“For me, the most fun is change or growth… Launching a business is kind of like a motorboat: You can go very quickly and turn fast.” – Tony Hsieh
Do you own a small business or a startup? Are you considering expanding your products ranges to increase your bottom line and ultimately your bottom line? To drive growth in your business, it is vital that you find what makes your business different. In other words, what is your value proposition? What makes your products different, and why will your customers choose your products over all of the other options available in the marketplace?
Growing your business through development and change
The InfoEntrepreneurs.org website states that “the successful exploitation of new ideas is crucial to a business being able to improve its processes, bring new and improved products and services to market, increase its efficiency and, most importantly, improve its profitability.” In other words, in order to improve your company’s value proposition, you will need to embark on an innovative product development journey. You need to find a gap in the market and develop products to fill this gap, or you need to adapt your current products so that they are better than your competitors’ products.
Furthermore, it is correct to assume that there will be a substantial cost to the product development process. Even though the return on investment (ROI) will be enough to justify spending this money, the question that needs to be asked is where will you source the funds for this capital investment?
Small Business Loans
As part of the your product-development journey, I believe that it is important to have a deep-seated understanding of what a loan for a SME entails is. In a nutshell, it is “an amount of money borrowed from a financial institution by a small business person to start, run, or expand a small business.”
Unfortunately, it is not easy to take out a small business loan from a traditional bank. Financial institutions such as banks are notoriously reluctant to lend money to startups and SMEs. This is because of the increased risk involved when lending to large corporations or more established businesses. You might have a solid business plan and an excellent credit rating; however, most of the larger banks will still turn down your loan application.
You will also find that the interest rates for a small business loan are also substantially higher than that of a mortgage loan or a loan to a large corporation. This is partly because a SME is not expected to have enough collateral to cover the loan amount. Ergo, there is a higher risk attached to lending money to a SME.
As a result, I believe that it is important to find a financial partner who understands the intrinsic value of your business, and who is able to put together a tailor-made loan to suit your unique requirements. Some companies make it their business to specialize in providing turnkey solutions to SMEs (Small-Medium Enterprises). Ergo, they are not put off by the statistical risk that comes with providing loans to smaller companies.