Anyone searching for optimism in 2017 should look no further than small businesses around the US. A Survey was conducted last year to gauge how small businesses are planning to expand, and the results found that small business owners are far more confident in their future than the year before.
Researchers surveyed over 100 small business owners, from restaurants to real estate to retailers, in 33 states. They determined that 87.5% of small businesses are investing more in their businesses than in 2015. Of the business owners with investment on the horizon, 91.4% of them intend to borrow additional funding.
When asked how they will spend their funding, the business owners were revealed to be focused on one of four investments: marketing, equipment, new hires, and physical expansion.
Here’s why each of these investments could prove extremely beneficial in 2017:
Despite the undeniable value of marketing in today’s business climate, just 38.3% of small businesses looking to borrow additional funding said the funding would go towards marketing initiatives. Details of these initiatives are unclear but any smart business owner would invest in hiring a digital marketing team, either temporary or in-house. Countless reports have confirmed that an increasing amount of shoppers are using search engines and social media to determine what to purchase and where to take their business. Digital marketing teams can maximize your company’s chances of appearing on the first page of a Google search query, build brand awareness through social media, and make sure your advertisements are targeting the type of Internet users most likely to buy your product or service.
Marketing initiatives often take time to pay off but business lending companies like United Capital Source offer funding programs that do not require fixed monthly payments beginning immediately after funding is distributed. Merchant cash advances, for example, supplies funding today in exchange for a percentage of future credit card sales. You could fund your initiative to solicit a surge in business within the coming months and then pay off the majority of the merchant advance when your investment begins to produce sales.
The survey also discovered that 82.9% of business owners plan on purchasing new equipment in 2017. The most popular choices were industry specific items, vehicles, and software, which was on the to-do list of 53.7% of business owners. These decisions appear to have been influenced by Congress’s passage of Section 179 in December of 2015. Section 179 reportedly allows businesses to write off up to $500,000 in qualifying equipment the same year in which it is purchased. Another probable factor is the emergence of accounting software, which dramatically simplifies bookkeeping and displays financial data on a dashboard in real-time, saving you from having to print out spreadsheet after spreadsheet.
3. NEW HIRES
Changing times call for new skills, and this concept may very well be the reason 63.1% of all small business owners are taking on new hires, 48.8% of which will be new full-time employees. Of these 63.1% of business owners, 31% will borrow funding to increase staff. New positions that need to be filled could include a social engagement manager, website developer, or a digital marketing specialist.
Operations might slow down while you are interviewing and training new hires but alternative lenders offer small business funding programs specifically tailored for this dilemma, most notably a Business Line of Credit. This program supplies enough funding to cover day-to-day operations and monthly expenses for a relatively short period. It is similar to a credit card in that you only pay interest on the cash you borrow while you are borrowing it. Once the balance is paid you no longer pay interest and can use the line of credit for your business when you need it in the future.
A business line of credit is ideal for seasonal businesses, which experience significant increases and decreases in business during certain times of the year. Such businesses often take on new hires to neutralize increases in business that take place during the holidays or summer. The busy season, however, follows the slow season, when sales are down. But with a business line of credit ready, you could take your time finding the right candidates and training them without worrying about paying bills or employees at the end of the month.
4. PHYSICAL EXPANSION
New or additional locations will be sought out by 43% of small businesses in 2017, with 22.3% of them doing so via small business loans. Location is a major factor for many industries, such as retail or food service. These industries continue to prove that the right location can almost instantly put a previously-unknown business on the map. Other industries might be securing new spots thanks to the increasing availability of office space for startups. These buildings, or “incubators,” supply a great deal of space for a fairly affordable price and are often utilized by dozens of businesses at a time.
But no matter the price, any location needs to be secured before another business beats you to it. Alternative business lenders are well-aware of this necessity and can approve funding programs in under 24 hours. Funding will reach your bank account in a matter of days, allowing you to immediately put a down payment on that new location. You’ll also be able to run your business smoothly while adjusting to the change, which can be very expensive considering the high rental fees of the busiest areas in a community.
AND THE BEST NEWS OF ALL…
While it’s undeniably refreshing to learn that small businesses are refusing to remain stagnant, by far the most important takeaway from this survey was that 67.6% of business owners said they were seeking funding from alternative business lenders as opposed to traditional bank loans. This suggests that more and more business owners are finally accepting that lenders like United Capital Source are the key to obtaining a highly-affordable business financing program with flexible terms. The majority of business owners have spoken: Alternative business financing will be the number one reason small businesses all over the US thrive in 2017!