Even a small business can thrive on a small amount of money. While it’s always nice to have lots of funds earmarked for growth, there are strategic ways you can use the money you have. Here are 7 ideas you can easily implement to strengthen your business.
1. Put Your Money Toward Current Assets
Current assets are those that you expect to liquidate within one year. Current assets include inventory, accounts receivable, and cash on hand. Fixed assets have a longer life than one year and are usually equipment, machinery, office furniture, electronics, vehicles and other large, expensive assets. Current assets are important because they pay for operational expenses and other short-term financial obligations.
For an in-depth look at managing assets during various stages of growth, read Managing Asset Growth in Small Business Firms from the Balance Small Business blog.
2. Push for More Sales
This one seems like a no-brainer, but busy entrepreneurs caught up in the day-to-day might not be putting as much energy towards sales as needed. There are several ways you can boost sales that include special promotions, bundling products, social media outreach and more. Review this post on the SmartBiz Blog for more sales strategies: 10 Tips and Tricks To Increase Sales For Your Small Business.
3. Spend Money Where You Can Get Return
“You need to spend money to make money” is one of the most common pieces of business advice. Increasing inventory, launching low-cost marketing efforts, or nurturing sales leads are a few ways you can get a solid ROI. Additionally, there are tax benefits when you put money back into your business. Money you reinvest is considered a business expense and you won’t have to pay income taxes on it. Business expenses can include things like advertising or purchasing long-term assets like computers and vehicles.
Check with a tax professional to discuss your business expense strategy so you won’t face any surprises at tax time.
4. Master Financial Tools
Here’s another way where spending money can help you make money. Your business should run like a well-oiled machine. Clunky and outdated processes can be a time suck and keep you from focusing on sales. Budgeting software, payroll management systems, inventory management and expense tracking are just a few tools that can streamline your business operations. The SmartBiz Blog has a few articles to help you choose the best tools for your business:
5. Test Before Launching Something New
In order to give a new sales strategy, product or service the best chance, accurately test the market and plan accordingly. Hiring a consultant or marketing strategist can be cost prohibitive when trying to run your business lean and mean. There are some low-cost ways to test the waters before you put money behind a product or approach. Ask friends and family, dig in to research your competition or poll your current customers.
6. Partner with Another Company
Networking with other business owners can offer big benefits:
- Saving money on shared expenses like marketing or advertising
- Expanding your customer base
- Utilizing business expertise
- Having a trusted advisor
For example, a catering company could partner with a florist to work on events together and cross promote each other’s services. Check out Ways Your Small Business Can Work With Other Small Businesses and Cross Promotion Ideas for Success.
7. Use Free Ways to Market Your Business
In this digital world, there are lots of platforms that are low-cost or free to help you get your name out there. A cheap and easy way to advertise and connect with consumers is to claim your page on review sites like Yelp. Once you claim your page, you can put up contact information, tout your products or services and interact with current and potential customers. Social media is a must and platforms like Twitter, Facebook and Instagram can elevate your brand online.
Once you’ve established your account, post relevant content, engage with your audience and advertise special deals. Put a little bit of money behind your posts to target a specific audience. You can also use social media sign up customers for a newsletter or blog and running contests is a snap. Another free way to get your name out is to give back. Consider volunteering in your community – wearing a branded shirt or hat, of course. You can also collect items or money for a charity in need.
8. Get a Small Business Loan
Taking on debt may seem like a bad idea if you’re trying to operate on a shoestring budget. However, an infusion of low-cost funds can actually help your business save money. If you have outstanding expensive debt from a high cost loan or on credit cards, you can use low-cost funds to refinance that debt, decreasing monthly expenses and increasing cash flow. Purchasing inventory in bulk is another way to save money.
For real-world examples from entrepreneurs using low-cost funds to save money, read Determining Use of Proceeds from SmartBiz University, educational articles about the ABCs of small business funding.
SBA loans are generally known as the “gold standard” in small business loans because of low rates and long terms. If you have good credit and have been in operation 2+ years, visit the SmartBiz Loans website to see if you prequalify for an SBA loan through a bank partner. It takes only minutes with no impact on your credit score.* Learn more about SBA loans here.
* SmartBiz reviews a soft-pull of your credit which does not impact your credit score. When your application proceeds to funding and is matched with a lender who is highly likely to fund your loan, a hard-pull of your credit is requested and appears as an inquiry on your credit report.