It can take a lot of initial investment and some added blood, sweat, and tears to get a small business into the “success” territory. But once you’ve built the momentum to get it there, it’s time to keep it growing!
When you’re no longer struggling to keep your books above water, you can start looking into the future. How can you invest in growth opportunities for your business to become even more successful than it is now?
You don’t need to take out a hefty loan or put yourself in dangerous financial waters again. Instead, you should take some gradual measures while you enjoy the stable finances you worked so hard to get to.
These three simple tips will show you how to invest in growth opportunities as a small business to build an even better economic future!
1. Address Your Overhead
Before you put any money into growing your business, invest some time into seeing how efficiently your processes are running.
The ultimate end goal of every business is to increase the bottom line. One of the ways to get there is to streamline your efficiency.
It doesn’t matter how many sales you can make if your costs aren’t manageable. You’ll be putting all your profit back into running the business instead of growing it.
Use your accounts receivable programs and other financial software tools to check your cash flow margin and net profit. Look for patterns in sales in the past to prepare for lulls and busy seasons.
You can also increase efficiency by negotiating better deals with suppliers now that you’ve built good credit with them. If it costs you money up front to make certain products or services available, consider eliminating any that haven’t been making you a profit.
2. Check Out the Current and Future Market Forecast
When you first started your business, you targeted a certain demographic based on the market and demand at the time. Since then, the economy has likely changed.
Now, you may have an entirely new demographic of customers interested in your product or service. What other groups would benefit from what you offer? How can you target them with your marketing in ways you haven’t been already?
This simple switch in your focus can expand your business significantly! Don’t forget to keep up with your tried-and-true market and previous clients. But as the economy adapts, you might find a whole new purpose for what you offer. And that new purpose may bring in an entirely new target market!
3. Adjust Your Payment Terms
As a small business just starting out, you had to be cautious about your payment terms. But you also had to take what you could get when it came to paying clients.
Now that you have stability under your belt, it’s time to check out those accounts receivables. Just how far behind are your invoices, anyway, and how can you clean them up?
Adjusting your payment collection system frees up more cash flow to help your business grow. There are a few ways you can take care of the old invoices that are collecting dust and eliminate those problems in the future, such as:
- Adding a late fee penalty into your contract for new clients and sending out those terms to current customers
- Reducing credit caps for new clients or those with poor payment history and offering them the chance to earn increases
- Hiring a collections agency to go after an old debt. Let your current clients know that this is a new process for your business. People are more likely to pay off debt if they know it could count against them in their credit scores.
- Working with an accelerated invoicing company to get your invoices paid faster. You get the working capital you need to grow your business without taking out a loan.
With these little tweaks in your collections processes, your accounts receivable will become cleaner. This will increase your regular cash flow and give you the money you need to expand your business.
Growing your business requires working capital and expanding your market reach. To do this, you need to capitalize on the stability you’ve worked hard for instead of putting yourself into debt through loans.
These three tips will help you gradually build your business. By getting the capital you need to invest in growth opportunities, you’ll be prepared to increase your reach the smart way.