How to grow a business using business loans
Invest in the essentials first
While it’s tempting to spend your newly-acquired funds on a large-scale marketing campaign, it’s important to focus on the basics. Ensure you have all the equipment you need, build your website, and secure enough inventory if you’re selling a physical product.
Plan your budget
Many SMEs receive a business loan then proceed to spend that money quickly. This can lead to problems in the future: an opportunity may arise, but you may not have the funds to take advantage of it.
Have a clear cash flow plan, and always look for opportunities to cut costs. Don’t forget to add a buffer for any unexpected situations that may arise.
Spread the word with marketing
Marketing is a key part of promoting your business. Once people know about your business, they’ll be more likely to consider using your services or buying your product in the future. Focus on cost-effective actions that will have a lasting impact, such as content marketing or participating in local events. A big advertising campaign may make a bang in the short term, but isn’t sustainable in the long run.
Reinvest profits back into your business
Once you have money coming in, it’s a good idea to reinvest that money into growing your business. Use the profits to increase your marketing spend, hire new employees, or expand your operations to keep up with demand.
Managing business loan risk
While there are many advantages to using loans as part of your business growth strategies, they also come with more risk.
These tips can help manage some of the risk associated with getting a business loan:
Schedule your repayments and set up calendar reminders so you don’t forget.
Put your money in a separate account.
Don’t ask for more than you need. Ask for enough to fund your business growth, and focus on paying that loan back.