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Principles of Building Business Credit
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01/20/2021
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5 Ways to Grow a Profitable Small Business
Want to make more money for your small business—who doesn't?
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There are many ways to boost your bottom line.
From focusing on maximizing sales to minimizing costs, there are various methods you can try to find what works to fuel your growth the fastest. Depending on your strategy and goals, you’ll require different funding requirements and methods by which you can attain the capital.
Some business owners may opt for a short term business loan. Short-term business loans are a capital funding method used for a business needs like working capital, buying equipment or expanding. If you’ve been denied business loans because of your credit history and financial status, you need to know that there are ways to find funding through business loans for bad credit.
Before we jump into the logistics, let’s take a look at some of the most common ways by which small businesses can transform into profitable powerhouses.
5 Tips to Grow Your Small Business
- Retain existing customers: You’ve probably heard this one before, but it costs 5x more to attain a new customer than retain an existing customer. That’s why it’s so important and vital to your business’ growth to take care of the customers who already support you. In action, this means that you will want to invest marketing dollars and strategy toward engaging with customers who have already purchased from you. Whether this is by sending emails about new products or updates, offering incentives and promotions, giving them gifts, building a rewards program or asking for feedback, you can leverage a variety of methods to help satisfy current customers.
- Cash flow is king: While funding methods are helpful, you will still be paying a price of carrying interest. One of the best ways to reduce your interest, or the cost of money you borrow, is to borrow less. But, to do so, you’ll have to have a strong cash flow. Some ways to increase cash flow are: set up retainers, shorten your payment terms, or expand payment options to ACH or mobile payments to get paid more quickly.
- Create a referral process: Happy customers like to spread the good news about your business. When you are able to satisfy your customers, then they will tell their friends about the good experience. In fact, 83% of people trust recommendations that come from those they know. One of easiest ways to get people to want to refer others to your business is with an incentive or reward for doing so.
- Trust your timing: As you grow your business, you’ll need to hire employees. For every employee, there is a cost greater than just their salary to onboard them and bring them up to speed. That’s why it’s crucial that you trust your timing of when you hire new employees. The upfront cost will need to be made possible with either increased production/sales or business funding, like a short-term business loan.
- Optimize operating procedures: The ultimate road to efficiency is paved by lowering expenses and boosting profits. One way to increase profits is to try cross-selling and upselling products. At the same time, you should look to reduce expenses by investing in automation tools, clearly outlining processes for efficiency, and consider using part-time contractors over full-time employees until your finances are in good standing.
Have Bad Credit? Business Funding Options Still Exist
Options for business funding are plenty. If you have bad credit, then you may need to consider business loans for bad credit or short term business loans.
- Alternative lenders: Traditional lenders are institutions like banks. Many small businesses, especially those with bad credits, will be denied loans from banks. One of the next places they can look for financing is to alternative lenders. Alternative lenders have less strict requirements for loan approvals as compared to banks. They generally work by reviewing an application, approving it and supplying funding shortly thereafter. When banks dole out loans, they often ask for collateral in exchange to secure that even if they are not paid back in cash, they will be able to access assets, like real estate or equipment. Alternative lenders often disregard collateral and base their lending decision on the business’ creditworthiness.
- Co-signer: A co-signer is another party that accepts partial financial responsibility for any contracts signed. You can increase the odds of receiving a business loan with bad credit when you have the aid of a co-signer.
- Credit unions: Credit unions are not-for-profit organizations that look for ways to help their community prosper. That’s why they are likely to provide small loans to local businesses.
- Merchant cash advance: At Uplyft Capital, our mission is to provide small business owners with bad credit a clear and simple way to receive quick business funding. By filling out an application with some background information and telling us about your needs, you can be approved in the same day for capital financing. In exchange, you’ll pay back the capital over time through a portion of credit card sales. The amount you pay back can be proportional to you credit card sales, which will protect you in the event of a slow month of sales.
Final Thoughts
Growing a profitable small business won’t happen overnight. It’s useful to conduct research in your respective industry to figure out customer demand. Based on needs and funding options, you can outline a plan to run your business efficiently. This way, you can satisfy customers while maximizing profits and minimizing your costs.
The aforementioned strategies are just a few ways that small businesses can boost their bottom line. It could require a short-term business loan, an alternative funding method, or finding business loans for bad credit to make your dreams a reality.
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