In this post we’ll share the top things you’ll need to consider before investing your own money or taking out funds to grow your business.
What will you use the money for?
Before you invest more money into your business it’s important to ask yourself what you will use it for.
When you originally opened your business you likely put together a detailed business plan. Before you seek out financing or put your own savings towards the business, you should write out a detailed plan and list out exactly how the money will be used.
Consider whether you are throwing money at a failing part of the business, or if you are truly investing in your growth.
It’s often ill-advised to invest more money into something that isn’t working.
Here are a few wise ways to invest in the growth of your business:
- Purchase new inventory
- Buy out investors
- Improve cash flow
- Add a new location
- Pay off a cash advance
- Invest in an expansion or renovation project
Check out the success stories of some of our clients who have used financing to make their businesses more profitable.
How soon will you see a return on your investment?
While writing out your plan of action for your investment, calculate the estimated time it will take to see a return.
If you’ll be taking out working capital or line of credit to pay for the growth of your business, you’ll need to know that the company will make enough to pay back what you owe on time.
If you’re using your own money for the investment you may not need to pay back the money by a set deadline, but you’ll still want to ensure your money was spent wisely by tracking profitability.
Can you improve your business without additional investment?
If you determine that producing a return on investment in a timely manner will be difficult, consider other ways that you might grow your business without a lot of additional funding.
For example, if you were planning to invest in expensive television commercials, consider whether a low-cost social media campaign might be able to help boost your sales without the big investment in video production.
If you were planning to invest in a new location, consider whether a pop-up shop or a rented food truck might be a more profitable, low-cost option.
There are always ways you can grow your company without investing major dollars, you might just have to get creative!
If you’re sure that investing in your business is the right option, contact us today to speak with a rep about how we can help with your growth!