Since the economic recession, businesses have had to be agile and creative to survive the highly competitive environments present in many sectors. Now, after obtaining the necessary financing, small business owners must create unique and flexible initiatives to fuel further success and growth in the future.
To begin, the financing portion of the venture has become a much smoother process in recent months, as small business loan volumes have increased substantially, supporting entrepreneurs who want to either begin a new business or expand on an existing one. Much of this support has come from the federal government, as well as banking initiatives to keep standards manageable.
Also, with a firm like BoeFly that helps create an efficient loan application process, small business owners can have more time to spend on company oversight and management. BoeFly is a unique firm that uses advanced algorithms to match borrowers with the best suited lenders according to the entrepreneur's needs. With thousands of lenders participating in the process, new owners can get desirable results with just one loan application.
Anne Field, writing for The New York Times, recently explained some of the best strategies to push when formulating a business plan. When beginning the process, she recommends looking at markets that have not reached maturity yet, as entry into a new market can drive revenues and lead to expansion options.
Field used the example of a jewelry manufacturer who decided to expand his business overseas, which led to major increases in revenue. Additionally, the Small Business Administration offers the 7(a) loan program, which can be used to expand businesses. The potential uses of this program include real estate and machinery purchases, as well as working capital.
Thus far this fiscal year, close to 33,000 7(a) loans have been distributed and, interestingly enough, close to 23,000 of these were distributed to existing firms, while the remaining balance was given to startup businesses, according to SBA data. A correlation between this distribution and small business hiring is evident in analysis of employment across the nation over the past quarter.
The Small Business Quarterly Bulletin from the SBA cited that small firms accounted for three-quarters of all employment in the first quarter of fiscal year 2012. Expansion of business in several sectors has been strong, making Field's advice all the more pertinent going into remaining months of this year.
Field also recommended focusing on profits, especially regarding the success of failure or existing practices, assets and digital tools. As an illustration, Field cites a Palo Alto, California-based business that, through analysis of its own profits and those of other companies in its industry, decided to change gears and update technology.
This brought the company from being nearly bankrupt between 2008 and 2009, to seeing clear success by the beginning of 2010. This project did necessitate substantial funding – up to $9 million – to accomplish, especially to update the company's systems and technology.
Luckily, small business lending has been on a consistent upward trend in recent quarters. Earlier this month, the Thomson Reuters/PayNet Small Business Lending Index revealed a month-to-month increase of 12 percent in volumes, while the total on the index was the highest it had been in nearly six months.
Further, the SBA's Quarterly Lending Bulletin showed high demand for commercial and industrial loans, causing most financial institutions to ease lending standards to meet the applications. With commercial real estate rates at historic lows and lending standards eased, small business owners have a heightened ability to expand operations and fuel revenue growth.