5 Reasons Your Business Might Need Finance Right Now.
Yes, there is a Global Pandemic and yes, we could be heading towards a global recession. But now might also be the perfect opportunity to either start a new business or expand an existing one. If so, you might need finance.
Here are 5 reasons why you might need business finance.
1 – To start a new business
In 2020 according to data from 18 December 2020, Office of National Statistics, Companies House (www.bbc.co.uk/news/business-55405289) the number of new companies registered compared to those registered in 2019, rose from 11, 503 to 13, 257.
Whilst many of these new businesses were started as a reaction to the national pandemic, not all of there were out of necessity.
Lockdown gave people on furlough an opportunity to take a break, focus on their long-term goals and explore new business ideas that up until then may have seemed like a pipe dream.
2 – To hire new people and invest in training
In the current economic climate it might seem counterintuitive to think about hiring new people, but at the moment many good people have been let go or are on furlough.
So wouldn’t this be a good time not only to strengthen your team but hire some great people.
Lockdown has taught us that we don’t need to live in the area where we work – you now have a much wider pool of applicants who could be the perfect fit for your business now that location may not be such a big factor.
3 -To run a marketing campaign
Again, like hiring new people or investing in training, it probably sounds strange to consider advertising or running a marketing campaign. Wouldn’t businesses be better holding on to the cash they’ve got? The first thing that is cut after people and premises is often advertising and marketing. But as Henry Ford once said, “Stopping advertising to save money is like stopping your watch to save time”.
Whilst many others are cutting back, now might be a great time to up your marketing activity.
4 – To launch new products or services
Is it better to ‘stick to what you know?’ Many businesses over the last year have had to ‘pivot’ either by offering a new product or service or offering it in a new way.
There have been many stories recently where, due to the pandemic, businesses have had great success offering their products or services in a different way.
Great success stories include:
- LiveToYourLivingRoom (https://livetoyourlivingroom.com) offers virtual gigs for bands who normally played small venues but who now attract 100 – 150 people per virtual event. Why miss out on live music gigs when you can now attend from the comfort of your own home.
- Edinburgh Booze Delivery owned by Iain McPherson who at the start of lockdown went from running 3 cocktail bars to working with local bars, breweries, and distilleries to create a ‘one stop’ shop for customers to order drinks online. By collaborating with other suppliers and partners it has increased the choice available for customers.
- Personal trainers (think Joe Wicks) who always thought they needed a gym to meet their clients face-to-face and now many have pivoted by offering video sessions online.
5 – To cover a working capital shortfall
Right now, there has perhaps never been more truth in the phrase: “Turnover is vanity, profit is sanity, cash is reality”.
As business owners we need to make sure we preserve our cash. There are numerous ways to do this. Here’s a few:
- Send out invoices quicker
- Chase up unpaid invoices sooner
- Agree payment plans for unpaid invoices
- Negotiate longer payment terms with your suppliers and other creditors
Looking at the funding options to help improve your cash flow, here are some ideas:
- Negotiate an extension of your overdraft
- Arrange an unsecured business loan
- If you take payments by debit or credit card, consider merchant finance
- Would invoice finance be an option? Perhaps single invoice finance might suit your needs better. Check it out
- Asset finance – if you own assets which you paid cash for and are therefore unencumbered, you may be able to raise cash against the unencumbered asset – known as sale and leaseback. Again, find out your options.
At Funding Track, we are working with business owners who need to raise cash to help them survive the current challenges caused by the lockdown.
But, we are also helping many businesses raise the cash they need to help them thrive despite the current economic climate.
If you think your business would benefit from an injection of cash, why not get in touch on 020 3857 3030 or email us at email@example.com