Congratulations! It appears that your business is growing. You have positioned the business to be in a great space where you have clients and you are moving in the right direction. But you realize that you have to continue growing, so you can’t stop where you are.
Do you remember when you started out on this journey you needed adequate access to capital? This is also true during the growth phase. It is essential for any company to continue to expand and grow their existing business, so it must have capital.
The dilemma when you first started your business was what you needed as far as startup expenses. But now, you have to assess your current situation. As a business owner, it is crucial that you understand why you may need additional business funding and more importantly, when to seek it.
1.Your cash flow goes negative
You have heard it time and again that cash is king. In order to succeed as a business, you must effectively manage your cash flow. Ultimately, businesses may have to deal with negative cash flow due to poor planning. Some companies, such as those that stock up on inventory at certain times during the year, have to occasionally spend more cash than is available. Businesses that are busier at specific times of the year may also experience cash flow problems.
Whatever the reason, negative cash flow can be a cause for concern because it is an indicator used by many to determine the viability of a business. You can use business funding to assist you in properly managing your cash flow, especially during your growth periods.
2. It’s time to grow
As your business grows, you may need to think of expansion projects, such as additional locations, renovation of existing space, and advertising and marketing costs.
Seeking business financing is a wise choice to fund expansion projects because these projects can make or break your plans for growth.
3. You need a cushion
As part of your business’ planning strategies, think about cushioning for risk. Some suggest that as a business owner, you should have a cash cushion of six months’ worth of operating expenses. The cushion can help because businesses go through different cyclical changes. Cushions also help with planning for a rainy day, shopping for bargains, and growing your business.
As you continue to put cash aside to use as a cushion, you can reinvest for growth in your business. As that money grows, you can use it for other items to grow the business such as innovation, hiring new employees, and new products or services.
4. You need more workers
Hiring new employees for your business can seem daunting, but you know that you need the extra set of hands. That means you have figure out how much you can afford to pay them, and where the money will come from. While some businesses make changes in their budgets in order to hire new employees, some seek funding initially to assist with this prospect.
Businesses have chosen to fund a new hire’s payroll with business funding, so this can be option for you, as well. Hiring is especially relevant when you have come to the point in which you need additional staff for the business to continue to grow.
5. Your business must innovate
In order to stay competitive as a business owner, you have to be innovative. With today’s technology, that concept is more prevalent.
As part of your growth pattern, you may be at a point where innovation needs to take a front seat. Depending on your business, this may be in terms of research and development, technology, or the creation of new products or services.
Since you may be at the point where innovation is crucial to growth, you understand its necessity. If you have come to this point in your growth plans, then this may be a sign to seek additional funding.
Fund your business
If any of these signs apply to your business, start reviewing additional business funding options that you can use.
Some options to consider:
- Alternative small business lenders such as Kabbage
- Traditional bank loans
- Angel investors
- Lines of credit
- SBA guaranteed loans
While it seems that there is a variety of financing choices to fund your business during its growth period, research all of them. Understand that you will have to eventually pay back any loans from profits.
Then secondly, understand what type of funding is best for your business. You have to have access to the capital in order to continue grow during this exciting period in your business.
For information about Kabbage, an alternative small business lender, please visit: