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Small Business Tips

8 Ways to Grow Your Small Business

grow your small business

Small businesses are the backbone of the American economy, but all too often, small businesses run into roadblocks that can cause them to fail or at least become stagnant. If you want to see your business grow and thrive, we have eight suggestions for how you can make that happen. Don’t leave the success of your small business up to chance. Jump on the following opportunities to grow your business.

How to Grow Your Small Business:

  1. Refresh Your Brand
  2. Focus on Customer Service
  3. Advertise Locally
  4. Offer Promotions
  5. Manage Your Inventory
  6. Add Credit Card Processing
  7. Implement Customer Loyalty Program
  8. Use an All-In-One POS

1. Refresh Your Brand

Your brand encompasses all aspects of your business’s identity. It includes basic elements like your name and logo and more conceptual elements like your company’s core values and your overall “personality” as a business. The goal for most businesses is for their brand to make a positive and memorable impression. Whether you operate a hair salon, a grocery store or a clothing boutique, you want your business to be the one that comes to a person’s mind when they think about whatever category your business fits into.

Strong branding can help you make a lasting impression and can help project the positive values you want people to associate with your business. If you think your branding may not be doing these things for you, then it’s time for a refresh. Rebranding can mean a complete overhaul of your name, logo and more, or it can be more subtle. In some cases, hiring a graphic designer to help you come up with a more effective logo can be all the difference you need.

If you’re confident in the more aesthetic aspects of your brand, you may want to focus on those more conceptual aspects. Make sure your business has a clear mission, vision and values. Did you know that 64 percent of consumers say they’re more likely to form a trusting relationship with a brand that shares their values? Branding isn’t just for your customers — it’s for you, too. Make sure your employees are familiar with your brand’s identity. When you and your employees feel confident in your company, that confidence will allow your business to grow and thrive with greater success.

2. Focus on Customer Service

focus on customer service

Amazing customer service is one of the things that tends to attract consumers to small businesses over big box stores or bigger companies where they may pay less. The numbers don’t lie. A majority of consumers will spend more money to patronize a business that delivers superior customer service. This should be encouraging to small businesses because they are often in a better position to offer excellent customer service.

When your clientele is smaller, it means you can develop closer relationships with your customers. You may even be able to greet some of your customers by name or ask after their family members or other aspects of their personal lives. However, even if you have repeat customers, you’ll never be able to develop these sorts of personal connections if you don’t take the time to say hello and make conversation. Something as simple as that can turn someone into a lifelong loyal customer.

Anyone in business knows that customer service isn’t always just smiles and pleasantries. Sometimes, it means handling difficult situations and trying to please a customer who is upset over something like a faulty product, a scheduling error or any number of problems that are bound to occur from time to time. In these situations, customers should know you genuinely care about solving a problem, and you should address it as quickly as possible. In every aspect of your customer service, make people feel valued, and they’ll value your business.

Advertising can get expensive, and it doesn’t automatically lead to growth, so you shouldn’t take out ads left and right without careful consideration. That said, some strategic advertising can certainly help you gain exposure and can help your business grow. What is strategic advertising? Boiled down, it’s advertising that gives you the highest return on your investment. The less you pay for an ad and the more customers it brings in, the better.

Simple, right? But how can you pull it off? It can seem impossible to compete with large national or regional chains because they spend excessive amounts on advertising. So, rather than try to compete with this level of advertising, focus on the unique advantages you have as a small business. People are more likely to see your small business as a part of the local community. So, focus on local advertising, and emphasize your role as a part of the local landscape.

See if any restaurants include ads on their menus or tabletops. See if other businesses or community centers will let you post a flyer on their bulletin boards. You may even want to consider taking out an ad with a local radio station. The key is to keep it small so you’re not overspending and you’re still reaching the local customers who are most likely to stop into your business. The Small Busines Administration has many affordable advertising ideas.

4. Offer Product Promotions

offer product promotions

It’s no secret that people love a good sale. Promotional deals have been a long-time strategy for retailers, and it’s no wonder. Sales can pull in new customers and keep current customers coming back. Even if they come in for a particular item that’s on sale, they’re likely to purchase other items in the store while they’re there. It’s a win for them, and it’s a win for you.

So, if you’re not currently offering any promotions, that needs to change if you want to grow. It can be overwhelming to know where to start when it comes to store promotions. How can you decide what to promote or place on sale? In some cases, you can make this decision based on your current circumstances. For instance, a sidewalk or clearance sale is an excellent way to attract customers while also getting rid of older inventory you no longer want to store. If you need to sell perishable items before they expire, a promotion like a buy one, get one free can help.

For regular promotions, it helps to have software that does the work for you. If you’re in the market for a point of sale (POS) system, look for software that takes the guesswork out of creating store promotions. If your POS system has a customer-facing screen, use it to display information about current or upcoming sales. This will encourage customers to come back tomorrow or next week for more great deals that help grow your business.

5. Manage Your Inventory More Effectively

Inventory is an essential aspect of so many small businesses, from restaurants to retail. Of course, different businesses have different needs when it comes to inventory tracking, but they all share a common goal of managing inventory effectively. Effective inventory management isn’t just about knowing what’s in your inventory currently. It’s about making your inventory help your business grow.

For a restaurant, that may look like accurately tracking how often and how much lettuce you need to be delivered. When you pinpoint the right delivery schedule and amount, you can make sure you always have fresh lettuce for your diners, avoid waste and maximize your profits. For a grocery store, effective inventory management tracks which products are especially popular and which may need to be eliminated from your product offerings. Does one type of cereal sell out while another simply takes up room on the shelf?

The key to successful inventory management today is to let technology do the work for you. You don’t need to base decisions on guesses or assumptions, and you don’t need to be consumed by manual tracking methods. Using outdated systems like spreadsheets for inventory management over modern cloud-based software systems can lead to mistakes that make up as much as 35 percent unnecessary costs for inventory management in a year.

If you want your business to grow, get great inventory management software for your small business, and let the data speak. If your POS system offers inventory tracking, that is an excellent way to streamline the process and take full advantage of modern technology.

6. Add Credit Card Processing

credit card processing

This may seem like a small thing, but if you don’t currently have an option for credit card processing, you could be stunting your company’s growth. For a small business, credit card processing may seem like an unnecessary headache. This may apply to you if your business is exceptionally small or if you sell at farmer’s markets, fairs, festivals or trade shows more than in a brick-and-mortar store. While it may have been acceptable to expect consumers to pay in cash at these venues a decade ago, that is no longer a reasonable expectation.

According to a study by the Mercator Advisory Group, 36 percent of consumers checking out in a store prefer to pay with a credit card and 33 percent with a debit card. Only 18 percent prefer paying in cash. When over two-thirds of consumers prefer to check out with a credit or debit card, you need to make that possible. Otherwise, you may lose their business.

To get started, you’ll need to have the right equipment. Purchase or rent a credit card reader where customers can swipe or insert their cards. The credit card machine for your small business should be integrated with a POS system so the system can coordinate with financial services to automate the credit card processing fees. If your credit card processor can also handle mobile wallet payments, then you can please even more customers. Never let the logistics of payment stand in the way of a sale.

7. Implement a Customer Loyalty Program

Are you aware that even just a five percent increase in customer retention can lead to more than a 25 percent increase in profit? If this number from Bain & Company seems hard to believe, keep in mind that it always costs more to acquire new customers than it does to keep your existing customers. Focusing on turning customers into repeat customers is a smart strategy if you want your business to grow and experience long-term success.

Delivering the excellent customer service we discussed earlier is one way to keep customers. Another way to encourage customer loyalty is through a loyalty program that tangibly rewards customers for their repeat business. Many consumers will shop more frequently, or even exclusively, at a store where they have a loyalty membership.

You could use a variety of models to build your customer loyalty program. A simple example is the stamp card where customers get a stamp for every $10 spent, for instance. Once their card is full, they get a special discount or even a free product. The issue with a stamp card or other manual rewards methods is that they don’t fit especially well into our modern world where customers expect processes to be automated for speed and accuracy.

A more attractive model for these consumers is a rewards program that uses modern technology. When loyalty customers can get special promotions sent to their phones and cash in on rewards by simply scanning a card, they will be more likely to stop in and make a purchase. Don’t worry if you feel overwhelmed at the thought of making this happen. Consider taking advantage of a program that does the work for you, like the nationwide BR Club loyalty program.

8. Use an All-In-One POS System

all in one pos system

If you want to really bring your small business to the next level, an easy and effective way to do that is by purchasing an all-in-one POS system. There are many reasons to get an all-in-one POS for your small business. If you’re currently using a manual cash register for your small business, any POS system is a significant step up from manual ways of facilitating the point of sale, but an all-in-one POS system is more like a giant leap up.

An all-in-one system includes every component you need at check out, including the cash register, credit card reader, terminal screen and receipt printer, plus the software you need to manage inventory, track sales and more. A POS system like this can streamline the way you run your business and help you do it more successfully. No one wants to deal with a multitude of tech tools that aren’t designed to work together. And no one wants to pay for all of these tools separately, either.

You should look for an all-in-one system that is cloud-based, meaning the software is stored in the cloud as opposed to being installed on your local hard drive. One advantage of cloud-based systems is that your provider can update them remotely. Another significant advantage is that you can access your data from anywhere, so even if you’re not at the store, you can still manage your store by checking in and even making changes to the system if needed.

Watch Your Business Grow With the POS+ From NRS

grow your business with NRS

The best POS system for small businesses is the POS+ from National Retail Solutions. Our all-in-one POS system offers the best value on the market, so your small business can afford it. If you’re hesitant to make the investment, think of the many benefits your business will enjoy with modern POS hardware and software. With the POS+, you can easily manage your inventory, track sales data, offer product promotions, encourage customer loyalty, allow customers to pay in any way they prefer and deliver a checkout experience that’s engaging and efficient.

If you’re interested in how the POS+ could help our business grow, contact us for a free quote today!

Categories
Small Business Tips

What to Know About Cash Advances for Small Businesses

cash advances for small businesses

What to Know About Cash Advances for Small Businesses

Most small businesses have a keen understanding of the phrase, “It takes money to make money.” It can be frustrating to know that your company would almost certainly thrive if it weren’t for a temporary cash flow problem. You may have to turn away business because you don’t have the funds to fulfill orders or can’t afford the equipment you need to perform a particular service.

Being short on the money you need to make money is a common problem. You may be short on funds because your money is tied up in inventory or because you are waiting on customers to pay. Whatever the cause of the problem, a disruption in cash flow can be a serious detriment to your business. Cash flow problems cause a staggering 82 percent of business failures.

So, what can you do to overcome a financial bump in the road without letting it turn into an insurmountable obstacle? When your business lacks the funds it needs, it’s time to look outside of your business for financial help. There is always the traditional business loan, but loans like this require you to get approved, which can be difficult or impossible for businesses that have just started out or have some unfortunate credit history behind them.

The perfect solution for many small businesses strapped for cash is a cash advance. In this post, we’ll learn more about what a cash advance is, how it works and why you should consider seeking one out for your business.

What Is a Cash Advance?

A cash advance, also called a merchant cash advance (MCA), is a way to finance essential business purchases like new inventory, supplies or equipment when you’re short on cash. In most cases, you can get up to $250,000 from a cash advance loan.

merchant cash advance

Though a cash advance is often referred to as a cash advance loan, it isn’t technically a loan. It’s actually a sale of your future assets. When you know having access to cash right now would solve your problems and allow your business to make money, then you can sell a portion of the profit you stand to bring in to the MCA provider in exchange for the cash advance.

Because a cash advance is a different financial product from a loan, it’s a viable option for businesses that have applied and been turned down for a traditional business loan. This means issues like a low credit score or limited business history won’t keep you from being able to get a cash advance.

Like a short-term loan, cash advances are meant to be a quick fix solution that can help businesses right away. You get the cash you need, sometimes in as little as two days, and you pay the lender back relatively quickly — often within a matter of months.

Why Do You Need One for Your Small Business?

Based on the explanation above, you probably already have a good idea of why your business could benefit from a cash advance. Let’s look at three major reasons why your business might need a cash advance:

1. You Need Cash Now

The most basic reason to consider a merchant cash advance is that you need access to cash now. There are many reasons why you may need money right away. For example, one problem some small businesses run into is that they don’t have the money to purchase new inventory. You may have purchase orders that you can’t fulfill because your customers won’t pay you until you’ve paid to restock the products they’ve ordered.

If you find yourself in this scenario or another circumstance where you need money before you can make money, then a cash advance is a valuable option. You can pay your wholesaler or manufacturer and satisfy your customers. In turn, you’ll get paid and can pay back the MCA provider.

2. You’re Just Starting Out

Starting a small business takes both careful planning and a leap of faith. Before you can make any money, you need to fund all sorts of startup costs, such as your building, employees’ salaries, equipment, inventory and more. You may think at first that you’re all set but then run into additional costs you aren’t prepared for.

If you run into unexpected costs that you need additional money to pay for when you’re first starting out, you may apply for a loan and quickly find that it can be difficult to be approved for a loan when you haven’t been in business long. A cash advance can be a helpful solution for new businesses who need a little extra push to get some momentum going.

3. You Have Bad Credit

Another common reason why you may not be able to get approved for a traditional loan is if your credit score is too low. Business credit scores range from 0 to 100. If your business’s credit score is below 75, you may have trouble getting approved for a loan. You could also apply as an individual, but you’ll probably need your personal credit score to be around 700 for a small loan or closer to 800 if you want a business loan.

Your credit score is based on factors such as whether you pay bills on time, what your credit history is like and how much available credit you have. While poor decisions or mismanagement can certainly lead to a bad credit score, you may also experience difficult circumstances that are beyond your control. Whatever the reason for your low credit score, it won’t keep you from getting a cash advance.

How Do Cash Advances Work?

how do cash advances work

We’ve looked at the benefits of a cash advance, but how exactly does it work? Fortunately, the process is fairly simple. If you get approved for a cash advance, you receive your money in a lump sum right up front. There are two possible ways you can pay the provider back:

  1. You give them a portion of the proceeds from future debit and credit card sales until they are paid back. This portion will be expressed as a percentage.
  2. You allow them to debit your account on a daily or weekly basis until they are paid back. These regular payments are called Automated Clearing House (ACH) withdrawals.

Unlike a loan, with a cash advance, there is no set time in which you need to pay back the provider. You will simply continue to make payments in one of the two ways above until the provider has been paid back.

Of course, the amount you pay back will end up being a bit higher than the amount you were advanced. This is how cash advances can be mutually beneficial for businesses and MCA providers. The provider will determine what is known as a factor rate. When multiplied by the amount of cash you receive, this factor rate will determine the total payback amount.

For example, if your advance is $1,000 and the provider agrees to be paid back at a factor rate of 1.3, you will end up paying $1,300 back to the provider. The good news is that, even if it takes you longer than you had planned to pay back the amount, the advance won’t rack up any interest. The final amount you pay will always be set at $1,300.

The terms of the cash advance will outline how much money your business will receive, how much you will pay back and how you’ll make those payments.

What Are the Advantages and Disadvantages?

As with any form of financial assistance, cash advances come with some potential disadvantages, but they also have some advantages. Let’s take a look at the pros and cons of getting a cash advance.

pros and cons of cash advance

Disadvantages

When you research cash advances, you may see warnings of their pitfalls, but in many cases, these aren’t necessarily disadvantages unless you have a false expectation of what you’re getting with a cash advance. It’s important to understand that merchant cash advances:

1. Can Be Costly

Compared to other forms of financial assistance, cash advances can be expensive. Most factor rates fall between 1.1 and 1.5, so in the worst cases, you could end up paying 50 percent more back than you received. Look for a contract that includes a lower factor rate. The lower the factor rate, the smaller the percentage above your advance you have to pay back.

2. Come With Restrictions

Since MCA providers have a vested interest in your business being profitable, their cash advance contract may include some contingencies to help ensure that you can pay them back. For instance, you may not be allowed to close your store for an extended period of time or change locations.

3. Can’t Fix Long-Term Problems

Cash advances are meant to help businesses solve temporary problems so they can make money. When companies have ongoing issues with their cash flow, this is an indicator that some inherent problems in the business structure need to be solved. In these cases, a cash advance will only put a bandage on the problem.

4. Depend on Future Sales

This isn’t necessarily a disadvantage, but the future can be unpredictable. You may think that once you get your cash advance, your business will make plenty of sales and you’ll be able to pay the MCA provider back quickly, but there may be a chance your business won’t do as well as you expected and it will take longer to pay the provider back.

Advantages

Cash advances also come with their fair share of valuable benefits, which is why they’re a popular option for businesses that need a leg up. Some of the pros of cash advances are that they:

1. Are Easy to Apply For

Applying for a cash advance tends to be a very simple, straightforward process. MCA providers don’t require much documentation from you, and what is needed, you can upload online. In many cases, you can complete the whole process online, so you don’t have to take the time to go to a bank or office. The terms of your advance should be clear so there’s no confusion or hidden costs.

2. Have High Approval Rates

Getting approved for a cash advance tends to be much easier than getting approved for a loan. You may have to provide a few months’ worth of your business bank statements or records of your past credit sales so the MCA provider can see that your business will do well enough to pay them back. They may also want to see your credit history, but the standards won’t be as high as they would be for a bank loan.

3. Get Money to You Fast

Cash advances are especially helpful when you need cash right away. After submitting your application to a provider company, you should hear back quickly. If you are approved, then you’ll likely get your cash advance within a week. Some companies may get it to you in as little as two days. This stands in stark contrast to the months it can take to get your money when you apply for a bank loan.

4. Don’t Require Collateral

If you open up a line of credit or get a loan, you have to provide at least some of your current assets as collateral in case you default on the loan or can’t pay back the creditor. You don’t have to do this when you get a cash advance, though. Since cash advances are unsecured, you don’t have to put any of your assets – either personal or business – on the line.

5. Accommodate Ebbs and Flows

Loans with fixed monthly payments don’t take into account the natural ebbs and flows of business. You may have some months where you do very well and others where sales are down. While some cash advances involve set payments, the more common model is that the provider gets a percentage of your credit card sales. This means, if sales are down one month, so is your payment to the provider.

How Does a Cash Advance Through NRS Work?

get a cash advance

To get a cash advance through NRS, you can apply online. Just fill out the quote request form, and then a cash advance specialist will reach out to you to answer any questions you have, address any potential concerns and get any additional information needed to draw up a cash advance contract.

If you are approved, you’ll receive your money within two to three days. This means you can immediately put your cash to use to buy inventory, office supplies or equipment, or to use it for working capital. A cash advance gives you the money you need now so you can continue to be profitable in the future.