Achieving growth, especially fast growth, remains one of the most difficult achievements for small businesses. What are the secrets for achieving growth and how can unsecured business loans help expand your business?
STEP 1: Realising You Can’t Always Do It On Your Own
When you can afford to take on new team members, do so. They can take on responsibility and allow you to develop other areas. But only do so when you can afford to.
Hiring the right kind of people is critical. You need a team around you, but then you also need to able to delegate responsibly. If you are taking phone calls, making the product and then cleaning the floors, it can be difficult to plan ahead for the next 3-5 years.
When your small business is ready to grow, the right players at your table need to be:
- Able to roll up their sleeves.
- Won’t resort to “That’s not my job” when times are tough
- Are dedicated to the company’s goals.
Hiring the best people is one way to ensure your targets are achievable. Once you have other people within the business, you need to communicate your enthusiasm for it. Managing and delegating can be tiring, but it can be tiring for others too, make sure they take your commitment, drive and enthusiasm before the grind, the wear and the tear!
STEP 2: Scaling Growth
Having a scalable sales model helps you when it comes time to grow. Whenever you start your business, are you thinking about the repeatable processes you can take when you have five outlets, or ten, or are making one hundred thousand units instead of one hundred?
Having a repeatable sales model can help to scale your business to the next level where your profits increase over time, allowing greater revenue but not being subject to huge cost increases.
- Linear growth – making additional purchases/hires in order for sales to increase
- Exponential growth – sales increase while costs stabilise or remain, allowing for greater profits over time.
Investors always look at the scalability of a business to determine whether or not to invest in them. And that means examining the validity of the business plan and the financial model.
If your business is the product of a particular skill you, as the business owner, have then scalability will be less possible. However, if that skill can be taught or transferred then your scalability is increased.
Examples of highly scaleable businesses are:
- Software and tech
- E-commerce
- Large-scale produced items
- Franchising.
STEP 3: Reducing Risk
Growing your business and taking risks are often two fruits of the same tree. While it is impossible to keep control of everything, there are still ways in which you can limit the threat that comes with growth.
A big part of this is identifying what are internal risks and what are external risks and mitigating them both. For example small businesses are prone to internal threats such as:
- Employee theft
- Disclosure of company/client records
- Cybercrime
- Leaked product data.
Ensuring that you are covered by your insurance can certainly limit your losses in such instances but far more important is ensuring that your security – and especially your cyber security – is up to date and comprehensive.
External factors that can affect any business include:
- Economic factors
- Natural disasters
- Political factors.
Obviously, external risks cannot always be predicted, although if your business relies on buying goods from abroad, then economic considerations and planning for fluctuating currency exchanges (even more important during the exit from the EU) ought to be planned and considered.
STEP 4: Customer Experience
Focusing on your customers can often be the difference between making it and falling flat on your face. If you can start to deliver quality to your customers they will respond by talking about you; either through social media; or through their networks. Keeping happy customers means they will keep returning and become valuable advocates.
If you are an SME then this is a growth strategy that you cannot afford to ignore. You are more agile than larger companies, so you can actively anticipate and react to your customer’s needs.
If this means developing better, or innovative, products to market, then do so, because this is a competitive advantage over bigger, slower-moving organisations.
Being agile also means becoming a lot more personal with your customers, involving more opportunities to provide them with a personalised service that you can both engage in and strengthen.
STEP 5: Invest
All of the above growth strategies require investment to achieve their full potential. Whatever your financial position, you will benefit from some sort of investment. Your business can always accomplish more if boosted by £35,000 worth of unsecured business loans.
- Open a new branch
- Staff training
- Developing/testing new product
- Refurbishment
- New technology
- Marketing
- Additional staff
- Specialist machinery
- Re-branding.
STEP 6: Unsecured Business Loans
In order to get a secured loan you need to have assets, but if you don’t have any then you need an unsecured business loan.
Unsecured loans allow you to invest in your business without having to give up any security or assets. They can often be much quicker to set up than secured loans and provide essential cash boost to your business. So it makes sense that, in order to quickly grow your small business, seeking out unsecured business loans would be the more prudent choice.
Increasingly, more companies are based on digital and technical assets, not bricks and mortar. There are more software start-ups than from any other industry, so it makes sense to offer more financial products aimed at helping this type of business.
Which is where alternative finance and the increased popularity of unsecured business loans kicks in. Sums of over £150,00 can be arranged in the same way as a loan of £15,000 because there is no need for lengthy security checks and the underwriting for alternative lenders is more tangible and less cumbersome than high street lenders.
Key points to consider with unsecured business loans are:
- Agreed quickly
- No assets needed
- No or low arrangement fees
- Higher interest rates
- Shorter terms
- Personal guarantees may be required.
Just Like Your Company: Debt Can Grow
Growing your small business quickly is usually a good thing, but there are negatives too. Cash-flow problems can arise from hiring too many new staff before your company can earn enough to support them, or by taking on too much debt too early to fuel growth.
Rapid growth – To grow quickly means adding additional debt to your bottom line but is often the only way to match demand for your product or service. Taking on more debt than you can handle can lead to an equally rapid end.
Growth model – Whilst borrowing is often a necessity, poor or inaccurate growth models can lead to over-borrowing, an assumption that can become a risky gamble. Monitoring and being prepared to amend future projections can help alleviate risk.
Scalability – Depending on your business model, you may find that your business just doesn’t have the scalability you thought it did. At some point customer growth slows down and competing products saturate the market. If you cannot change or update your product, then ploughing more money into growth projects won’t reap any further rewards and can end up costing more money than you make. Will your product take over the world, or are you happy to consolidate and strengthen your existing market?
Cash-flow – Cash is the lifeblood of your business and as you grow you’ll see your debtors’ cash receivables due in grow and it is easy to mistake this for actual growth. However the more business you do, the more cash you are owed and the more you have to spend in order to do it. This disparity can be ambiguous; on the one hand business is booming, on the other it becomes increasingly more difficult to access the cash to pay for materials and purchases as your debtor account rises. Your number one priority needs to be getting cash-owed in, quickly.
The bottom line here is the notion of sustainability, which considers how your growth model and scalability dictates both rapid growth, success of that growth and ultimately how it can adversely affect your cash-flow.
An Alternative Lender That Can Help Your Business Grow
If you are looking to grow your business quickly, then you will need attract investment somewhere along the line. It might be at the beginning of your enterprise, to overcome a bump in the road, or to facilitate the next stage of your business.
At this point you need to consider what type of investment is best for your business. With a good business plan and a forward-thinking business strategy using unsecured business loans can be the ideal product for your business.
Access Finance offer a range of unsecured business loans to help give your business the help it needs. Loans are offered with low rates, no hidden fees, come from approved alternative lenders and can be used for any purpose. Talk to us today.
