Growth Opportunities in Denver: Is Your Business Ready?
Questions to ask before expanding your business
What makes Denver a great place for small business? According a recent Paydex market report, the Mile High City remains one of the top four metro areas in the country for creating jobs—making it one of the fastest-growing metropolitan areas in the United States.
This is great news for business owners and employees who focus on growing businesses by providing products or services that resonate with their customers. The trick is identifying potential growth opportunities and ensuring your business is in a position to take advantage of them.
Is Your Business Ready to Grow?
Growth is important because business owners understand it’s essential to keep their businesses alive and thriving. Doing business in a strong market like Denver might make it easier to grow, but can you tell if your business is ready to take it to the next level? Here’s a good place to start:
- Your market is growing: If you’re a plumbing contractor and there’s a lot of new construction in your area, it might be time to add another plumber or two. Leveraging opportunities that present themselves within a healthy market can’t be understated. If business is generally booming, a plan for growth should be part of your strategy for the year.
- You identify complementary products or services to boost profits: There are fundamentally two ways to grow—find new customers or encourage customers to buy more. Successful businesses are always looking for new products or services they can offer their current customers.
- Your customers ask for more: Increasing your ability to accommodate your customer’s desire to buy more is a challenge most business owners hope to face. Whether it’s taking care of new customers or you’ve found a successful product that makes it easy to buy more, this could be a signal your business is ready for growth.
- You’re running out of room: As you add products, services and employees, it’s likely you’ll eventually run out of room and need to either expand your space or move to a bigger location. If you’re feeling cramped where you do business, it could be time to consider growth.
Market factors like those listed above could be a signal it’s time to grow. How do you know if financing that growth makes sense?
Is Financing Growth a Good Idea?
I’m convinced borrowed capital should be used as fuel to increase profits or add value to a business —meaning financing targeted growth initiatives should be on the table. Before you decide whether or not to borrow, ask yourself:
- Do I have a vision and plan for how I will use borrowed capital? Be specific. For example, “I need to purchase a new pizza oven,” is much better than, “I need money to grow my restaurant.” If you can clearly articulate your loan purpose, it will make it easier to determine the type of financing you need and effectively meet your growth objectives.
- Is my business currently healthy with a positive cash flow? Lenders want to know your business is in a position to service debt before they’ll approve your loan application, which means you’ll want to make sure you have the cash flow to make periodic payments. Those payments could be daily, weekly or monthly, depending upon the lender—something to consider before you apply for a loan.
- Do I have a plan to accommodate growth? Talking about it and being ready for growth are two different things. If you’re not sure how you will physically handle the additional growth, it might not make sense to assume the debt to finance it. If, on the other hand, you have a plan and a process in place and all you lack is the additional capital, borrowing could be an important part of your growth strategy.
- Do the numbers make sense? Money is not the answer to every small business challenge, but it can be a powerful tool to fuel growth. Are you financially in a position to borrow? What does your credit profile look like? Does the cost of the loan make sense for the anticipated ROI? Do you have the cash flow to meet the periodic payments? Without these answers, financing growth could be problematic.
Many companies fail because they don’t grow — even in a healthy market environment like Denver’s. There are more business financing options available today than ever before. The local bank remains one of those options, but if you need to respond quickly to growth opportunities or need terms that better meet your business need, a loan online could be a good option. You can usually get an answer within an hour or so and have funds to grow within another day or two.
About Ty Kiisel: Ty Kiisel is a small business finance professional, author and marketing veteran with over 30 years of experience. Ty has been writing about small business and small business finance for OnDeck since 2014. He endeavors to make small business lending accessible by weaving personal experiences into a regular discussion of one of the biggest challenges facing small business owners today.