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Small Business Funding

Small business funding can be a major challenge. Entrepreneurs need to have a plan before making the first purchase. Particularly, if you have a business that is capital intensive. Without a plan and a budget, you can quickly find yourself hemorrhaging cash resources.  Items need to be broken out into 3 different groups: Starting Up, Production and Growth. The three lists also assist with developing a timeline. Allowing some expenses to be delayed until revenue is being generated.

Starting-Up

List every item you need to get that first customer through the door. Examples, government licenses, office space, office furniture, computer, website, business cards, marketing materials, and budget, etc. Always shop around for alternatives and any discounts. You should evaluate at least 3 different options for any purchase. The software “purchases” can be a hassle these days. Many companies have moved to the subscription model where they want to charge you a monthly fee forever to use their software. It is tempting to just take the monthly rate but compare the annual rate to determine if it would make more sense to purchase the annual subscription. Although it may be in the back of your mind, I may not be in business in a year having that expense paid a year in advance lowers your monthly expenses.

Production:

What items are needed to provide the service or deliver the products?  If your business requires inventory be readily available, order a reasonable amount based on how long it will take you to restock the product. The shorter the re-supply time the lower your initial order should be. If the product has a significant turnaround time you may want to order a little more. The last thing you want is not being able to met customer demand. When possible outsource some of your more mundane tasks that take away from revenue-generating activities. While it may feel great to do everything yourself, it’s is not the most efficient use of your time to do everything. Websites like Fiverr and Upwork can help with just about any task and have virtual assistants for hire.

Growth

As your company grows additional resources will be needed to expand or take on larger customers. It may mean hiring fulltime employees. We all know that nothing is guaranteed in business. But as much as possible have a clear picture of how the additional allocation of resources is going to improve the bottom line. Example, you have a carpet cleaning business that is booming and you are working the business alone. Because you are unable to meet the demand you are missing out on business, It would be worthwhile to add an employee that would help you capture that revenue.

Marketing

Marketing is also one of the biggest challenges facing small businesses. There are so many options and people calling you out of the blue with SEO services, Google Ads, Yelp etc. I recently had a client sign a 12-month contract with a well-known platform for $600 per month. They promised him they could deliver customers needless to say that didn’t happen. That $600 should be used across several different online and offline advertising mediums. Every small business wishes that they could place a few online ads and watch the customers roll in. Unfortunately, it does not work like that for small local companies. Online efforts should supplement your real work marketing, print, direct mail, newspaper ad etc. Find out which channels deliver customers and scale your ad dollars up in that area. If direct mail is producing more customers than Facebook ads, redirect your facebook dollars to direct mail. If your business is strictly online you still need to test to determine which platforms deliver. You should always be testing and measuring your products/services and marketing efforts. The data doesn’t lie. I hope you have found this article helpful. Please read 10 steps to start your business in 2018 here for more great tips. Please signup for our newsletter below. Our content may contain affiliate links to partnerships that we use and recommend. The information provided is without bias.

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