Grow Your Product Business With These Five Investments

man with jetpack beating man on ladder competition grow your business

Business owners must constantly walk the cashflow-tightrope—simultaneously balancing operational costs while investing in growth. Bootstrapping capital from personal finances, friends and family, and early stage investors will only carry an organization so far. Eventually the business will need a significant cash infusion in order to scale. Instead of gritting your teeth and hoping that sales magically skyrocket in time for you to make payroll and increase production, consider what a small business loan could do to help your business achieve growth, sooner. Here are five investments you should make early on to help grow your business. 

“Many of life’s failures are people who didn’t realize how close they were to success when they gave up” – Thomas Edison

1. Take advantage of large inventory purchases

Inventory-heavy businesses know that it is much cheaper to produce and buy products in bulk than it is to buy them piecemeal to fill smaller orders. However, keeping a back stock of inventory ties up your working capital for longer periods, making it difficult for businesses to continue growth while product is sitting on the shelves. By securing business financing, you can take advantage of large inventory purchases without depleting the business coffer and risking falling short on funds needed to continue operations.

2. Hire the right  people

Finding the right employees that fit both your business’ needs as well as your company culture is no easy task. Employees that satisfy both these criteria are hard to come by and often come at a cost comparable to their skill level. When the right employee comes along, it’s important that your business has the financial capability to hire. If you have to pass on the perfect employee because your cashflow can’t handle another salary, you run the risk of robbing your business of a person who might have skills to help you scale. Our CEO, Krista Morgan, tells entrepreneurs that it is important to “seize the moment” and take the payroll risk if it means growing a diverse and successful team that is going to help you raise your game.

3. Invest in the right technology

Automating some of your business processes early can help ensure that you’re focused on strategic decision making and spending less time inundated by the daily tasks that often monopolize too much of an entrepreneur’s time. Your energy is valuable and you need to spend it wisely—especially in the high growth stages of your business. Accounting software, Customer Relationship Management (CRM) tools, functional websites, and inventory management software all come with a high sticker price, but can help you automate parts of your business operations and create immense long-term value. 

If you don’t invest in the proper software early, you might also be actively losing important data like customer info from website visits, or dig yourself into an accounting mess that takes months to come back from and derails operations. By investing in the right technology, you can ensure that you are capturing the data you need while decreasing time spent in hands-on management.

4. Spend money on a proven marketing campaign

If you’re trying to scale your business, you should be spending more than 10% of what you plan to make in the next year on marketing activities. Generating brand awareness and growing a community of ambassadors takes capital investment that while possibly creating a degree of sticker shock, can pay exponential dividends. Spend the money to create campaigns and branding that you feel confident will resonate with your prospective customer and generate business. Just make sure that you have systems in place to measure the success of your campaigns so you can calibrate marketing initiatives as you go. 

5. Invest in activities that allow you to deliver goods/services faster

In addition to valuable technology, your business can also use working capital to invest in relationships with business partners that will help you deliver your goods faster and at a higher quality helping you increase sales and hopefully decrease your margins. Manufacturers, co packers, drop shippers, and other players in the CPG supply chain follow the standard adage of; you get what you pay for. By investing capital to ensure you’ve secured a quality business partner, you can feel confident that you’re bringing a product to market that reflects your brand.

Smart entrepreneurs know that the cost of working capital is worth the investment and stimulates rapid growth.As a rule of thumb, you should take advantage opportunities that will have a return on investment in excess of the interest charges on the amount borrowed. If you’re business is feeling the strain of cash-flow challenges and you’re in the critical early stage of your scaling your business, you should consider taking out a loan or working with an alternative lender to help mitigate shortcomings and jumpstart growth. Luckily, there are many options available to you. Check out our list of best online lenders for businesses at every stage.

One Comment on “Grow Your Product Business With These Five Investments”

  1. Nice share. I really enjoyed reading and learning how to grow product business using the five investments mentioned above. I think people will get benefit reading this post.

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