5 Strategies to Accelerate Your Business in 2021
A business line of credit can be a valuable tool to help scale your company.
To grow your business, you need working capital — and business lines of credit are among the most popular types of funding.
With a business line of credit, you can withdraw funds as needed, up to your approved limit. You’re only charged interest on the amount you withdraw and your funding becomes available again as you make repayments.
A business line of credit can help entrepreneurs scale their companies and grow more quickly. Sarah Thompson, Zions Bank Business Banking relationship manager, shares five strategies that can help business owners maximize this funding option.
Business Line of Credit Strategy #1: Invest in the strategic direction of your business
“It’s well known that small business owners wear a lot of hats,” says Thompson. “If running the day-to-day operations of your business is keeping you busy, it can be challenging to recognize ways to help your company make a paradigm shift.”
Bringing on a consultant is a major investment but can also create a significant amount of value for your business.
“Consultants typically bring experience from a wide variety of industries and bring an objective viewpoint,” she says. “Finding the right professional could provide the quintessential ‘out of the box’ ideas to scale your business.”
Business Line of Credit Strategy #2: Hire more employees
Although employees are likely one of your largest expenses, you can’t scale your company without investing in manpower.
“Many small businesses need additional employees to meet the demands of work, but delay hiring because of budget concerns,” Thompson says. “Using a business line of credit to ramp up hiring will help you handle increased demand and take care of your customers.”
Business Line of Credit Strategy #3: Stock up on inventory
A business line of credit can help you address inventory needs — especially if your business is seasonal or you experience quick inventory turnover.
“A business line of credit helps you quickly respond to market conditions,” says Thompson. “If you need inventory before you have positive cashflow or a wholesaler is willing to give you a great deal, you can act decisively.”
Business Line of Credit Strategy #4: Step up your online marketing
Leveraging a business line of credit can help you maintain essential marketing functions and boost strategies that prove effective.
“Over the last few years, small businesses have heavily invested in their digital marketing,” said Thompson. “According to RetailDive, 87% of customers start their buying journey online. If you lack a digital footprint, you’ll miss out on a tremendous number of new customers.”
Reaching your customers online might require content marketing, email newsletters or social media advertising, but before moving forward, it’s important to assess the needs of your company.
“Small business owners should start with a comprehensive marketing audit,” she says. “Identify marketing gaps that exist and research which channels are most likely to reach your prospects.”
Business Line of Credit Strategy #5: Win a major contract
If you win a major contract, it may require upfront investments in supplies, equipment and employees. A business line of credit can help you meet these needs without a cashflow crunch.
“The federal government sets aside contracts specifically for small businesses, but it takes a lot of cash to qualify for these opportunities,” Thompson says. “The U.S. Small Business Administration reports that some businesses can spend up to $130,000 to earn their first contract.”
Despite the heavy costs, this can still be a worthwhile investment.
“According to the SBA, the U.S. federal government is the largest buyer of goods and services in the world,” says Thompson. “If you turn them into a repeat customer, it could generate long-term gains for your business.”
Apply online for a Zions Bank Business Line of Credit[cite::6043::cite] in less than 15 minutes. For borrowing up to $50,000[cite::29::cite] you could get a same-day decision and next-day business funding.
Malcolm Hong is a public relations officer for Zions Bank in Idaho.