Five Ways to Capitalize on Your Business Funding Right Now
Congratulations on receiving your business funding! Now comes the exciting part—growing your business. To ensure you spend your money wisely, it’s important to understand how to invest working capital effectively. Here are five key ways to make the most of your funding:
1. Avoid "Nice-to-Haves"
It’s tempting to spend on everything you’ve always dreamed of for your business, but it’s crucial to resist the urge to splurge on non-essential items. Revisit your original business plan and cash flow forecast to identify what’s truly necessary. Avoid unnecessary expenses like expensive printing, overpriced office space, extravagant equipment, and costly business trips or lunches. Focus on what's essential to run an effective business.
2. Spend on "Must-Haves"
Certain investments are critical for early business growth, such as hiring core staff, engaging an accountant and legal support, developing customer service, and building your brand. While you don’t need to spend extravagantly, it’s important to invest in high-quality personnel and services. A strong foundation in these areas will help your business grow from the inside out, creating the infrastructure needed for future success.
3. Evaluate Your Technology Needs
While tech upgrades can be appealing, only purchase technology that meets your current business needs. Financial responsibility in this area allows for sustainable growth. Prioritize practical operational requirements, strong security and malware protection, and tech that supports future marketing campaigns.
4. Invest in Bulk Discounts
One smart use of your funding is to negotiate bulk discounts with suppliers. This enables you to make higher returns on future sales and strengthen your bottom line. In addition, building strong relationships with suppliers through bulk orders can lead to better deals and terms in the future.
5. Identify Growth-Enhancing Activities
When assessing your business costs, distinguish between expenses that drain your resources and those that foster growth. Use your funding for activities that create opportunities, enhance your product's appeal, or improve weaker areas. For example, investing in marketing campaigns can grow your market share and move inventory, while sales training can boost your team’s skills and motivation to drive more sales.
The Bottom Line
Receiving funding is just the beginning. Where and how you invest that capital is critical to building your business. Focus on growth-enhancing activities that foster sustainable progress. If you want to learn more about how funding can help grow your small business, contact us today.
