As our communities recover from the COVID-19 pandemic, it’s important for small business owners to position themselves for the economic rebound. Consumer confidence has long been a key driver of the economy, and as the pandemic ends, it’s likely that spending will increase as consumers return to their normal routines.
As a small business owner, you’ve likely proven your resilience through tough times. If you’re ready to pivot for growth, consider leveraging a business line of credit, which allows you to withdraw funds as needed up to your approved limit. You’re only charged interest for the amount you withdraw and when you make repayments, your funding becomes available again.
If you want to scale your business, consider the following four uses of a business line of credit:
1. Hire more employees
Employees are likely one of your largest expenses, but you can’t scale your company without investing in manpower. Many small businesses have delayed hiring because of budget concerns. But if work is picking back up, it might be the right time to invest in your workforce. Ramping up hiring will help you handle increased demand and take care of your customers.
2. Stock up on inventory
Inventory is a critical need for small businesses — especially if you experience quick inventory turnover or you operate a seasonal business. Having a business line of credit will help you quickly respond to conditions in the market. For example, if you need inventory before obtaining positive cashflow or you find a great deal from a wholesaler, you can act decisively.
3. Step up your online marketing
During tough economic times, many companies are quick to cut their marketing activities. However, as consumers resume their normal spending patterns, it’s important for your company to be top-of-mind. Access to a business line of credit can help you maintain essential marketing functions and boost strategies that prove effective.
Although there’s many different marketing channels to consider, it’s noteworthy that many small businesses have heavily invested in their digital marketing. And for good reason: According to RetailDive, 87 percent of customers start their buying journey online. Before launching any digital marketing strategies, consider starting with a comprehensive marketing audit, which will identify which channels are most likely to reach your prospects.
4. Win a major contract
To be successful, it’s helpful to focus on opportunities with the greatest return on investment. Winning major contracts can be profitable, but may require upfront investments in supplies, equipment and employees. A business line of credit can help you meet these requirements without cash flow challenges.
Some of the most valuable contracts are through the federal government, which sets aside contracts specifically for small businesses. The U.S. Small Business Administration reports that the U.S. federal government is the largest buyer of goods and services in the world. Despite the upfront costs of winning a contract, landing repeat business from the government could generate long-term gains for your business
Even if you’re not yet ready to scale your company, a business line of credit provides a valuable buffer from unexpected challenges or cash flow challenges. Leveraging this financial tool will help position your business for success as the economy recovers.
Sarah Thompson is a business banking relationship manager based at the Twin Falls Eastland branch of Zions Bank, a division of Zions Bancorporation, N.A. Member FDIC. She can be reached at 208-863-8469 or firstname.lastname@example.org.