If you’re an intrepid entrepreneur who has managed to get your eCommerce business up and running, kudos to you! It’s a tough gig in this business. So, if you’ve managed to secure start-up capital, why would your business need more funding? Your business might be growing, but you might not have the funds to keep up with demand. What you need is a stopgap solution and a long-term growth strategy.
Many young businesses try to grow without drawing on external help. This approach, while admirable, can be incredibly risky and frequently leads to failure. After all, it takes a village to keep a business running successfully.
Securing business funding is one of the best things you can do to ensure your company’s long-term success. In this blog, we discuss why a business needs funding and discuss your funding options. Let’s start with the question: why does your business need funding to thrive and survive?
Five reasons why business needs funding to survive
Reason 1: Startup capital is the number one reason business needs funding!
When we talk about business funding, we automatically think of startup capital. It’s what every business needs to get off the ground. It’s also, unfortunately, often the first and last stage of many funding journeys for young businesses! But, armed with the right knowledge, your business will not only survive – it will thrive with the right funding strategies.
Your startup capital is required to fund anything you might need to actually establish your business. That might look like building a website, hiring staff, purchasing stock, or renting a location for your new business.
Reason 2: A business needs funding for purchasing power
For your business to progress from the first stage of development, you’ll need to be able to invest assets. And, your business is going to need funding to be able to do that!
The kinds of assets that you’ll want to purchase will differ according to your business model, but they tend to be relatively big assets. Think of things like specialist machinery or equipment, vehicles, or technology. Whatever your assets are, make sure that the return on investment makes sense for your business plan! If the asset is going to empower your business to triple production, then it might be worth investing in.
Reason 3: Working capital
The cost of operational expenses is frequently overlooked in the planning stages of building a business. Ensuring that you have a robust working capital fund will prepare your business to seize new opportunities as they arise. It also acts as a safety net in case funds get tight. With working capital, you can cover the day-to-day expenses of running a business until your profits can keep you afloat.
Reason 4: Growth capital
Even if your business has survived the first few stages of development, you might require funding to take it to the next level. Growth capital can allow you to take on more capacity, purchase additional assets, hire more staff, open more locations or move into larger premises. In short, growth capital will empower you to scale your business at minimal risk.
Reason 5: A business needs funding for property investment
Even though so much of eCommerce takes place online, property investment should be the ultimate goal of any SME. You don’t want to be running your business out of your garage forever, do you? Securing business funding for property investment will allow you to buy a new warehouse, establish a storefront in a strategic location, or open a new office in an ideal space.
When you own your own property, a lot of the overhead costs associated with running your business may be reduced. Plus, if you already own property, you can lease your primary location out and begin to earn passive income that you can pour back into your enterprise.
Whatever you need the funding for, you need to ensure that you start with a solid business plan and a clear outline of how you intend to use the money. Your investors are going to need assurance that there will be a profitable return on their investment and that you can commit to a payment plan that suits both parties.
Where can I find funding for my business?
There are many options out there for aspiring entrepreneurs who are seeking funding for their businesses. It can be overwhelming! You can learn more about your options by reading this blog here.
Payflex has partnered with Merchant Capital to offer merchants a simple financing service that fills the gaps in traditional funding routes. We’ve made it easy for you to secure the funding that you need at exactly the moment that you need it. Apply through the Payflex portal.