If you’ve launched your own business and it’s already successful, you might be scoping out ways to expand and take your enterprise to the next level. Perhaps you want to move from the startup phase or turn a mid-size business into a national company? Expanding a business can enable you to drastically increase your profits, but it generally requires investment.
If you’re eager to grow your business but you don’t have the capital to finance these changes yourself, there are other options. To begin your planning your future, take a look at these three ways you can fund your business expansion now:
1. Crowdfunding
Crowdfunding is a relatively new form of financing, but it can be highly effective. You set a goal, pitch your idea and invite people to pledge money to support you. When used to fund business growth, you can reward investors in a number of ways. As well as exchanging equity for investment, you can offer early access to products, discounts on future purchases, or VIP status within your brand’s online community. Often, businesses offer a range of rewards, depending on the amount of funds pledged.
2. Business Loans
A business loan can be a straightforward and simple way to access the capital you need to fund your expansion. With short-term business loans, you can access specific types of funding, depending on your needs. If you require equipment to facilitate business growth, for example, bespoke equipment financing could be what you’re looking for. If you require a large amount of capital and want to pay it back over years, a long-term business loan could be more appropriate. With numerous financial products designed to support growing businesses, securing a business loan could be easier than you think.
3. Angel Investors
For high-net-worth individuals, investing in a growing company can be a lucrative way to increase their capital. In most cases, an angel investor will offer a specific amount of funding in exchange for a stake in your business. However, some angel investors are also well-placed to offer advice and guidance as you expand your business, so look out for opportunities to learn from your investor too.
Before seeking funding from an angel investor, it’s important to value your business accurately. This will help to gauge how much a 20, 30 or 40% stake is worth, for example, and ensure you can negotiate the deal effectively. When you’re eager to secure funding, it can be tempting to agree to a deal which gives away too much equity, so don’t risk rushing into a deal before you’ve done the math.
Preparing for Business Growth
Expanding your business is an exciting process, but it’s one which needs to be managed carefully. By analyzing all of the growth options available to you, as well as the cost implications, you can ensure that you are pursuing the most lucrative growth strategy. Similarly, examining all the funding options you could use will ensure you’re able to access the right type of financing for your business.
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