You did it — you got the funding you’ve been after. For the first time in a long time, your business bank account has room to breathe, thanks to your new cash infusion.
But don’t relax yet. The deposit into your account isn’t the end of the transaction. Now you have to figure out the best ways to use the money.
Reading about all the hardware, software, products and services that you could buy to boost your business could keep you up all night. With the endless options, it’s tough to know which is the smart spend that will take your business to the next level and which is just a waste of cash.
You might sleep better after prioritizing the investments that will best transform your bigger bank account into more revenue. That’s the goal of any business loan, right? A good way to begin is to focus on four key areas:
1. Give customers what they want
Great products and services are what keep customers coming back and build loyalty, which is incredibly valuable. Now is a good time to step back and look at your offerings holistically. Be honest with yourself. What’s not performing like you thought it would? Let it go. What are customers coming back for or specifically requesting? Invest in these revenue drivers. Let the numbers be your guide, so you’re not biased.
2. Amp up your technology
The right technology can give you new insights about customers and prospects, help you find efficiencies, and protect your business from the nightmarish hacking and data-loss disasters that have crippled many companies.
Begin with customer relationship management (CRM) software like Nutshell CRM, Salesforce or Microsoft Dynamics CRM that helps organize and automate your face-to-face and Facebook-to-Facebook engagements with customers. It also lets you track customer loyalty programs and run targeted marketing campaigns. These are available as online services, so you simply pay a monthly subscription fee to store and access all your data and CRM services easily and from anywhere.
Don’t fool yourself: Hackers aren’t just targeting huge enterprises. They are increasingly turning to small businesses. Give top consideration to technology that will secure your business and customer data, such as additional firewall software, EMV chip-card readers, and business identity theft protection. Yes, businesses are just as susceptible to consumers. Criminals can use your business identity and take out credit in its name.
3. Update your equipment
Your biggest mistake may be waiting until a key piece of production or computing equipment breaks to replace it. Think about all of the orders you’ll have to delay or jobs you’ll have to turn down if your equipment isn’t working. Investing in new equipment now will save you a headache — and the greater expense — associated with an emergency replacement later.
4. Pay down your debt
If you have a bank line of credit or use a business credit card, that debt is likely to carry a higher interest rate than your new business loan. Consider using part of your loan to pay down your high-interest credit balances, which will help improve your business credit scores. Building stronger business credit will let you qualify for more funding, with better interest rates, the next time you’re in need.
One of the greatest traits of a business owner is to know what they don’t know. If you’re not sure what to invest in, talk to other business owners in your industry. Ask your staff for their opinions. Turn to experts in the field or a financial planner who specializes in small business. You’ll breathe a lot easier.