Startups and small-scale businesses face an uphill task in their bid to grow. With advances in technology, the business landscape has become more competitive than ever before, with barriers to entry now fewer and lower.
Therefore, optimizing your small business for growth can prove to be a lot more tasking than most businesses would expect. So what are some of the things that a small business owner can do to optimize the business for exponential growth?
Leveraging Fintech for Financing
Funding is a crucial element of entrepreneurship and when it comes to business growth, it is important to identify the best source of financing depending on the cost of capital and the financier’s requirements. While some financing options might be cheaper than others, some like venture capital can include very damning clauses that are enough to put off any small business looking for funding.
However, over the last few years crowdsourced financing options have become a useful resource and continue to penetrate the business environment by financing disruptive products and helping small businesses grow organically.
One of the most popular crowdfunding platforms for startups is U.S.-based Crowdfunder, which boasts an average deal size of $1.8 million. It is host to more than 36,000 companies and has over 130,000 entrepreneurs and investors signed up. And with a few dozens more crowdfunding platforms spread all over the globe, this shows that startups and small businesses seeking capital to finance growth won’t have a hard time finding a feasible source.
However, it is also important that businesses owners identify the crowdfunding platform that suits their business model. Kickstarter, for example, is synonymous with innovative brands and startups focusing on creative works, while Indiegogo is one of the most flexible platforms—it allows startups to buy funded products from the platform’s expansive marketplace.
Another option that startups can opt for is peer-to-peer lending. Sometimes, seeking finances from a bank to fund a new business can be difficult. Therefore, small businesses looking to mix debt with equity for startup capital could find peer-2-peer lending platforms like LendingClub (LC) very useful.
Leveraging Shared Office spaces
While the internet has created a marketplace where businesses can run without the need for a physical office, some businesses still need to have warehouses and stores to hold inventory, while a physical location is still a requirement to hold a business bank account.
When expanding to new territories, businesses might also be required to set up branch offices in order to establish a physical address in those locations. Depending on the location, this can cost a lot of money.
However, new office management concepts have emerged that now make it easier and more cost effective to set up an office. Shared office space and coworking spaces can be utilized to cut down on expansion costs. Furthermore, most shared workspace managers provide several add-on services to make the transition smooth and quick.
Don’t Ignore Opportunities to cut Taxes
Taxation can be both beneficial and harmful to a business entity. It all depends on how effectively a business implements deductibles on its income statement. While deducting expenses from your tax burden is a straightforward practice, most businesses miss out on some of the most effective ways to save on taxes through ignorance or lack of know-how. For instance, some businesses might not consider contributing to a retirement scheme on behalf of their employees in a bid to saving on expenses. However, this results in them missing out on a potential tax benefit. Unless a business utilizes this option to enhance tax savings, then it is correct to infer that it’s probably not maxing out its tax benefits.
Another concept that businesses should adopt is the use of tools that can simplify their tax filing system. For instance, 1tapreceipts offers an app that captures, stores, and organizes all your receipts in one place. Businesses can import receipts from photos as well as forward email invoices from the inbox. This app can easily be linked with most tax filing software, thus making the whole process quick and effortless.
At the end of the day, some of the money that your business makes will end up in a bank account. And while some banks promise good interest on fixed deposit accounts. What some of them don’t reveal to their customers is the level of charges that those accounts are likely to attract.
And as this post published on U.K.’s Small Business magazine points out, some bank charges can pile up to unexpected levels if not tracked well, depending on the size of the bank account. The publisher correctly points out the need for small businesses to try charge-free banking, which is very common at the individual account level.
That does not mean that small businesses cannot access similar services. Due to rivalry in the industry, finding a no fee bank with flexible banking conditions for both individual and business accounts is not as difficult as it was a few years ago. This is especially because of a rise in online banking service providers, crowdsourced funding platforms, and peer-to-peer credit platforms like LendingClub as mentioned earlier, which are giving mainstream financial institutions a run for their money.
Therefore, startups and small businesses seeking to optimize growth might consider using charge-free banking, which can result in significant cost cuts depending on the size of the account.
Leveraging Innovation in Personnel Acquisition
Staffing is one of the most important departments in an organization. Any business that gets this wrong is likely to struggle for success. Therefore, companies tend to invest a lot of time and money to hire the right personnel for the job.
In fact, reports indicate that hiring one person can cost businesses north of $4,000 and up to 23 working days. This can be a lot of money for small businesses given the tight budgets that most operate on.
Therefore, startups and small businesses looking for optimal growth should try to seek the services of talent acquisition firms. Microsoft’s (MSFT) LinkedIn (LNKD) is perhaps one of the most popular players in this industry, but the likes of Kforce (KFRC), ManpowerGroup (MAN), and Robert Half International (RHI) also provide top recruitment and training services that some businesses could find feasible for their staffing duties.
There is also an emerging trend where small businesses and startups are recruiting via freelance employment platforms. This can help those working on tight budgets to hire some of the best talents in the market at friendly rates.
In summary, there is a common goal for those who call themselves entrepreneurs. Whether it be local, national, or global, they are all trying to angle for some form of growth. At times, achieving targeted growth levels can come at unexpected costs, which often leads to premature closure of startups and small businesses. Nonetheless, the few points discussed here can help businesses to optimize growth properly.