In 2020, Congress introduced the Paycheck Protection Program, which provides forgivable loans aimed to help businesses cover operating expenses and maintain payroll. Small businesses with 500 employees or less were eligible to apply, along with sole proprietorships, independent contractors and the self-employed. 

On January 11, 2021, businesses could apply for a second round of PPP funds. However, only businesses with less than 300 employees are eligible to apply. They must also prove that they’ve experienced a 25% reduction in gross receipts compared to the same period in 2019. 

A merchant cash advance, or business cash advance, is a type of business financing method that is given to businesses to increase its working capital. They tend to be used in the short-term and are a great funding method for small and medium sized businesses that are getting started. Small companies tend to face hurdles when attempting to be approved for a loan, so a merchant cash advance can serve as a saving grace. 

A merchant cash advance is typically a loan with a term that ranges between 2-24 months. The most popular term for a merchant cash advance is one year long. The financier then receives repayment for the loan by pulling payments from the business’ account through an automatic clearing house (ACH) or from the merchant account revenue.

Business credit is a measurement tool that is used to qualify businesses for financing methods. In the same way that people have credit scores, businesses too have their own credit history and credit score. Business credit bureaus like Equifax, Dun & Bradstreet and Experian keep track of a business’ debt records. 

This credit report is likely to be used by creditors, lenders, suppliers and insurance companies when they need to evaluate your creditworthiness to approve or deny applications and deals.

If your loan was denied, you’ll likely have received notice directly from the lender, rather than the SBA. It’s possible they won’t give a reason for your denial. There are some common reasons for denial, such as: a mistake in the application, your business doesn’t qualify for the loan or you have previously defaulted on a SBA loan. If you received a rejection without reason, you should try to contact the lender directly to find out why. 

1. Optimize your site: Website optimization happens in several ways. For starters, it’s been shown that over 30% of website visitors will exit your website if it doesn’t load within 3 seconds. Some estimates even peg that for every 100ms delay in a site loading, 1% of customers will drop off.  This proves how important it is to have a site that loads quickly. While there are different methods to increase site speed, one of the first things to do is to optimize site images to be small enough so they won’t delay loading the page. Beyond optimizing site speed, you’ll want to make sure that your website is responsive. This means that it can be viewed across different screen sizes, from desktops to laptops and tablets to mobile devices. You can accomplish this by testing across different device types like Android and iOs, as well as screen sizes. 
   
   
2. Boost SEO: You’ve probably heard about Search Engine Optimization (SEO) before. Most people have, but many don’t become experts in the field. That being said, it’s good to know some basics. SEO is a ranking system by which search engines like Google notice your site and return it in the results when someone performs a search. It’s based off of an evolving algorithm, which is impacted by keywords and more. To boost your SEO, you can hire SEO or content creation experts, but you can also start with small things like making sure all your website pages have a meta description. You also want to make sure that your content is of high quality and actually represents what your business provides.
    
3. Use social media: Whether you have funding or not, social media is a great way to build your brand awareness and communicate with customers. Social media also helps to add to your credibility and allows people to easily refer you to friends through word of mouth advertising and tagging your business pages. It’s recommended to remain active across social media platforms, so a good place to start is with a Facebook Business Page, Instagram Business Account and Twitter for Business.  
   
   
4. Free shipping: Free shipping falls into a choice your business can make within its pricing structure. There’s a psychological factor associated with receiving free shipping. It’s a big part of the appeal for why people are willing to pay for Amazon Prime. Even if the price is baked into the cost of the good or equal to a percentage off, more often than not, people will be more willing to buy from a business that offers free shipping. This can also play as a competitive advantage for your ecommerce site to help beat out your competition. 
   
   
5. Tailor CTAs: A CTA stands for call-to-action, and it’s a direction to a consumer to take a step or action. For example, this would be a button that reads, “Buy Now.” If you can customize your CTAs to speak directly to the person reading it, you can boost your conversion rates. While this doesn’t necessarily mean every single person receives a different CTA, it means that you can group people within categories in the sales funnel. This means that visitors, leads and customers all receive tailored messaging. 
   
   
6. Declutter site navigation: You’ll want to lead your website visitors to take the action you desire, like for them to add an item to cart. To do this, your website design plays a crucial way in the way they navigate the site. One thing to look out for is a cluttered page or navigation menu. Rather than overdoing the site navigation, be sure it’s an easy-to-use way-finding tool. This way, customers will be led to exactly where you’d like them to go. 
   
   
7. Trust data: In today’s business world, data exists at every turn. But, data is only as powerful as what you choose to do with it. Be sure to set up website analytics by using a tool like Google Analytics. You can better understand how visitors get to your site, what they do on the site, and how long they spend on each page. With this type of information, you can glean insights to make the user experience better to convert sales. 
   
   
8. Ask for feedback: One of the most important aspects of business is satisfying your customers! While every business owner knows this, they don’t all spend time listening to their customers. Solicit feedback from your customers via surveys, phone calls, emails or whatever method makes sense for your business. Many businesses will offer incentives like a discount code for their next purchase if a customer fills out a survey. This is a win-win as you boost customer retention, make a sale, and can use the feedback to make the customer experience even better for your prospective clientele. 
   
   
9. Email marketing: Email marketing can start as soon as you have a potential customer’s email, or a lead. Then, you can increase your email marketing efforts by segmenting your audience into their respective place in the sales funnel. According to Hubspot, marketers who segment their audience notice as much as a 760% increase in revenue. Part of this is playing into the tailored CTAs tip from above. You get to speak directly to your audience and offer solutions to their respective needs through segmentation. 
   
   
10. Partnerships: If you’re just getting started or rapidly growing your online presence, consider forming a partnership with a better known brand. With a partnership, you can easily expand your reach and increase brand awareness at a lower cost than other marketing efforts. Both businesses can form a symbiotic relationship. These kinds of partnerships make the most sense when your business offering complements that of another. Consider an athletic clothing company partnering with a gym or an outdoor adventure company, for example.

1. 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.
   
   
2. 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.
   
   
3. 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.
   
   
4. 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.
   
   
5. 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. 

When it comes to business, leverage can be defined as “using borrowed capital as a funding source” to expand assets. Since you’re borrowing money, or using debt, to finance assets with potential returns, it’s an investment strategy. The hope is that the benefits will eventually outweigh the costs. So, you’ll be able to pay back the debt, plus any interest, and gain profits. 

As with any type of financing, there are both upsides and downsides. The benefits of using financial leverage like a line of credit, for example, include:

• Increasing available funds 
• Boost credit 
• Improve company growth 
• Help promote potential acquisitions
• Grow profits 

If your company is considered to be “highly leveraged,” then it means that most of the capital is in the form of debt. That comes with its own sets of risks, and we will get to that shortly.

• Poor Management: No matter how many people make up your leadership team (at this stage, it could just be you), it has to be buttoned up. This means that decision-making happens in a timely manner, there’s staff to oversee processes and people, and everyone is aligned with the same vision. If you have a partner or executive leadership team, it’s vital that everyone is on the same page. Even if people do disagree with one another, your employees should only be able to witness leaders as being unified.
  • Tips for success: Meet with a mentor, conduct your own research, learn and study how to lead. You can also look to companies you admire and learn about their leadership style and company culture. Ask your team for feedback, as well. 

• Insufficient capital: A lot of new business owners are unaware about how much capital they’ll need to operate. If you underestimate your funds or misunderstand your cash flow, you may find yourself in a tight spot needing cash. Make sure you have enough cash to cover your costs until your sales will be high enough to sustain the business. 
  • Tips for success: Use a business calculator to estimate what you’ll need. Do research on the different types of business funding that is available to your business. You can leverage business loans, lines of credit or merchant cash advances, to name a few. 

• Wrong Location: Real estate’s value is based on location. This, too, stands for your business. Depending on what service and product you’re going to provide, your customer base may exist in different locations. Of course, if you can conduct your business online, then this point can be moot for some. However, many businesses have an omnichannel model – with a brick and mortar storefront and ecommerce. When you sign a real estate lease, you need to make sure that you’re choosing a location with high foot traffic and a community that wants your product/service. You should take the following into consideration when deciding where to open: your target customer, competitors’ locations, warehousing distance, local incentive programs, safety, and the overall community feel. 
  • Tips for success: Conduct market research before opening your first location. If you found an area that you think is perfect for your needs, get on the ground and see how the community reacts to you being there. This could be with a pop-up shop or sampling your product in the community. 

• Rapid growth: Going too fast can also cause failure. Many new businesses hit the ground running and see success. With the newfound success, they start to over expand and grow too fast. Some major problems can stem from over expanding. Firstly, you may not be able to fulfill customer demand. Additionally, you can over-invest in inventory and overestimate the strength of the demand. Then, if sales begin to cool, you have put a lot of your working capital into stagnant inventory. Both these situations can lead to a shut down.
  • Tips for success: Strategically plan and manage your day-to-day operations. You can find automation and management tools that help to forecast your future sales based on data. With better information, you can make smarter decisions. Keep in mind that you may need to seek more funding even if your business is profitable. 

• Marketing failures: We’ve touched on this before. You have to invest in marketing to succeed. But, this doesn’t mean throwing dollars to a marketing department with no results. Instead, it requires the adequate management of budgets and campaigns. You need to define your business goals and measures of success, or key performance indicators (KPIs). You’ll use these KPIs to track your success of each marketing initiative.
  • Tips for success: Perform research so that you can invest your marketing budget wisely. Look at criteria like prospect reach, capital needed, and conversions. Take your time so that you can apply realistic projections and targets to track. Importantly, be adaptable. If you see a campaign that isn’t performing as well as you’d hope, fail fast and pivot to try something new. 

Small business funding is the process and act of borrowing capital. Capital is provided through business loans or lines of credit from lenders so that small businesses have money to cover their needs. 

Depending on the type of business funding you select, there will be a unique process for approval. The amount of capital you can receive also varies by funding method.

Some people will consider a business a startup at the inception of the idea. Others will only see a business as a startup when funding has been established and there’s some semblance of a customer base. No matter when you define the beginning of your startup phase, you have a minimum viable product (MVP) to work with and should turn your focus to:

a. Talent: The people you hire in the beginning of your business will set the stage for the company culture. While there is a cost to bring on a new hire, it proves to be worth it when you can find the type of people who are willing to do whatever it takes to make the business successful. Some traits to look for in your first employees include: flexibility, adaptability, desire to problem-solve, a willingness to learn and take on new jobs as needed. 

b. Process establishment: The next business stage is scaling. But, before you scale, you want to have well-defined processes so that as you expand, control and quality do not fall behind. You need to make sure that processes are clear and iterative so that as the business grows, the processes will continue to work for you and not against you. 

c. Customer service: As the holy grail of most businesses, customer service should always be at the top of your mind. Invest time, money and energy into supporting your customer base, especially those who are with you from the beginning. 

d. Early adopters:  Early adopters are those who are first to use a new product or service. To attract this customer base, you have to clearly define your target audience. Rather than spreading a lot of money across a wide net to attract people, focus on your core audience and let them help you build brand awareness through word of mouth. This will help to lower your customer acquisition cost and promote brand loyalty from the get go.