Your small business has made it past year one – Now what? Part 8: Is it time for another business loan?
So you’ve beaten the odds, and are well on your way to solidifying long-term business vitality. Or maybe you just barely eked by year one, fueled by burning the midnight oil and a smidgeon of luck. Either way, you’ve broken through one barrier and are ready to tackle the next.
But first you need to ask yourself: Do you know what your next barrier looks like? And if so, do you have the business capital you need to power through it? If the answer to the first question is yes, and your answer to the second one is no, then it’s probably time for another business loan – especially if one or more of the following questions applies to you:
Are you struggling to capitalize on new markets?
What works one day won’t always work as well the next day, which is why it’s so important for businesses to make sure they don’t begin to stagnate. That said, penetrating new markets is much easier said than done. According to Inc. contributors Karl Stark and Bill Stewart, this requires careful prioritization of the market you select as your next conquest as well as a thorough understanding of that market’s conditions. However, it also takes a very honest assessment of your “internal capabilities.”
“Much of your decision on how to enter a new market (build, buy, or partner) is driven by an internal capabilities assessment,” Stark and Stewart wrote. “How much of our core competencies can we leverage? Do we have sales channels/infrastructure/relationships in place? What time-to-market considerations exist?”
The only thing we would add to that is, how much spending power do you have at your disposal?
Have you been presented with a unique growth opportunity?
Some opportunities are just too good to pass up, but they cost more than you can afford to parcel out. In these circumstances, investing in a small business loan is essentially the equivalent of investing in your future.
It’s rare that the best road finds you, but when it does, make sure you have a full tank of gas and a set of wheels that can help you go the distance.
Are you evolving your company brand?
Shaking up your company’s image takes a significant amount of time, effort, creativity and no small amount of money. It also takes some intensely focused strategizing.
Business News Daily staff writer Brittney Helmrich interviewed several entrepreneurs to get their take on what goes into a successful rebranding, and the insights were illuminating. For one, rebranding isn’t something you should do just because you feel like your old image is stale. Sure, that might be the spark for your innovation. But what you really need is a target audience. As nice as it would be to simply run with your most creative whim, there’s no guarantee that it’ll ever make it to the bank.
Granted, really catering to that target audience means you may have to tread into uncharted territory. It could mean much more than just getting a new sign, redesigning your menu and coming up with a new motto. All of these are the specific details that should be pointing to a much greater cultural shift within your company. But sometimes the actual nuts and bolts of that shift are outside of your wheelhouse. Maybe it involves technological updates you’re not savvy to – maybe you’re upping your social media game, or you’re adopting new mobile point-of-sale technology to give your business a sleeker, more efficient veneer. Or maybe it involves an entirely new service delivery model such as ecommerce or mobile customer engagement.
Regardless of which, if any, of the above scenarios apply to you, you’re going to need help, and more specifically, a monetary infusion that can give you access to the resources and expertise you need to grow your brand.
Can you expect to see ROI?
If you’re waist deep in unpaid loans, then disregard all of the above, and accept that you might need to stabilize before wading deeper into the debt pool. A little bit of existing debt is reasonable; in fact, it’s to be expected for any growing business – but you don’t want to be drowning in it.
If that doesn’t apply to you, then the next step is to chart a clear path to return on investment. A small business loan is essentially an amorphous tool for your business. It can help server whatever function is missing from your repertoire of resources. Before you even begin looking for a lender, know with precision why you’re taking out a loan and more specifically, how it will reap ROI.
Once you’ve done this, then you’re officially ready to take out another small business loan.