Looking to Expand Your Business? Use Some Creative Financing Methods
There comes a time in every business when there is a plateau. Things are going well, but you find you need to make the next step. Your business probably started out small and you have a vision for it to grow much larger.
It is never a good idea to try to grow by using your own money. If you try to do this, then cash flow becomes an issue. In fact, once your business starts to feel the pinch from low cash flow, you could be putting your company in jeopardy.
Instead, you need to look for ways to finance your growth and spread the risk out. There are quite a few ways available to fund your next step and not put your business at risk in the process.
In this article, I will go over several ways that you can finance your business to take it to the next level.
1 – Use your assets
If you have only just started your business, and are not yet ready to expand, then this is a good time to be thinking ahead. To make sure that you can handle the expansion, then start making some income investments now.
Your business revenue should be coming in from multiple sources so you aren’t relying on just your income from whatever it is that makes your company money.
Put some of the profits into investments or even real estate so they can be bringing in even more money. Many businesses do this so that they have the money to combat any cash flow issues when they decide to expand.
2 – Try crowdfunding
Depending on the type of business you have and what kind of service or product you are selling, then you may have a shot at some crowdfunding to get your business to the next level.
For instance, if you have an idea for a new product your company could put out on the market that could solve a common problem a lot of people have then this is a good candidate for crowdfunding.
The way that it works is that you build up a prototype and then advertise how your company has created the best thing since sliced bread. People will want early access to the product when it comes out and will eagerly donate to getting the product to market. Usually an incentive is a free product or even just the early access to it can be enough.
3 – Venture funding
Very similar to crowdfunding is venture funding. Instead of asking people to pitch in to help you create or refine your product, you are asking people to simply fund your business. In return you offer a small percentage of future earnings.
This is gaining popularity among small businesses and startups and investors. You don’t have to bring your business public to be able to have people invest in you and reap the rewards later on.
One thing to note, however, is that it is in a funny grey area since it is a new concept. Make sure that if you offer this type of program that you have a lawyer help you through the legalities of it.