It’s never easy to start a business, but it’s another challenge entirely to manage what may eventually seem like a never-ending list of expenses. On top of trying to gain a profit as soon as possible, you’ll have to worry about your daily operational expenses, how to purchase supplies, and a whole lot more from day one. It may also become apparent that you’ll need a generous cash flow to invest back into your business to develop new products, allowing it to grow and thrive further.
One viable option is for you to take out a business banking loan to give your business a significant financial boost. But having that extra money doesn’t mean you can consider your business financially sound already. Here are some tips on how business owners like you can stay financially healthy after receiving your loan:
1) Plan Your Use for Your Loan
Suddenly receiving a huge sum thanks to your loan can feel empowering for you at first, but from hereon, you should take firm initiative to exercise financial discipline. This starts with a sense of purpose for your loan.
Even before you take out the loan, come up with a clear picture of how the money will be spent. Since you probably know beforehand how much your loan amount will be, create a detailed plan of your expenditures. How much will be allocated to paying off other outstanding debts, if there are any, and how much will be invested to improve your current operations? Making clear plans ensures that the loan money will be put to good use.
2) Review Your Loan Terms Thoroughly
Taking out a loan means also taking on the responsibility of paying it off according to the terms set in the loan agreement. Failure to do so may incur additional costs, which would then just damage your business’s financial health further. After all, even the smallest additional charges due to late payments can be critical to your cash flow when they start piling up.
When it comes to taking out a loan, you probably want to look out for a program that has an easy application process and borrower-friendly fees. Fortunately, if you’re based in the Philippines, digital banks like Maya can offer you that convenience. Maya Flexi Loan, for example, provides businesses a quick way to apply for loans with terms that suit their needs. Finding the right loan provider can also be critical in ensuring that you get the amount you need and under terms that make it feasible for you to pay your loan back.
3) Shop for Better Deals from Your Suppliers
Your choice of suppliers is also crucial to the financial health of your business. If you’re stuck with a supplier who charges too high or fails to deliver in a timely manner, then your business operations—and in turn, your earnings—may be jeopardized.
Hence, despite having new capital thanks to your loan, take this as an opportunity to reevaluate your current suppliers. Your current suppliers may be offering rates that are too steep for you, which is sure to eat into your financial health in the long run. Shop around for better deals, and don’t be afraid to negotiate with current suppliers for better prices.
4) Invest Smartly
After taking out your business loan, make sure you invest part of the money into something that will profit your business. Perhaps this could be new equipment to help increase your current production, or an effort to expand your offerings. The important thing is to always evaluate if the returns are worth your investment.
One way to ensure that you’ll invest your loan money somewhere worthwhile is to do market research first. Tap into your existing customer base using your business’s social media page to ask what they’d like to see more of from you. For example, if you run a restaurant, you can put up a survey on your business’s Facebook page asking customers what they think of your current offerings and what they might want to see in the future. Check the popular responses to gauge where to invest your loan money in, knowing that there’s interest for the said idea already.
5) Improve Your Current Marketing Strategy
Being financially healthy relies on being able to fulfill a consistent stream of orders, which won’t happen if people aren’t aware of your business. So don’t forget to review your current marketing strategy and see if there’s anything you can improve upon.
This may mean being more active on your business social media accounts, considering tie-ups with online influencers to promote your product, or offering a rewards program to better incentivize customer loyalty. Drumming up interest for your business will surely bring in new customers, which will make good on your loan.
If you make the right choices, your business loan will do a lot to improve your financial health instead of putting you in a position of financial uncertainty. Look to the tips above to make the most of your loan program and strengthen your business’s financial position.
Jellybeans in the City 