When you’re launching a startup, you’re focused on building your brand and acquiring your first round of customers but it’s important to have an eye on the future too. By incorporating growth plans into your initial business plan, you can ensure that you’re working towards a viable route to expansion.
One of the most critical aspects of business growth is funding. After all, you can’t expand your startup if you don’t have the funds in place. To find out how you can take your business to the next level, check out these three ways to fund startup growth:
1. Reinvest Your Profits
Reinvesting profits back into the business can be a highly effective way to finance your plans for expansion. When you use profits to fund startup growth, you aren’t taking on any additional liabilities, which helps to keep future costs low.
However, it can take time to generate the amount of profit you may need to fund your expansion. If you want to launch in new markets, develop new products or appeal to a wider demographic, for example, it could be months or years before you can move forward with your plans. In the meantime, you could miss out on lucrative opportunities to grow your business.
2. Attract Investors
If you can secure an investment from an external financier, you can access the funds you need to grow your business. Although attracting investors can be difficult, it’s generally easier to secure funding for business growth than it is for a startup. This is because your business already has a stellar track record and verified financial information, which makes the proposal more attractive to potential investors.
Of course, one potential downside to this option is that you’ll need to offer prospective investors shares in your business. The exact number of shares you need to give up will depend on the level of investment required, as well as the value of your startup. However, some entrepreneurs are reluctant to give up a significant share of the equity in their business.
3. Business Loans
A business loan is a popular way to finance startup growth because it offers many advantages. Your company’s financial history will make it easier to secure commercial loans at favorable interest rates, so you can minimize the amount that needs to be paid back, for example.
Furthermore, a short-term business loan can be obtained quickly, so there’s no need to miss out on potentially profitable opportunities when they arise. In addition to this, there are a range of different types of loans to suit your needs. To learn more, take a look at AdvancePoint Capital’s short term business loan options.
Growing Your Business
Expanding a business can be a challenging process but it can also lead to increased success and higher profitability. By refining your growth strategy and choosing the right time to scale your business, however, you can ensure that your startup transforms into a thriving small business, national corporation or even a global enterprise.
