8 Simple Ways to Gain Funding for Business Growth

Insight into Funding for Business Growth

Most startups hope to generate a small profit and use it to fund their small businesses, with the hope of achieving growth in the long-term. Slow and steady growth is essential for generating profit, growing the customer base, and having enough left over to survive.

Few business owners had the assets required to achieve these growth goals but instead sought funding from an outside investor. Finding creative ways to gain funding is critical to survive in a global and competitive economy.

Read ahead to understand the top successful business ideas used by startups to acquire business financing and increase brand loyalty.

8 Ways to Generate Business Growth

The vast majority of companies struggled with financial difficulties in 2020 but did not attempt to receive funding from a third-party.

This was due to high-interest rates, poor repayment conditions, too small of loans, excessive requirements, or because the organization received funding elsewhere. Those who found other funding methods were able to expand, pay operating costs, reduce their debt, and acquire new equipment.

The inability to receive funding makes it difficult for a startup to grow. Few small organizations have the necessary assets to reach their potential. Because funding is so critical to growth, companies need to find other strategies to generate cash. These include

1. Increase Prices for Business Growth

Businesses can increase profit by correctly raising prices. Simply raising costs without an effective pricing strategy will hurt retention rates and put more pressure on the organization to improve its product/service.

Small price increases are typically unnoticeable and do not impact customer retention. Openly communicating any price increases that are higher than 10% will minimize any customer frustration or losses.

2. Upsell Items for Business Growth

Upselling is a sales technique that convinces customers to buy a higher-cost item or additional services. Retailers frequently encourage their sales team to upsell items to achieve high growth and increase profits.

By selling a more expensive item, the customer receives more value and the expenses for offering the upsell are not much greater. It's a win-win strategy for both the customer and the business.

3. Cross-Sell Items for Business Growth

Cross-selling is a technique in which a sales team member encourages a customer to buy an item that would complement a purchase. For example, a waitress may be instructed by management to offer a cup of coffee with every dessert item purchased.

Cross-selling increases the number of available package types and generates more working capital and sales for the organization. The strategy is only effective if both items complement each other and apply to the target market.

4. Ensure Customers Make Another Purchase for Business Growth

It's always more difficult to sell the first product/service than the second or third one. If a customer is satisfied, he/she will probably be willing to purchase another item later. Employing a business growth strategy that encourages recurring purchases will generate superfluous profit because there aren't any new customer acquisition fees.

5. Lease Instead of Own for Business Growth

While it's very tempting to want to buy a business, startups are better off leasing because it is much more cost-effective in the long run. It's also better to pay for only what is required rather than placing too much capital into a risky investment. Unfortunately, many small organizations mistakenly purchase expensive real estate properties, making it much harder to find capital for day-to-day operations.

6. Collect Outstanding Payments for Business Growth

Businesses that are too lax with accounts receivables lose a lot of money and disincentivize customers to pay on time. If a customer knows that the company has lax accounting policies, he/she will be more likely to take advantage of this again in the future.

It's important for businesses to regularly check their accounts receivable records and contact customers who are behind on payments. Sending accounts to collections is an unfortunate requirement to ensure customers pay back what they owe. This will also decrease waste and increase the bottom line.

7. Corporate Grants for Business Growth

Recently, larger businesses have offered grants to assist startups. Small businesses should seek out larger companies that are part of the supply chain that would be willing to invest.

Many corporations offer these business loans as a PR move, so it's not a charity case on their end. The relationship is mutually beneficial and will help the startup receive the assets required to begin operating.

8. Crowd-Funding for Business Growth

Crowd-funding is a method to acquire business funding through family, friends, or other interested parties. The most common crowd-funding organization is Go Fund Me, which is a social fundraising platform for various causes.

Startups use crowd-funding and angel investors to increase brand recognition, achieve the assets required to operate, and grow customer loyalty. Many individuals sympathize with a startup trying to survive in a world of corporate bigwigs.

Key Takeaways of Funding for Business Growth

In conclusion, here are the 8 simple ways to gain funding for business growth -

• Businesses should increase prices and upsell items to generate high growth without hurting customer retention rates.
• Cross-selling is an effective strategy to improve customer value and achieve higher profits. Making sure that customers continue to purchase more items is also effective at improving retention rates.
• Leasing is more cost-effective and less risky than purchasing a piece of real estate It's also critical to collect outstanding payments to eliminate waste and prevent customers from taking advantage of the organization.
• A business loan through corporate grants and crowd-funding are two effective tactics used by startups to increase assets.