Available capital in business.

“Why some Businesses Grow” Part 4

This week I will share with you about the importance of making sure there is sufficient capital available.

By “Capital” I mean working capital or sufficient liquid funds to enable your business to operate.

Improving your business systems (Part 1), Leadership skills in your business (Part 2), The importance of Marketing (Part 3), Available Capital in Business (Part 4)

This week I will share with you about the importance of making sure there is sufficient capital available.

By “Capital” I mean working capital or sufficient liquid funds to enable your business to operate as it needs to.

The diehards might be saying or at least thinking, “I don’t need any more capital” my business is just fine as it is. And that might be so.

However, humour me for a moment and imagine if you had an additional

$2 Million available for investment in your business – what would you do with it?

I have listed a number of suggestions below:

1. Would you invest in additional buildings (or perhaps your own building)?
2. Would you invest in capital equipment? What equipment and why?
3. Would you open another branch of your business elsewhere?
4. Would you make your business more equipment intensive rather than labour intensive? (Are their productivity gains to be had? And what would be the annual wages savings?)
5. Would you expand into a new market within your industry?
6. Perhaps you’d invest outside of your present industry?
7. What about investing in additional marketing campaigns?
8. Or engaging additional staff – say Business Development Managers – to assist in the growth of the business.

What additional things would you do that are NOT listed above?

Now I am not talking about just blowing it all on indulgences like travelling around New Zealand or the world.

However, there is no reason why you wouldn’t or couldn’t use the capital to better prepare your business for sale so that you maximise your return on investment and then can take that well deserved break.

I mean you do have an exit plan or strategy for your business don’t you?

Now for many the exercise is only hypothetical. However if you treat the exercise seriously you may well uncover creative ways of approaching your business that you had not thought of before.

OK Tibor, so now I have thought of all these ideas, IF only I really did have the money.

So how do you go about accessing additional capital?

There are many ways and it is not my purpose to give an exposition on capital funding options as it is outside the scope of this article.

Nevertheless if you are in need of capital and you want to explore the traditional sources, by all means drop me a line, and I will connect you with professionals in my trusted network that specialize in all types of finance and capital raising.

That said there are often a number of overlooked sources of capital or cash within businesses.

Take a good close look at your operations and you will often uncover mountains of hidden cash that is lying untapped and unproductive in your business.

I can hear you say, “Tibor, you can’t be serious?”

I couldn’t be more serious.

For example, IF You could increase your Net Profit by 61.75% that would give you additional cash flow which could either form all or part of the capital required or enable you to service a debt facility that provided the capital required – would it not?

Clearly the answer is yes.

So, Tibor – how do I increase my Net Profit by 61.75%?

You can do this by implementing street smart strategies that

1. Increase your Sales by 5%
2. Decrease your Cost of Goods Sold by 5%
3. Decrease your Overheads by 5%

Now Tibor – you are teasing me (yes I am) – what strategies are these?

These are strategies that my clients appreciate and benefit from because they have invested in the street smart marketing, business coaching and/or consulting services of Better Business Strategies – Business Growth Specialists.

(You didn’t really think I was going to spell it all out for you did you?)

The good news is that you too can make a positive choice to engage external expertise that can greatly impact the profitability, productivity and ability of your business to access to capital it requires to go to the next level.

If you need any assistance with the above the please contact me.

Final questions for today:

If there was one primary obstacle you could remove from your path that is hindering your businesses growth and prosperity – what is it?

And what are you now going to do to get it out of the way?

Next time I will round off with the final article in this series on the 5 Growth Limiters.