Financing a Small Business

Financing a Small Business Note: Financing remains one of the major problems that confronting small business personnel. Various funding options are available, each with its advantages and disadvantages: ● Self-Funding: The utilization of the owner’s, partner’s or shareholder’s own money or properties as capital for the business venture. This option will prevent debt but if personal finances are a little tight then these options can be dangerous. ● Loans: A bank loan or a small business administration SBA loans provide credit with the option of a set number of years to pay back the amount borrowed. This option is based on the credit history and needs collateral on the part of the applicant. ● Investors: The Angel investors and the venture capitalists invest by purchasing stakes on the business on a premises of receiving returns thus are equity investors. This option can provide large amount of capital but owners will lose controlling rights over the company. ● Crowdfunding: Using the internet connection to gather small amounts of money from a great number of people, for example, Kickstarter, Indiegogo. This option also plays the role of creating a customer base for the organisation. ● Grants: Grants containing monies given by the government or private institutions which the recipient is not required to pay back. Grants are very much on competition and people are asked to go through a series of steps before they can be considered. - depending on the need of the business, its growth and development stage and, especially, depending on the willingness of the owner to surrender some control over the business in exchange for the financial means needed, the choice of financing option that is most suitable can be made. Marketing Heaven for Small Business - Marketing is a key aspect that determines if a business will efficiently attract as well as maintain its customers. Small businesses can leverage various strategies to reach their target audience: 1. Digital Marketing: Using social media, electronic mail as a tool of advertising the products and services as well as search engine marketing. It is cheap and its impact can be easily measured hence it is a proper way of reaching a large number of people. 2. Content Marketing: Developing good and relevant content of articles, videos, and graphics for capturing and informing the customers. This strategy helps to provide confidence to its clients and to set up the business as a credible one in its line of operation. 3. Local Marketing: Such as it participating in local events, being a sponsor of activities in the community and partnerships with other firms in the community. The above approach engulfs the local communities in their support and publicity of the brands. ● Referral Programs: Offer customers some other discounts/rewards for bargaining in an attempt to persuade them recommend other customers. Start and word of mouth is very considerate and can greatly increase the rate of new customers. ● Branding: It includes establishing a unique brand image, an enticing emblem, focussing on a clear and harmonized marketing communication and statement of service. Brand identity defines the business by ensuring that it stands out from rivals while bequeathing a lasting imprint on the client’s mind. Marketing and promotional campaigns must be directed at the business’s intended consumer and needs to be reviewed periodically.