4 Ways to Strategically Use New Funding to Boost Your Small Business
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Way to go! You just got the new business funding you’ve been after! So, chances are, you're feeling like your business bank account finally has that much-needed room to breathe. But, don’t relax just yet. That deposit into your account isn’t the end of the transaction. Before you exhale, you still have to figure out the best ways to use the money.
Related: The 7 Sources of Startup Capital
And that can be a problem, because researching all the hardware and software, all the products and services you could buy to boost your business could keep you up all night. Given the countless options out there, it’s tough to know which are the smart spends that will take your business to the next level, and which are just a waste of money.
So, take the time to turn strategic here: You just might sleep better after prioritizing the investments that will best transform your newly bigger bank account into more revenue to grow and scale your business.
That’s the goal of any business loan, right? And a good way to start is by focusing on four key areas:
1. Don't give into bias -- give customers what they want.
This is the perfect time to step back and look at your offerings holistically. Great products and services are what keep customers coming back. They build loyalty and trust with your customers, so be honest with yourself. What’s not performing as well as you thought it would? Let it go. What are customers coming back for or specifically requesting? Invest in those revenue drivers. Let the numbers be your guide.
2. Beef up your technology.
This is a big one because investing in the right technology can give you critical insights about customers and prospects, help you find efficiencies and protect your business from the nightmarish hacking and data-loss disasters that can cripple any company.
Consider investing in customer relationship management (CRM) software from Nutshell, Microsoft Dynamics or Salesforce. This type of software can bring a ton of value to a business in growth mode by helping keep track of all customer interactions, purchase history and support. The sales processes, email marketing and automation a solid CRM software program provides can help ensure that your most valuable asset, the customer, is treated as a priority, while arming you with the tools to increase your sales productivity.
Because these features are available online, you can simply pay a monthly subscription fee to store and access all your data and CRM services easily and from anywhere.
Second, consider a productivity tool, like Google Apps, which will save you both time and money. It will allow you to create and share documents and spreadsheets and even to videoconference with teams.
Finally, don’t be fooled: Hackers aren’t targeting just huge enterprises. They are increasingly turning to small businesses. So, give top consideration to technology that will secure your business and customer data, such as additional firewall software, EMV chip-card readers and business identity-theft protection. Yes, businesses are just as susceptible as consumers. Criminals can use your business' identity and take out credit in its name.
3. Update your equipment.
Your biggest mistake may be waiting until a key piece of production or computing equipment breaks before you replace it. Think about all of the orders you’ll have to delay or the jobs you’ll have to turn down if your equipment isn’t working.
Investing in new equipment now will save you the headache -- and the greater expense -- associated with an emergency replacement later.
4. Pay down your debt.
If you have a bank line of credit or use a business credit card, that debt is likely to carry a higher interest rate than your new business loan. You can use part of your loan to pay down your high-interest credit balances, which will help improve your business credit scores. Building stronger business credit will let you qualify for more funding, with better interest rates, the next time you’re in need.
Being a great business owner means knowing what you don't know. If you’re not sure what to invest in, talk to others who have the insights and experience and are willing to help. Other business owners in your industry or experts in the field will understand what you're going through. Ask your staff for their opinions - they'll value your interest and your trust in them as their leader. Look to a financial planner who specializes in small business.
And enjoy the freedom your new business funding brings you.