Hi! Everyone,
When your business expands, one of the main challenges you face is to look for additional capital. In this situation, it is very common to inject new cash to take your business to next level of success. Alternatively, you may need additional money for survival. Whatever it is, getting new money may be very frustrating at times. Banks may turn down your business loans application for a thousand and one reasons. This may be due to inadequate assets to be used as collateral, or your company may not be in the business long enough to establish a required credit rating. This does not mean the end, so long you have a viable business, good customers, and a business plan. What you need to do is to look at other alternative options to get the funds to grow and succeed. Append below are some of the means you may consider:- |
1. IMPROVE YOUR CASH INFLOW
To unearth cash to expand your business, the first step you need to do is to shorten your cash cycle. One way is to examine your receivables. At times, by shortening your collection period, it may offer sufficient fund for your new project or expand your business. Bear in mind that too much receivables can cripple or even kill a company. To deliver good and reliable service, you need to be paid promptly as well. As such, tighten your payment policy and demand deposits or cash upfront is common and practicable. You may offer cash discount as an incentive for quick payment. To stay healthy, you need to keep track of those accounts that are past due, and diligently pursue payment after 30 days. Meet and resolve the dispute, if applicable, with your customer promptly should the need arise.
2. EXPAND THROUGH PROFITS
As your company grows, stay focus on your star products and services that have been proven to be profitable. When a particular line of products succeed, expand sales in that line rather than expanding other lines. With this in mind, it may consequently turn your operations and marketing be more cost-effective through the scale of production, thus maximizing your bottom line, so to speak.
3. ENHANCE YOUR INCOME
Here, you can do so in a number of ways. First, you may look into the means to raise your prices or increase fees if it does not cause your customers to turn to others. Alternatively, you may explore adding complementary products or services that would fit naturally into your present product mix. The main key for doing so is to broaden your scope of the business without incurring disproportionate expenses.
4. REDUCE YOUR CASH OUTFLOW
Another way you may look at is to preserve your capital by decelerating your cash outflow. Similarly, you may improve it in a number of ways. You may negotiate directly with your vendors for better payment term or sourcing for a relative cheaper alternate means. Review and enlarge your circle of vendors so as to obtain more favorable terms.
5. RATIONALISE YOUR OPERATIONS
To examine and improve each process of your business operation, with intention to improve productivity and efficiency. You may be surprised that you may save millions of dollars in term of pure wastage by way of fuel tankering concept for a fleet of vehicle the company has. At times, certain routine work or process, if shorten or reroute, may enhance productivity and time. Thus they directly contribute to your bottom line.
6. FORM A STRATEGIC PRODUCT ALLIANCE
This strategy is getting popular because of the circumstance that demand competitiveness. Therefore, it is, at times, viable to enter into a product alliance with another business partner, so as to enable you to sell to your existing customers with more competitive price. Similarly, your alliance partner is also able to pass such benefit to on to their customers as well. As a result, you are able to expand your product line without any additional costs associated with it.
In order to sustain such mutual benefits, you must ensure that both parties are end up with win-win situations.
7. STRATEGIC MARKETING ALLIANCE
A marketing alliance is a joint effort between the allied parties to build awareness of the benefits their business products and/or services. In this manner, both parties may be able to gain access to multiple and wider services and also exchange customer bases. By doing so, your market will not only increase rapidly without spending much on promotional activities, but you may also increase your revenue from sales of your own products and services to your alliance partner's customers.
8. THROUGH NON-DEBT FINANCIAL SOLUTIONS
Another source you can explore is through non-debt solutions to grow your business such as accounts receivable factoring, bankers' negotiable papers, equipment leasing or leaseback arrangement. Through factoring house, they buy over your company's accounts receivable and give you cash up front. They will collect your accounts receivable and gives you a certain percentage of their face value less a fee. If you are a retail merchant or trader, you may explore funding sources that will provide a cash advance for future credit card purchases.
9. BRANCHING OUT TO OTHER RELATED PRODUCTS AND SERVICES
This is one way to broaden your product range, without incurring much marketing costs because these are related to your existing field. This strategy will save you on marketing and operations costs. Care must be taken so as to ensure that you are not tap into entirely different market segment from your existing services. This is important so that you will not spend tons of financial resources and time marketing this new product range.
10. WORK WITH ADVISERS
It is wise to seek help or guidance from the financial and business advisers as you grow your business. Get their help to map your strategies so as to enhance your bottom line. Note that streamlining operations and increasing the effectiveness of your marketing need to be addressed constantly as your business expands.
Hope you find it helpful to you. For more details, please contact me. You may reach me at jamesoh2003@yahoo.co.uk.
James Oh
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