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21 methods to shortly fund what you are promoting development

September
10, 2020

7 min read

The opinions expressed by the entrepreneur's contributors are their own.

A 2020 survey of small business loans published by a collective of Federal Reserve Banks reported that 66 percent of businesses faced financial challenges in 2019. Nevertheless, 57 percent did not apply for funding or third-party funding.

The main reasons cited by those who either did not apply for or approved but declined funding included:

Costs / interest rate too high Unfavorable repayment terms The amount offered was too low. Collateral requirements. Debt aversion Find enough funding from other sources

When entrepreneurs used other funding methods, they often relied on existing business reserves, personal funding resources, or personal credit cards.

Entrepreneurs wanted to use the funds for expansion, operating expenses, debt reduction, or the repair / replacement of capital assets. Funding is more difficult for smaller businesses, younger businesses, and minority-owned businesses. Service companies that lack collateral also have a more difficult time in the funding process.

Despite all these statistics, the need to raise funds to meet spending and fuel growth is ubiquitous. What other opportunities can a company create and release cash to move forward?

As you prepare for growth, keep in mind that growth is consuming resources at an alarming rate. Pre-financing your growth can reduce financial burdens and give you time to reap the benefits of growth. Here are 21 strategies you can use in your small business today to help fund your goals.

Cash generation

You can increase your money by taking advantage of every sales opportunity. When times are good, it is wise to focus on your bread-and-butter chores and say no to other chores. When you need a cash boost, these strategies can uncover opportunities.

1. Increase the prices

Forty percent of the companies surveyed by the Fed saw profits decline in 2019. For those who saw higher business costs, 39 percent said they would not increase prices. While increasing the prices is easy, how you increase them is important. If the price increases below 10 percent, the customer will probably not notice this. Think how much your favorite coffee has changed in price. For price increases greater than 10 percent, a communication and registration strategy will help with adoption because you will get the customer's emotional buy-in to accept the increase.

2. Use upsells

This is the "Would you like that super-size?" Strategy. The idea is that by "upselling" a better or bigger service, the customer gets more value, but your cost of providing the upgrade does not increase exponentially.

3. Use cross-sell

Think of this as the Nordstrom moment: "Would you like me to grab a belt to complete the outfit?" This creates packages across different service types that add value and increase your sales.

4. Let customers buy again

The hardest sale is the first. If the customer is satisfied, they often only need one reason to buy again. A strategy that encourages repeat purchases creates residual income for the company as there are no additional costs for customer acquisition.

5. Generate client recommendations

One way to grow is through customer referrals. Better yet, cultivate your client's voice to become an avid fan of your work.

6. Gather your claims

A quick way to make more money is to keep track of your unpaid bills. Although you can sell your accounts receivable to a debt collection company (where you get only a fraction of the value), a better option is to put in place a strategy that encourages quick and fast payment. This encourages your customers to pay early instead of chasing them down to pay their bills, which opens up your cash flow.

7. Get paid first

Shifting payment into the delivery phase is an effective way to improve cash flow. The requirement of a deposit or prepayment is standard in every industry.

Related Topics: Calculation Factor: How It Helps SME Exporters

Cash management

Balancing a checkbook or budgeting is the training most small business owners receive in managing the company's cash flow. Improving your cash management will reduce stress and free up cash.

8. Review and publish subscriptions, memberships, and perks

With the money flowing, it's easy to add perks or sign up for subscriptions as these sound great right now. According to a 2017 survey by creditcards.com, 48 percent of participants signed up for free trials that were automatically renewed without their knowledge. If you need to release cash flow, check which subscriptions and memberships you are not actively using or which can take a back seat for the time being.

9. Renegotiate monthly costs

If money is tight, first cut down your standard monthly costs where you can. Expenses like rent, utilities, and technology are areas where you can renegotiate or find other low-cost providers.

10. Stop ineffective marketing

Marketing is one of the most essential investments you can make in your business. Few small business owners track the effectiveness of their marketing. Evaluate the results of leads and customers bringing your marketing efforts to the business. Keep what works and share what doesn't.

11. Identify money leaks

Money leaks often trickle out "nickel and cents". Make it an annual practice to look for those small ways that money is leaving your business by reviewing your recurring expenses. Pay special attention to costs that have increased gradually over time or expenses that do not add value to the business. An example could be your internet service. When starting out with a new provider, you often have a special rate for the first year of service. After this period, the service will often increase its prices without notice. The annual audit helps identify these increases and puts you back in control.

12. Forward-looking cash flow management system

This is my favorite small business cash management player. Seeing how cash decisions affect you in the future can help you make more informed decisions.

Related: Marketing Dos and Don & # 39; ts During a Crisis

Cash efficiency

Your return on investment and how well you use the resources you are paying for will all depend on cash efficiency. From the technology to your teams, there is a chances that you are underutilizing some of your resources.

13. Refine routine processes

One of the challenges for service-minded companies is to establish a routine process for the work done in the company. When you and your team can get more out of the company's resources, you will improve your productivity and profitability. Even the most customizable service has a basic process of steps that are used repeatedly to create a consistent experience.

14. Implement time-saving technology

Automation and other technologies can get tasks done in a fraction of the time for a fraction of the cost.

15. Leasing, not owning

While it can be tempting to own, it can be cheaper to lease in the long run. Pay for what you need instead of wasting your money on long-term investments.

16. Sublease unused storage space

Consider turning unused physical assets into a breakeven point or a way to make money.

17. Subcontracting to Other Companies

If the unused resource is your team or your time, consider subcontracting to another company. This is a short term solution to keep the money flowing while keeping your team and costs covered while you rebuild your business.

financing

These options can generate the much-needed funding when traditional sources are not available.

18. Inexpensive SBA Loans

The SBA loan program helps banks extend loans to more business owners by reducing the risk to the credit institution. Your local SBDC also offers free advice on access to capital.

19. Business grants

Recently, large companies have funded grants to support small businesses. Look for companies in your supply chain or companies that support marginalized groups.

20. Friends and family

An old proposition for business owners is to get family members to invest in your business. To maintain your personal relationships, have open and honest conversations with your potential investors. This creates clear lines of communication and roles for everyone involved, while also giving you access to the capital you need.

21. Crowdfunding

GoFundMe has documented 21 different crowdfunding websites depending on your goal and need. Even your customer base can be part of this growth and pool their resources to help you achieve your goals.

Using these strategies seizes every opportunity, improves the return on your investment, and allows you to self-fund your initiatives.

Related topics: The pros and cons of asset-based loans

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