How your business can benefit from a retail loan
Retail loans for new stores are common for a variety of reasons during the first few years of business. During the start-up phase, a large amount of funding is needed to execute a plan. Almost everything needs to be bought upfront before doors can even be opened. That’s a lot to ask of a store that can’t bring in customers – and revenue – yet.
Once customers are coming through, there still might be bumps to smooth out regarding final bits and pieces to buy, inventory to manage, and staff to hire. And then when you least expect it, your equipment might break down.
Whether building your business, fixing or replacing equipment, or preparing for busy/slow seasons, retail businesses often find themselves using an unsecured loan to progress their business strategy and combat insufficient growth. Further motivation might be more focused around building a strong credit history for your business so you can separate your personal and professional accounts. Or it might be to have peace-of-mind that if unforeseen expenses popped up (because things tend to break at the worst times!), you’d be able to cover the costs.
We’ll go into a bit more detail on a few common reasons why people take out loans for their retail business:
4 Reasons why your retail business needs capital?
1. Business Fundamentals
a. There are a lot of costs hidden beneath the surface when it comes to running a retail business. You will need a lot of resources at the very beginning to establish your business since you’re starting from scratch. Everything from toilet paper to security systems – you get to make a lot of decisions at first. Don’t cut corners on important elements to your business because you don’t have the money.
2. Marketing: Developing online marketing strategies
a. It’s pretty hard to make a profit if people don’t know you exist or where you are. Factoring a strong marketing campaign into your budget is a must. Be where your ideal customers are – both online and offline.
3. HR/Staffing: Staff, Training, Recruitment & Development
a. There is a lot of pressure to succeed when you’re a one-man-band and wearing all the hats. Hiring staff to support you can make your life easier and help your business scale. Because of this, offering competitive wages and spending the resources to train the right employees properly needs to be a priority. Bad employees can cause more harm than they’re worth… but on the flip side, a great team can make anything seem possible.
4. Retail Equipment Financing
a. Depending on your retail business and the products or services you offer, there’s a good chance you’ll be buying some expensive equipment. Similar to the point made earlier, make sure you invest in the right equipment and get adequate financing or line of credit so you’re setting your business up for success. This includes businesses that are a couple years into their store and ready to upgrade or expand. Your equipment is an important part of your ability to provide quality services, and taking out an equipment finance loan can make that difference in setting you apart from your competition.
Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at January 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.