Business Expansion: How To Afford It
There comes a point when every successful business owner considers taking their company to the next level. This could involve hiring new employees, upgrading technology and possibly even upsizing one’s premises in order to reach that next level of success. By expanding your business, you could increase your revenue dramatically. However, expansion also means increasing your outgoing costs. Consequently, you need to be sure that the extra earnings outweigh the extra costs. Below are just five tips on how to afford your company’s expansion.
Consider your current financial situation
First, you need to be sure that your business is truly in the right financial situation to expand. Make sure that you’ve got a healthy cash flow and that you’re definitely earning more than you’re spending. If you’ve got lots of debts, consider whether these need to be paid off or consolidated before you consider expanding (especially if you plan to take on more debts in order to expand).
Budget ahead
Next, you need to work out a) how much you need to invest up front to expand and b) how much extra you plan to spend in the long run. Compare this to your projected added revenue to determine whether an expansion is feasible. You may be able to seek the help of a financial advisor to identify future costs. Be realistic about what you need to expand and what you can do without.
Make use of loans and credit
If you don’t have the available funds to expand, you could consider borrowing them. A business loan or a line of credit could be options to consider. When borrowing money, you should always do thorough research into the interest rates. It’s worth also checking that your credit score is healthy so that you can access cheaper rates and so that you’re not rejected by lenders. Banks are likely to offer some of the best business loans. You can compare some of the best lenders here at BNAmericas.
Seek out investment
Another way of funding your expansion could be to ask investors for funding in exchange for shares in your profits. You could do this by approaching an angel investor. Alternatively, you could consider a crowdfunding campaign. You may even be able to get help from an investment bank. Make sure to do your research first in order to find the right organization or individual to seek investment from. Signs of growth – such as the fact that Everblu Capital hired two new dealers recently – can be a sign that an organization is worth approaching. Make sure that you have a good pitch planned and that you’ve got a clear business plan.
Look out for grants and incentives
It’s possible to find grants and incentives that could help fund your expansion. This could include donations from non-profit organizations or government grants. Do your research online to see what is out there. It could also be worth seeing if your local council can offer any kind of funding.
