Jessica has been a small business owner for the past three years. Business was booming in the first year, but her clients slowly started disappearing in the second year. The third year was the hardest, as her regulars sometimes went weeks without ordering from her.
A friend helped her understand that the root cause of this is that her clients want a one-stop shop for all their needs, and she currently only provides half of the services clients want.
Sensing danger, Jessica realizes that the only way to keep her business afloat is by taking a small business loan . The fact that she has built splendid relationships with many of her clients emboldens her because she knows they will come back if she starts offering all the services they need.
A business is like a plant, it needs to grow
A small business loan is an amount of money borrowed from a financial institution to start or expanding a small business.
Jessica, who owns a catering business, needs one because she only provides lunch options, while her clients want a caterer who can provide breakfast, brunch, lunch, and dinner.
She can use her loan in four of the areas that most small businesses generally invest in when they want to be more competitive.
More staff could be exactly what you needed
The quality of the product and service matters a lot to the clients. Having adequate and trained personnel helps businesses give their clients the best possible products/services.
Increasing the services of the businesses without increasing the staff almost always results in a disaster. This is because overworked employees will not be able to maintain the required quality.
Securing a small business loan will enable Jessica to hire more people so that she can include breakfast, brunch, and dinner to her services.
She can also hire a delivery person who will be on standby to deliver the food on time to her clients.
I don’t want more clients and money, said no one ever
Production is the process of creating a product or service that has value.
Better tools and equipment in any business allow a smoother production process. They also reduce the time and effort required to produce a product. Enterprises are thus able to cater to more people without straining their employees.
Jessica can use the loan to purchase better items that will make cooking easier. She could buy things such as deep-fryers, ovens, dishwashers, and grills. These items will lead to increased efficiency and ultimately increased profits.
Everyone has a smartphone in their hands, so why not be there too?
It is crucial that businesses take advantage of technological advancements. More often than not, these advancements make the process of running any business easier. This allows owners to focus on other critical areas of the company that requires their attention.
Jessica can do this by hiring a developer to create an app for her business. Clients would make their orders and pay through the app while Jessica would ensure that the orders are processed in time.
This beats the lengthy process of following up on payments every time orders are delivered.
The app could also include a feedback option, and Jessica could use the comments to ensure that she stays one step ahead of the competition.
Marketing is always the answer
Your clients are bombarded with marketing messages from your competitors almost in every place they visit. It is difficult to resist temptations to jump ship in the face of all this marketing.
Running marketing messages of your own reminds your clients why they have stuck with you and also attracts new clients. There are also new methods of marketing online that have the potential to reach up to a million people.
Jessica can hire a marketing team to formulate an online and offline marketing plan that explicitly targets potential clients.
So, what did she do?
Given the options above, Jessica chose to invest her small business loan in staff and production: she hired eight more people and bought better equipment to improve the production process.
Fries and chicken wings were quickly prepared in the deep-fryer while cakes, pies, and buns were easily made in the oven. Within a month, she had got back all her clients. The clients also recommended new clients to her.
Now she’s planning to get another loan to invest in marketing and technology.
Today is the day you decide to grow
There have been many other success stories similar to Jessica’s from people who have taken small business loans. Many of them did not need to get to the point of losing clients or realizing that they will run out of business to take these loans.
What about you?
Will you take a small business loan to scale your business when the danger signs are not yet there, or will you tempt fate by waiting for the storm?