Strategic growth is key to the success of your business. Building credibility in the marketplace takes a smart approach to expansion and brand reputation.
Whether you’re planning to expand into new markets, grow your sales, or upgrade your daily operations, you’ll need additional funding to see your existing business into the future.
Preparing Your Funding Request
Draw up a business case and financial statements to assure your backers that they’ll see a return on their investment.
Defend your request to lenders, crowdfunders, and investors with a short statement explaining the rationale behind the total requested sum. The funding could be used to sustain your seasonal business during slow periods, or you may want to purchase new equipment or release new products. Don’t forget to make these updates to your original business plan.
Financial history statements give you the opportunity to highlight your successes, and demonstrate growth through revenue, expense, and profit reports. Include a business credit report to show evidence of your financial responsibility as well. You can also establish how much your enterprise is worth by completing a business valuation like you’d do if you intended to sell your business. Remember that you can perform the valuation yourself, or consult with a professional business appraiser.
Finally, explain how your business will grow and develop with a business forecast. Using intuitive judgement or quantitative analysis (or both), show your estimated revenue and expenses projections and justify your calculations.
Business Funding Tip
Consider SBA financing for growth capital. Longer-term SBA loans can assist in improved cash flow as the business ramps up in its expansion.
Selecting Your Funding Source
Many of the same options for funding a new business apply when funding an existing operation. These include small business loans, credit cards, and crowdfunding. Lenders, crowdfunders, and investors can look to your established financial history as an existing business when they make their decision whether to provide you with additional capital.
You can also sell an ownership stake in your company to secure more funding, but you run the risk of diluting the possession rights of current owners. Other selling options depend on the structure of your business. For example, an LLC or partnership can take on new partners and give them a percentage of ownership in exchange for their funding contribution. Confirm you’re in line with your operating or partnership agreements, articles of organization, and your state bylaws and regulations.
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