Financing New Growth Opportunities
by 
Financing New Growth Opportunities
For many small businesses, to achieve growth means success. Growth sees the business with a wider customer base, and with it more influence in your industry and on your pricing. It also means increased revenues and higher profits. An increasing number of small businesses are experiencing growth in revenues and profits, with 58% reporting profits in the final quarter of 2017. This trend is expected to continue in 2018, with revenues expected to increase by 9.1%. Small businesses have opportunities to expand into a variety of business areas in 2018. There are major ideas and trends that will impact certain industries and businesses, thereby creating opportunities for entrepreneurs and small businesses.
Growth requires investment
To take advantage of these opportunities for expansion, you’ll need to invest in capabilities, including new technologies, equipment, marketing and talent. Growth also exposes you to competition, and you need to invest in adequate resources if you are to sustain it and stay in business. The challenge is, not only will you need money to pay for the cost of your existing operations, you’ll need adequate finance to pay for new assets, additional staff, new and improved websites and up to date equipment if you are to grow your business.
To invest, you need to decide on the most appropriate source of funding for your business. It should be reliable and affordable to ensure that, not only do you secure the cash, but it doesn’t create additional problems for your business. There are 2 major sources of financing you can consider. Equity financing allows you to raise the cash through investors, in exchange for a share of your business. With debt financing, you’ll borrow money from lenders and pay back with interest.
Problems with small business financing
For many small businesses, however, it is difficult to raise money to fund growth opportunities, according to a federal survey. Small businesses are often refused credit due to low credit scores or insufficient credit history, or a lack of collateral. If you are faced with such issues, you can search for and take advantage of personal loans to enable you to finance your business. The survey also revealed that due to these difficulties faced, 42% of small businesses, used personal credit instead; relying on the owner’s credit history to obtain these loans.
Growing your business presents new risks. You should therefore ensure that you make the right decision about financing the growth. You should manage your finances well, including making any debt repayments; and ensure that all business risks are well managed to ensure success in your business growth.
by