Seven Valuable Ways a Business Loan Will Scale Your Revenue
Each month, more than 500,000 small businesses are started, according to the Small Business Administration as reported on Forbes.
Most of these businesses have to somehow be financed in order to get off of the ground. Of the businesses that need financing, sources include savings from the owner, loans from family or friends, commercial and small business loans through banks, or loans through alternative lenders like Kabbage.
Before signing the dotted line on your small business loan, make sure you have a detailed business plan in place so the money you are borrowing will actually help your business prosper and increase your revenue. With more than half of small businesses failing within their first year, the last thing any small business owner would want is to owe a bunch of money to the bank without a successful business to back it up.
That being said, if you do need to take out a small business loan, here are seven valuable ways it can help you scale your revenue
- You can market your business effectively. Without a budget for marketing, it’s going to be tough to bring in customers. While there are free means of advertising, such as Craigslist and social media, sometimes the best customers come from professional sources of advertising.
Top sources of advertising to focus on include Google Adwords, Facebook ads, Twitter advertising and other online marketing networks. While print and television ads are still used, they are not as effective as online advertising. If used correctly, your business loan can get you the customers you want to help you increase your profits.
- You can hire solid help. Let’s face it—it can be tough to find good work nowadays. The best workers can demand a higher salary, a bigger benefits package and more perks than someone making minimum wage.
The advantage of paying your employees more is you will attract more qualified candidates that will stick around longer and put the time and energy into your business that you need to grow and take some workload off yourself. A business loan can help get the right people in place so your business sits on a solid foundation.
- You can afford an office space. While some businesses do not need an office space immediately, others do, such as a law office, a dental practice or a local consulting firm. Your office is the first thing the customers will see.
Do you want it to be visually lacking and in a poor part of town? Most likely not, so invest in a good office building in a desirable location to attract your desired clientele.
- You can start big. Without a small business loan, you may be forced to start small. For example, you may not be able to hire any employees, you may have to work out of your home (or garage!) and you may only be able to market your business via free advertisements. With a loan, you can start your business “big” in order to produce more revenue now.
- You can afford quality equipment. Even with a loan, it’s best to shop for used equipment rather than brand new. Used equipment can save you thousands and work just as well as something new.
A business loan can help you afford quality equipment, though, not something low-grade that may break on you all the time. Without a loan, you may have to postpone purchasing equipment, which could very well slow down your sales and overall revenue.
- You can afford to take a risk. Perhaps the biggest advantage of a small business loan is that you can afford to take risks with your new venture. It’s impossible to take risks with your business if you don’t have the finances to back it up.
Perhaps an ad agency wants to market your business to a new group of people they think will have an interest in your product. It’s not a guarantee, but the biggest risks can reap the biggest rewards. Having a small business loan allows you to take risks as you see fit.
- You can increase your prices. If you invest money in your business, you can confidently raise your prices to reflect your solid staff, your high-end equipment and your marketing fees. Customers are willing to pay for quality services and products, so don’t cut yourself short if you have invested the time and money into getting your business up and running.
Keep in mind, though, that with any loan you are borrowing money and paying it back with interest. Taking out a loan for your small business is in itself a risk. With a detailed plan in place, including how you’re going to repay the loan, you can leverage the loan to your advantage and have it make you money and work to your advantage.
Donny Gamble Jr. is a published author, online entrepreneur, and founder of personalincome.org. He is a featured contributor for Huffington Post, business.com, and SmallBizTrends along with other personal finance websites.
To learn more, go to www.kabbage.com.