No small business has money to burn, so when it comes to funneling capital back into the operation it can be a daunting prospect. But you shouldn’t be afraid of investing in your venture (beyond just sweat and tears).
Sometimes you need to spend a little to gain a lot. Just make sure you’re spending money where it counts. Here are some suggestions of things you may want to invest in to help your small business grow.
1. An online booking platform
By investing in an online booking and payment solution for your small business, you can spend less time taking bookings and chasing payments, and instead use those spare hours to ensure your customers get the best service possible. It’s more convenient for them, saves you time and cuts down on cancellations and bad debts. That’s a triple win.
2. Improve your website
If you’ve built up your business mostly based on word of mouth, you may not think a polished, ultra-professional website is all that necessary. But in our technology-obsessed world, it’s important to keep your website modern and fresh.
If you don’t have the time, inclination or technical knowledge to do it yourself, a small investment in a professional team can take care of everything for you. Engage a web developer and designer with experience of what works for your type of business, and a content writer who can craft words that will not only entice people to connect with you, but help you be found organically online, too.
3. Outsource the things you don’t enjoy
In the early days, you do almost everything as a small business owner. But surely one of the perks of being your own boss is you get to decide what you do and what you delegate. So whether you outsource your social media management to a specialist or your admin to a virtual assistant, consider freeing up your time to grow the business by investing in some additional help.
4. Partner with a financial expert
Investing in a good accountant who understands your small business and your industry is worth its weight in gold. Smart accountants who know how to maximise deductions and manage cash flow are often a big part of a thriving business, and they can advise you on the best structure for your business too. Many accountants will also give you access to their accounting software, which will enable you to manage your business’s finances a lot easier.
5. Buy more efficient equipment
It doesn’t matter whether you run a pub, dry cleaning service or burger shop, getting popular means more customers – and inevitably longer wait times. But there are ways to stop customers from turning away disgruntled. Can you invest in better, faster equipment? Do you need to hire more casual staff at popular times? In most cases, a minor investment today can lead to bigger rewards tomorrow.
6. Market your small business
You’ve done everything possible to get your small business up and running – now you just need more customers. It might be time to invest in a more sophisticated marketing strategy, incorporating a mix of modern tactics such as Google Ads, SEO improvements, content marketing, social media targeting and email campaigns. If you operate locally, a good old letterbox drop can also keep your business front of mind.
7. Order more stock of what’s popular
Sounds simple enough – but investing in what’s popular can be a smart strategy. If you consistently run out of a product that customers adore, increase your order. An improved wholesale rate can boost your margin too. You may want to consider investing in a three-month trial of the larger wholesale order and see if it’s worth it.
8. Your own professional development
Running a busy small business with lots of customers to impress and staff to manage means people management should be one of your best skills. But investing in some HR training and business management seminars may be the next step to help you grow.
9. Protect yourself with business insurance
As your small business grows, you will likely take on new jobs, expand to new locations and deal with suppliers you never anticipated at the startup phase. Now’s the time to check your business insurance covers you if anything goes wrong. For example, if you’re expanding to a new premise be sure to check if your policy also covers earthquake damage.
So, you’ve done your due diligence and want to invest in your small business, but you don’t have the capital to do so? Prospa might be able to help. Get in touch to find out how.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.
It’s safe to say that small businesses are the lifeblood of New Zealand’s economy. They account for 97% of all companies, employ 29% of workers and generate an estimated 26% of the country’s gross domestic product.
For the people behind these enterprises, success usually means long hours, hard work and a commitment to the future of your businesses and staff.
And, for most small business owners, that relentless dedication is being rewarded.
New Zealand small business growth: A pulse check
The latest CPA Australia Asia-Pacific Small Business Survey shows a positive trend in the growth of small businesses. Nearly 60% of Kiwi small businesses have grown over the past year, with 63% expecting further growth over the next 12 months.
This comes despite headwinds at home and abroad. Faced with a cooling global economy and cost pressures, the New Zealand Institute of Economic Research recorded that local business confidence dipped slightly in recent months with business owners now showing signs of caution around further expansion.
However, this pessimism may be unwarranted. Export demand remains strong and key domestic indicators are ticking along nicely. BusinessNZ’s recent economic summary points to “solid economic growth”, and the spectre of a capital gains tax has also been laid to rest.
Business groups – including Retail NZ and BusinessNZ – have welcomed the news, which would have curtailed small businesses’ ability to invest in their growth.
For a small business owner with a growth mindset, it’s never been easier to access capital via a small business loan. But growing a business also demands a solid strategy on your people and products, day-to-day functionality and physical location.
These are four of the key considerations for any small business owner thinking about growth:
1. Your people
For the vast majority of businesses, having the right people in place is critical. And, if you don’t have a talented team that’s invested in the business, your growth plans may fall at the first hurdle.
Investment isn’t a one-way street, though, and investment in your employees should be a top priority for you, as a business owner who’s looking to grow. Without a focus on the career development of your key workers, wider expansion may not succeed.
According to the Human Resources Institute of NZ, the loss of a staff member who has been with a company for over a year can cost the business three times that worker’s salary.
Begin by setting goals for your employees and aim to consistently give them a clear purpose and direction, aligned with your growth plans.
Once this is in place, review your training, remuneration and working benefits (such as working from home and flexible hours) on a continued basis.
2. Your products and services
Having a strong product offering, that has potential to grow, evolve and expand, is as critical as having the right people in place. While services that are either embedded into or sold alongside goods also play an important role in trade.
Ensure you have the right technology and processes in place to help you identify cross-sell and new product opportunities.
3. Your functionality
How well are your business processes and functionality set up for growth? Are they well established, tried and tested, and scalable? Or do they need creating and refining?
Many New Zealand business owners are turning to technology to achieve business efficiencies.
In the past two years alone, 28% of businesses have introduced automation technology to help process data, increase productivity, reduce human error and improve the quality of products and services they offer, according to Stats NZ. What have you implemented?
4. Your location
For all businesses, expansion usually involves relocating to larger premises or moving into new territories.
Aside from the physical structure of any new building, it’s essential to consider its wider geographical location. Direct concerns include access to transport hubs, road networks and public transport.
Also, does the location profit from proximity to related businesses? By clustering in one area, similar businesses – and those along supply chains – can increase productivity and profitability through economies of scale.
The tech clusters in Wellington and Canterbury are examples of the positive impacts of similar businesses locating and working together.
Building a small business is as challenging as it is rewarding. But with careful planning and access to the right finance, small businesses in New Zealand can best ensure that any investment – financially and emotionally – will provide healthy returns over the long term.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisers. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.