New technologies have proven to be invaluable in the business world. The sheer range of tech available that can help streamline business processes, cut costs, improve customer service, and boost in-house collaboration are seemingly endless. While there are free options for many software types, businesses should always look at the benefits and features of the paid-for options. Shifting from freemium to paid software helps if your business is scaling, teams are growing, or use cases have evolved. In any of these instances, the software can change the potential of a business, but funding the purchase of new software can be costly.
Costs of owning new software may vary from the initial upfront purchase to monthly, or per transaction service fees. Then, integrating the software with your existing systems can take considerable effort from internal and external resources. Each of these steps toward greater business productivity can decrease net cash flow, especially for new businesses.
If financial constraints are tight, then here are some ways to generate the additional funding that can pay for the software you need without putting your business at risk.
A business loan can be used for a variety of purposes. Using a loan to buy the software that will dramatically improve your business management is a good option to consider. While banks and other traditional lenders are proving harder to get loan approval from, online lenders are proving to be a valuable and cost-effective solution for business owners. Lenders like biz2credit can make it a quick and easy process to apply and get approval for a business loan that can help cover costs quickly. If your profits are not substantial enough to justify buying new software, then a business loan should be one of the first options that you consider.
Using Credit Cards
This is a more high-risk option but it is surprisingly common to see in new businesses that have yet to stabilize financially. The dangers of using your credit card to make business payments are many, but the main factor to be wary of is the risk of damaging your credit score. If you do decide to use your credit card to make payments for new software, make sure that you prioritize clearing that debt as soon as possible. Interest rates could leave you digging yourself out of a financial hole that you weren’t prepared for, and that could damage your potential for growth.
If you haven’t made use of an Angel Investor, then they can be very useful. Angel Investors are easier than ever to find, but there are risks. While they will often be more inclined to invest in a good business model that shows promise, they will also expect something in return. Often, this will involve a share in your business. Investors bring both money and business experience to the table, but the cost of losing total control of your business model is too much for many entrepreneurs. Always consider the risks of investors, and never agree to terms that you aren’t comfortable with.
Sourcing new streams of funding can always be a challenge when you are starting a new business. Even for those brands that have already established themselves, freeing up profits to invest in the business can lead to tighter financial management. Make sure that you have a clear idea of your software needs, and never borrow more than you can afford to pay back. Source your funding carefully, and make adjustments to your business plan. That way, you will be able to identify risks and take steps that will ensure your ability to take advantage of the latest software, strengthening your business and improving your potential for growth.