Are you interested in getting business loans to scale your business but have no idea how to go about the process? It can be tricky to make the most of your business loans to ensure your business grows to new heights. Most businesses only secure loans once or twice before they run out of chances to make the venture succeed. Therefore, it’s vital for companies to have a proven strategy that will help them increase their chances of success.
43% of small businesses apply for loans, so it’s a common practice. During the initial stages of a business, cash is key to scaling, and a loan might be the only route. Continue reading to learn the best tricks and tips to increase the effectiveness of your business loans to scale.
Marketing and Branding
It’s not unheard of for companies to spend half of their investment budget on marketing since it’s a powerful tool for securing more sales. You might have the best product on the market, but if nobody knows about it, then your sales will suffer.
Here are a few tips for ensuring your make the most of your business loan for marketing purposes:
- Omnichannel: make sure to take an omnichannel approach, which means that you will be using multiple channels. This increases the reach of your marketing efforts, and you also get to find the most profitable channels for your business.
- ROI: it’s important to consider the ROI of each marketing channel to find the ones that yield the best results. For example, email marketing traditionally offers some of the highest ROI out there. You need to see if that will be the case for your company.
- Marketing company: you could hire the services of a marketing company to ensure that you get professional help. They can craft winning marketing campaigns that help make the most of your business loans.
Invest in Products
For some businesses, the biggest obstacle to being able to scale is the lack of inventory. This happens when a good product is developed and released, but there aren’t enough initial funds to ensure that the shelves are fully stocked all year round.
Hence, you should consider buying as much stock as possible to meet the buying demand of your marketplace. It’s important to always be in stock since customers will go elsewhere when you aren’t. Getting customers to consistently buy from you is half the battle of dominating a marketplace.
Get a Higher Loan Amount
Increasing the size of your loan is a great way to maximize its potential to move your business forward. Let’s consider some of the top strategies for getting a higher loan amount:
- Credit: it’s important to keep your personal and business credit score high so that you can receive the highest loan possible. In some cases, you might discover that the size of your loan is in proportion to your credit rating. Also, you may get denied a loan altogether if your credit rating is bad.
- Business presentation: you’ll need to showcase the value and potential of your business via a presentation. This is a great way to convey why your business is worthy of the loan, and more importantly, how you will pay the lender the money back. The quality of your business presentation can be directly related to the size of the loan that you receive.
- Get some success first: to increase your chances of getting a bigger loan, you should wait until there is a track record of profitability. At the very least, increase the amount of incoming revenue as that improves the quality of the business.
Business Assets
Acquiring more business assets adds to the pool of collateral that you can offer the bank in the case of your business failing. Banks can take your collateral away from your business if you’re unable to pay back the loan.
The type of business collateral that you can acquire includes commercial real estate, equipment, vehicles, and much more. Virtually anything that has value and can be sold will be accepted by banks as collateral.
Hire More Employees
In some cases, the speed of scaling your business depends on the number of employees that you can hire. Hence, you can use business loans to scale the number of employees you hire and get more done.
This is especially true if you’re a solo entrepreneur or a small business with a limited roster. Make sure that you make each hire count. That’s because you need high-quality employees that can assist you in scaling your company quickly.
Product Development
You may need to spend your business loan money to improve the quality of your products. This can include adding new features or improving on the current functionality. You can look at customer reviews for insights into what product improvements can be made.
Once the product is developed properly, you can create a relaunch campaign with a lot of buzz around the product. Therefore, you can increase sales, and it can lead to scaling your business to new heights.
Finally, you can look at what product upgrades competitors make to get ideas for inspiration. It’s important to keep up with the marketplace to avoid getting left behind.
Final Thoughts
To conclude, using business loans to scale is a great idea that can supercharge your success, it can bypass years of slow growth and make your business go viral in the marketplace. However, it’s important to take the advice of this article into account so that you can determine the best way to scale.
Note that the specific details of scaling your business differ for each marketplace. Hence, you’ll need to figure out a unique approach. Making sure you get the fundamentals right will tilt the odds of success in your favor.
If you’re looking to scale, or even start a new business, let Business Anywhere help you get registered. We have years of experience helping entrepreneurs to grow successfully!
