees. These benefits include high company morale, greater employee loyalty, and an improved sense of community. Moreover, diverse companies may attract a wider, broader range of talented applicants.
For more information on which why diversity is key to modern business growth visit: Why Workplace Diversity Matters.
Learning the tactics and skills necessary to grow your business is necessary for the future of your company and its financial well-being. Use our tactics to help your small business flourish. With preparation, planning, and hard work, your business can become more lucrative than you ever dreamed—now, and in the future.