Many economic experts have cited small businesses as being the biggest drivers of both employment growth and industry innovation, on top of being a major contributor to overall Gross Domestic Product. This is evidenced by Small Business Administration data that shows 99.7 percent of all U.S. employer firms are small businesses, while these companies account for 13 times as many patents per employee than their larger counterparts.
Additionally, many forecasts have shown that the total volume of small business loans has trended downward through the past few quarters. Credit, according to most experts in the field, is among the most important commodities to a small business owner, especially in the startup phase.
For these reasons, government agencies, financial institutions and more have increased their support of the small business industry. Sometimes, though, the most effective guidance can be gleaned from successful small business owners who have made it through a tough economy.
The Baldwin City Signal recently reached out to small business owners who have climbed from being startups with essentially no financial backing, to bringing in impressive revenues and expanding. The news provider highlighted some of the area’s small business owners’ efforts over the last ten years, and took the advice those entrepreneurs had for those looking to launch a new venture.
To begin, several of the owners focused on how important it is to have a strong business plan, as this will be the first step to getting adequate financing. There is no specific winning formula for this, as it will vary from industry to industry, so researching the field in which the business will operate is essential.
Additionally, the idea behind the business has to be unique enough to separate the company from its competition. It’s not easy being the new kid in school, and that adage rings true in the small business industry.
When looking to get investors interested or acquire small business loans through financial institutions, all involved will want evidence – through revenue projections and the like – that your business is a viable one to fund.
Similar to building knowledge of the target industry, the Signal cites small business owners’ recommendation to truly know the brand you will be building. When you apply for loans or make a presentation to potential investors, being able to define and illustrate your brand, and why it will be successful, is essential.
Finally, the Signal notes that financial savvy is key, especially in the startup phase. One owner explained to the source that if you take out a loan, you have to do everything in your power to ensure that you will be able to pay it back within the agreed time frame.
It is likely this reason that micro loans have pulled the weight in the small business lending sector over the past two quarters. SBA data has shown increases in the disbursement of loans under $100,000 in its last two quarterly reports.
Other small business advocates suggest never underestimating the power of franchise acquisitions. While total small business loan disbursement trended downward last month, the most recent IFA/BoeFly Franchise Lending Index revealed increases of 6 percent between May and June of this year in the sector.
Additionally, becoming a franchisee provides the comfort of beginning a business with an established brand. Visibility is key for any new venture, and this gives entrepreneurs a foot in the door to the industry in which they want to operate.
For the most efficient loan application process, consider using BoeFly, which matches lenders and borrowers through its progressive portal. This firm has thousands of participating lenders, while its algorithms ensure the best match when it comes time to sign the loan agreement.