Where do you find money to increase profitability? Here are some good ideas for increasing your bottom line enough to expand your burgeoning business.
1. Bootstrap your business
So long as you are not trying to break into the diamond and precious metals business, or any other industry that requires considerable capital, you should be able to finance your own venture. Best of all it may not be as costly as you think.
You may not have the savings collected that will fund your full expansion, but you may still be able to get a 0%/low-interest line of APR business credit. This offers you the opportunity to borrow for a specific period of time without having to pay any interest.
You may think that funding the venture yourself will be too much for you to take on at this moment. But, stop for a moment and consider your potential to do just that.
Brent Gleeson is a leading expert on organizational transformations and has this to say. “So long as you believe fully in your plan and have faith that it will indeed grow into a profitable venture you should have no problem investing your money in it.”
As a matter of fact, by investing your own cash in your business you will probably make investors and partners more inclined to follow suit.
2. Launch a crowdfunding campaign
Crowdfunding has a long history of providing success for those willing to take the chance. So long as you are launching the right product to the right people, there will be an audience that will back you and your ideas up.
Here is one such tale! Back in 2013, a manufacturer of affordable desktop 3D printers, Formlabs, raised a full $3 million on the Kickstarter platform. This capital was more than enough for them to grow their operations and reach their goal of creating more affordable 3D printers.
It was not long until their ideas caught on and venture capitalists began to smell the tell-tale fragrance of success. Formlabs then closed another $19 million and were allowed to expand beyond their previous goals.
Crowdfunding allows you to connect your ideas to the right kinds of minds to propel your plans. It can also be most enlightening to see the kind of support there is behind your concepts and ideas. More importantly, you may be able to collect cash to fund your business expansion.
3. Apply for a loan
Technology has found many great ways to match investors to the ventures they are seeking, there are still plenty of options for traditional financing that you can consider. According to the statistics held by the SBA, Small Business Association, almost 75% of all financing for new business comes from business loans, lines of credit, and credit cards.
As a rule of thumb, you will find that small business loans come with some of the most favorable rates and terms you can find will come from the SBA. You will need to meet some of the following requirements:
– Your business has been around for 2 years or more
– The business has strong annual revenues, typically $100,000 or higher
– Good credit (640+)
These rules are not carved in stone and you may find that individual lenders have higher or lower standards depending on their own scrupulous purposes. If you don’t qualify for one of these loans that offers a good APR, there are other types of funding available as well such as Cobra payday loans.
Another option would be applying for invoice financing to collect this money faster. On the other hand, if you are looking for cash resources for the specific purpose of improving your equipment, devices, furnishings etc. You may qualify for equipment financing.
Before you take the step to apply for proper financing, take the time to prepare all the documents you will need beforehand. You will need to show your profits and loss statements, tax returns, balance sheets and bank statements. In some cases you may have to provide documents with personal information too.
4. Raise capital by asking friends and family
Finally, one way to get your hands on the resources you may need to expand your business could come from family and friends. According to the statistics held by the Global Entrepreneurship Monitor, 5% of all adults have invested in a company that was started by someone they know.
According to Caron Beesley from SBA, the best idea is to seek out one or two family members who have a good head for business. You can also consider narrowing your choices down to the family and friends you have that will actually believe in you and support your goals after fully understanding the risks involved.
After you have successfully found this funding you should also take your time to exercise due diligence and passion for your business. Furthermore, you should be completely certain about how much money you will need and why.
Then, be absolutely clear about how the loan will work and in which form. You could commit to a repayment plan and there are websites that offer this service that will document the transactions and manage the loan.