Every business needs finance. It’s practically a fact of a business owner’s life. At some point, your business will want to grow, and you’ll need the funds to make it happen. However, there’s a prevailing myth about what comes with finance that we’d like to talk about. That myth is the idea that every business looking for finance is also looking to expand in size.
If an existing business is looking for finance, it’s a reasonable assumption to make that it’s looking to try and grow its client base or increase the services it can provide to its existing base. You don’t go looking for funds if they aren’t going to be used to benefit the business. However, there are plenty of ways for a SME to increase their client base without growing in size – upgrading existing systems, for example. So why is there this assumption that finance will always be used for staff expansion as well as business?
Well, it seems to stem from a prevailing belief that every SME is always looking to become a big business. There are plenty of businesses that are happy being small. Your average local cornershop, for example, probably isn’t too concerned with trying to make itself a rival to Sainsbury’s. Nor is trying to use finance to fuel expansion necessarily the wisest course for a business. Running a 10-person company is a very different experience and set of challenges to running a 3-person one.
Businesses often feel pressured when looking for finance to find a way to make their company bigger, when this might not actually be the right option. Some businesses might benefit from being “tall”, not “wide” – being able to provide a range of high-quality service without the extra faff that comes with larger businesses. Others might have more profitable uses in their existing portfolio to put finance towards!
We’ve helped plenty of businesses with finance that might not be used for expansion purposes. To give an example:
Even with the constant pressure on businesses to grow, there’s still always other options – we’re here to help businesses find the finance option that works right for them!