Demand has risen for various types of SME lending as more Aussies are self-employed and running their own business enterprises. To grow and expand, businesses require additional cash flow for equipment or rental leases, repair of or new equipment, vehicles, property, and marketing costs. This is excluding normal operating expenses such as staffing, general operational business cost, and stock.
Peaks and troughs are part of a business’ journey, however, the past couple of years have drastically changed the landscape of SME business. Small business owners have had to adapt and plan ahead in case of any changes in 2022 and beyond.
The great thing is that SME lending has also become more flexible for business owners. Lumi moves with the needs of customers and has created some great benefits for business owners. Having a business loan set up can help your business prepare for any potential future concerns.
So is it beneficial for a small business to invest in SME lending?
Yes! Growth doesn’t generally happen overnight for small business owners, we wish! However, a solid strategy and thorough planning is required for successful and effective SME growth. A business can experience gradual, slow growth or alternatively can find itself growing too quickly!
We explore ways to not only increase business growth with SME lending but also identify ways to enhance sustainability in any industry.
What are some ways SME lending can support your growth in 2022?
Grow with your target audience:
Having an adaptable and flexible approach to marketing and operations can increase a business’s success. It’s no secret. Flexibility has been a significant factor over the past two years, as COVID-19 restrictions have been put in place, forcing business owners to adapt. SMEs were required to rapidly adjust their operating hours, menus and restocked to accommodate the changing menus.
SME growth for some may have resulted from updated and improved websites. More and more businesses invest in technology and software to better support the customer, to enable customers to make online bookings and purchases. One way that you could also benefit from investing in your technology is with Lumi SME lending. Building an ‘evolution target’ could be an idea that will help continuously keep your business connected with customers. The evolution target could comprise of collaborating with your team on the latest technology, resources, and trends. It is important to have the ability to adapt to the demands no matter what your target audience may be.
Provide the customer with what they want:
This may sound like a simple suggestion; however, many businesses can’t meet the customers’ demands. Occasionally business owners can find themselves stuck by promoting the services and stock the customer is just not looking for. Or a business could completely miss serving a customer due to operating limited or unsuitable hours that just don’t match the customer’s availability.
For example, it’s the middle of winter for a chocolate shop in a high tourist area. This particular chocolate shop is famous for its ‘hot chocolates’. This business really needs to increase opening hours and invest in additional chairs and tables. The chocolate shop decides to invest in SME lending and obtain a line of credit. The line of credit is for $20,000, they draw down on $5000 to purchase new chairs, tables, and resources. They also have enough to cover staff members’ additional hours. They now only pay interest on the $5000 they have withdrawn. When they repay the $5000 they will cease paying interest. They choose to use the line of credit as their SME lending solution as they have their highest income seasonally.
Incorporating a continuous business plan:
A flexible business plan provides a blueprint to achieve SME growth. A business plan will additionally assist you to know and understand your cash flow and whether a business loan will be beneficial to facilitate your planned SME growth. Regular check-ins could allow you to set up a weekly or fortnightly review is all part of having a continuous business plan. Which will constantly keep you on track with requirements and current trends.
Keep track of all expenses:
Keeping track of all the expenses of your business can be part of your business plan and is a fantastic way to stay on top of cash flow. For a business to grow and continue to grow, cash is needed, as we know. A great way to do this is to know exactly where the money is going. Incorporate a system to enable you to manage and monitor expenses and incomings. Another idea would be to contact your service providers or suppliers to find out if they are offering any promotions or be willing to provide you with a discount. Doing this from time to time will keep your overhead costs working for you.
Reduce costs in the office:
One way to reduce costs n the office could be to encourage staff to bring their own coffee mugs or keep cups and reuse them throughout the day instead of using single-use coffee cups. Investing in more sustainable options such as energy-saving bulbs could save a lot of money each year. You could consider going paperless or even reducing the reliability of paper resources. Could your office go entirely paperless? Reducing power consumption is another way to incorporate more sustainability in the office. You could instate a policy to turn off lights where possible. This will not only save energy but will save your business money too!
Plan for the unexpected:
Choosing a lender such as Lumi will help you stay in control of your finances when the unexpected happens. Lumi understands that sometimes things don’t always go to plan. To support their customers better in 2022 they have introduced Australia’s first interest-free loan Payment Holiday. It allows you to pause your loan repayments for 6 weeks without interest accruing.
If you would like to further explore how SME Lending can enable your SME to grow, apply for funding options by getting in touch with one of the Lumi team today. You can call one of our team members at 1300 00 LUMI.