10 Tips for Finding and Using Capital Resources to Grow Your Business

Capital resources examples: You’ve spent years developing your business and are now ready to take the next step. You want to grow your company, invest in new equipment, or expand into new markets. But you don’t have enough cash to make these things happen. You need capital. Fortunately, there are a variety of ways small businesses can access the capital they need to grow their operations and achieve their business growth goals.
These capital resources come in many forms. They can be broken down into three broad categories: equity partners, debt financing, and other non-cash resources like services and inventory financing. Here’s a look at each of these options in more detail with tips for finding the right ones for your business.

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10 Tips for Finding and Using Capital Resources to Grow Your Business

Capital resources examples: Growing a business is never easy. Even established companies continue to face challenges and find new ways to grow. Growth usually comes at a cost, however, especially if you want to keep your business operating independently rather than selling it or merging with another company. Growing any business requires capital – money you can use to invest in the future of your company and help it expand. While many entrepreneurs think of venture capitalists as the only source of capital for growing businesses, there are many more options available that are less risky and more accessible for small businesses. Here are 10 tips for finding and using capital resources to grow your business.

Ask your customers what they want

Capital resources examples: Customers are often the best source of ideas for growth. If you’ve been serving the same set of customers for years and they show no signs of wanting or needing more services or products, it might be time to explore new markets with new customers who do need what you can provide. This can be a great way to grow without needing to put your company’s own capital at risk. If you don’t know who your customers are, then you have a few options. You can interview customers at trade shows, visit them at their homes or offices, focus groups, or even use online surveys where you can gather feedback from anyone willing to complete the survey.

Get to know your options

Capital resources examples: When you have a good idea of what you need, it’s time to think about where you can get it. There are a wide variety of options, from equity financing to cash advances on credit cards. Do your research to see what types of capital resources are available and best for your situation. There are several sources of capital for growth, including:

Don’t rely on friends and family for capital

Capital resources examples: Business owners often turn to friends and family for capital. Friends and family may be happy to offer you cash now and again, but they won’t be happy when you try to repay them with interest. What’s more, you could put your relationships at risk if you default on the loan. Instead of borrowing from friends and family, try alternative financing options that are less risky both for the lender and the borrower.

Borrow from current employees

Capital resources examples: You can offer a bonus that is really a loan repaid with interest, or offer a low-interest line of credit to an important employee. Be careful, though, as you’ll have to report this as an employee loan on your books and may have to treat it as a liability if it isn’t repaid.

Use rewards programs and credit card cash advances

Capital resources examples: If you have a credit card, you can get cash advances against your credit line. The interest rates will be high, but you don’t have to repay the amount for some time, maybe even as long as a year. Credit card cash advances are risky and should only be used as a last resort, as they have very high-interest rates. If you have a rewards program, you can ask your credit card company if they can increase your credit line temporarily. You can then use the extra credit to get cash advances. You’ll have to pay the money back with interest, but you can take advantage of the time it takes to get the cash.

Utilize crowd-funding platforms

Capital resources examples: Crowd-funding platforms are websites that match people or organizations looking for money with people who want to invest in their growth and success. Most of these sites focus on non-equity transactions, so they’re not suitable for growing your business by giving away part of the company. Choose a site that has a track record and is well-known, and make sure you set a realistic goal that takes into account the costs of doing business. If you don’t have an existing product and brand, a website like Kickstarter may not be a good fit for you. For example, if you want to create a new product, you won’t find donors on Kickstarter who want to fund your R&D. Instead, you’ll likely find donors who want to pre-order your product.

Find the right partners for growth

Capital resources examples: Partnerships are a powerful way to grow your business. You can cross-sell products, expand into new markets, share joint costs and even have someone do the work you have no time for. There are several options for finding the right partners for your business. You can attend industry events and meet potential partners there. You can also use the internet to find partners for your business. Be sure to vet any potential partners carefully before entering into any agreements.

Be ready to sell if the time is right

If you’re running a business, you’ve probably dreamed of a day when you could sell it and walk away from the daily grind. But if you’re growing a business, you may have ruled out selling too early. Yes, it can be difficult to find a buyer and get your business ready for sale, but it’s not impossible. As long as your business is profitable and growing, you can find a buyer or maybe even consider merging with another company.

Conclusion

Capital resources examples: As you can see, growing a business is hard work, but it can also be incredibly rewarding. If you’re willing to put in the effort, you can find new ways to grow your business, even in tough or uncertain times.