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5SIGNS
YOUR BUSINESSNEEDS FUNDING
The daily challenges of running a business meanslonger term strategic planning such as access tosufficient financing can be overlooked. Often it is notunitl a lack of access to capital puts the brakes onyour growth does the need for capital becomeapparent. In most cases, these problems can beavoided by carefully planning to ensure adequaterequirements are met.
Here are five common situations where fast growing businessesmay need to plan for additional financing.
1 HIRING ADDITIONAL EMPLOYEESTo grow the business,
you will inevitably needto hire new employees.
The rst step should beto establish what youcan afford to pay.these new employees.
Then, you need todetermine where theadded payroll willcome from.
It may be possibleto cut budget fromother areas or topay them out ofcurrent cash flow.
2 OPENING NEW LOCATIONSIf you operate in retail, then part of your path to
growth will lie in opening up new locations foryour business.
This includes significant operation costs whichmust be incurred before the new location starts to
bring in new revenue.
Financing will usuallyneed to be in place in
order to see youthrough this period.
3 EXPANDING INVENTORYOne of the most frustrating experiences for both cusatomers
and businesses is not being able to order a product that isfeatured in a catalogue or website because it is out of stock.
Businesses in fast growingindustries often struggle to Keepadequate stock availabledue tocash constraints.
Access to capital to meetincreasing inventory requirementsis critical for sucess, especially forseasonal businesses.
4 EXPANDING SPACE
As you take on new clients andrevenue expands, your business will
require more physical space.
This may include more oce space,warehousing or factory floor space.
If it is not possible to fund this outof cash ow, then you may need to
obtain financing.
5 DIPS IN YOUR GROWTHWhile the general progression of your
business will expand, there may be troughs along the way.
You can plan or these dips byproactively obtaining adequate
financing.
Having a short term financial cushioncan help ensure that your business
survives periods of slow growth.
The growth trajectoryof a business is rarely
a straight line.
Financing constraints can give your competitors a windowof opportunity to capture market share. Plan not only foryour immediate requirements, but also longerterm strategic goals for your business.