How should you use your first loan for business?
A loan or financing can be a great support tool for a small business to take the next step and grow. If you are thinking about acquiring your first loan or you already obtained it, the recommendation is that you use it to achieve “strategic objectives” that generate a great impact and truly achieve your business.
According to our “Report on credit and growth of 2019”, only 40% of entrepreneurs focus their resources on strategic actions such as using technology or attracting quality human talent. So next, we will give you some suggestions in which you can invest your new capital and thus ensure a scalable future.
# 1 Attracting talent to strengthen the business
The attraction of talent is important in the growth of a business, because when you find people who bring great knowledge and skills, you can develop a better product, service or even create a more innovative business model. Capital is essential to cover the costs required by an action such as attracting talent and not losing liquidity; since in addition to the payroll, expenses are added as the tools they need to develop their activity, the benefits you intend to offer them (medical expenses insurance, bonuses, dining service, transportation assistance), among others
# 2 Implement technology to improve processes
Another option in which you can take advantage of the money you are getting, is in actions that improve internal aspects of the operation of your business. For example, the use of technology to streamline processes such as production can help your products or services have a higher quality, take advantage of the raw material or even increase the capabilities you have to cover a larger market.
In terms of technology implemented in administrative processes, you can facilitate the work of your employees and their performance increases due to the opportunity to automate tasks with software or systems designed for the needs you have.
In a study conducted, a leader in technology and network services, it was announced that that implement technology can increase their profits by up to 30%.
# 3 Accelerate business sales
When the sales cycle of a business is not so optimal, revenues may fall short to meet the usual obligations and expenses that an has and therefore limit their growth. If this is a situation that your business presents, you can invest your credit in accelerating the cycle by obtaining enough inventory to satisfy your customers at the moment, implement various payment methods, improve the collection model or even develop a value proposal stronger than you can differentiate yourself from the competition.
Finally to make sure that you will use your first loan correctly, you must also establish a plan in which you define the goal you want to achieve, what you need to do it, a budget including the amount obtained by the loan and the specific actions you must perform. This will help you have more control over the use and make the most of it.