how to know if this is the right time to grow your small business
When speaking on small business failure and successes back in 2013, American investor and billionaire Mark Cuban pointed out that failing owners often attributed the problem of failure to a lack of or inability to get capital and additional funding despite believing that their businesses were setup for success. In other words, unsuccessful business owners commonly believed in their vision but lacked the money to make it a reality.
With statistics showing that eight in every 10 new businesses fail within the first 18 months of operations, the reality is that many small business owners simply don’t understand the business ship they’re trying to sail. Cuban disagreed with the unsuccessful small business owner’s perspective. Instead of funding, he attributes the failures to a lack of research and/or knowledge by the business owners.
It’s not easy to determine if success is in a business’s future. It’s not easy to know if now is the right time to grow your small business. However, if the following check marks can be ticked off, then it’s a good sign that success is probable and it may be time for growth.
1. Is Opportunity Knocking?
What’s the main objective of a small business loan? It’s not to create success. It’s not to create opportunity. Instead, it’s to capitalize on existing success and opportunity for even greater future success.
Any business owner seeking additional business funding must be able to recognize opportunity knocking and identify it as signs for success. Your business must already be successful and hold the qualities necessary to continue and expand those successes. Otherwise, neither you nor your creditors can be 100 percent certain that returns will be created to pay off the debts. So, opportunity is number one in knowing if your business will benefit from additional funding for growth.
2. Do You Have More Business Than Your Business Can Financially Handle?
Is your customer base larger than your business base? Are you seeing a rapid influx of social media followers, positive reviews, and finding your business at the top of results for organic search queries?
Small business loans were designed to help businesses that are too small to accommodate its rapidly expanding customer needs and demands. You’ve become the “it” source to fulfill a product or service, but you can’t keep up due to staffing, equipment, or inventory shortages. That’s a sign it’s the right time to grow your business.
While the business is already consistently turning a profit, the demand will fade and die if you don’t upgrade sufficiently to ensure the overflow not currently being attended to in a timely and efficient manner doesn’t fall into your competitor’s hands. And, the answer isn’t to raise prices or cut the costs of operations to raise the funding for growth.
Doing either of the above at this crucial time could diminish the quality of your goods, services, branding, and reputation and ultimately lose the opportunity before you ever have a chance to realize it. Small business loans are the growth ticket to help ensure a lack of resources doesn’t stall efforts to meet demand.
3. Do You Know Your Target Audience?
Do you have a specific audience? Do you know everything there is to know about that audience? Successful businesses all have one thing in common, and that is that they know their audience backwards and forwards. They know who is most likely to want what they offer, who has the buying power for what they offer, and how to make a match with that target audience.
Knowing the above gives a business the tremendous advantage of not wasting time, efforts, and funds where it will never be returned. It opens endless possibilities for lead sales. But, for it to work, you must go beyond just knowing the age, salary, gender, and other base points for the target audience. You have to know what makes them tick. What’s their opinion on the industry? What’s their interests? What’s their spending habits?
This is marketing 101, but it’s also relevant to growth. For example, let’s say you’re opening a second location. If you don’t know your local audience, you could open in a location full of potential customers that aren’t interested or empowered to buy what you’re offering. It’s a concept that applies across all fronts of any growth investment you make. Know your audience if you want your growth efforts to be embraced and pay off.
4. Is Your Appeal Beyond Your Target Demographic?
All businesses have a target demographic in which they have the greatest potential for appeal, but some businesses have more potential for mass appeal than others. It’s usually a quality, valuable good or service that’s likely to be received across the economic, physical location, and social class board.
Spreading brand awareness, however, to reach that vast demographic isn’t cheap. Businesses with such potential must grow and be able to afford to reach the masses. This may include location expansions, staffing expansions, marketing expansions, and possibly branching out to e-commerce or other sales portals. And, it all takes funding. Since such expansions may take time to pay off, look at funding programs, such as a Merchant Cash Advance, a Business Line of Credit, or Working Capital Loans, that offer more flexibility in repayment than traditional SBLs.
In closing, businesses that can check off the above marks are ready for growth and its successes. They’re have the need and existing financial standing for growth to be backed with the funding to make it happen, too.