Despite the ongoing impact of the COVID-19 pandemic, 2021 has been a year of hope for many small business owners. Bank of America’s Small Business Owners Report reveals that entrepreneurs are regaining their economic confidence, with 60% of respondents expecting to see revenue growth through the end of the year.
As we approach 2022, you may be looking for ways to improve your bakery operations to increase your revenue or offset losses. Working capital can be the key to providing things like additional manpower, increasing inventory, or equipment upgrades. Whether your goal is to increase cookie production, open a new brick-and-mortar bakery, or purchase delivery cars, having enough cash on hand can go a long way toward long-term growth.
If you’re not sure whether or not getting capital is the right move for your bakery business, we’ve gone ahead and identified some of the most common signs that you’re ready to fund growth.
8 Common Signs Your Growing Business Needs More Money
1. Your equipment can no longer meet customer demand
Receiving a huge number of customer orders is usually a good problem, unless you can’t actually fulfill the order. Funding can be allocated to upgrading equipment – whether it’s to repair or replace existing equipment or expand what you have.
Moreover, today’s advanced technology offers tremendous ways to alleviate time-consuming administrative functions such as bookkeeping and accounting. For example, equipping a company with a secure point of sale system will upgrade the way orders are received, recorded and managed.
Better equipment and technology always comes at a price, but the rewards are well worth it. You no longer have to spend hours doing administrative work manually, you can instead devote that time to things like baking, creating new recipes, and marketing.
2. You are understaffed
As a bakery owner, you know that the holiday season sees a spike in orders. You may be well-equipped with the best tools and equipment, but you lack the manpower to meet the surge in demand in the peak season.
If your employees really feel the burden of increased demand without the necessary support, they may start looking for work elsewhere. Funding can be allocated to hire more people, either permanently or for the busiest seasons.
Take the time to assess the roles and responsibilities of your employees. If you have one person baking and taking orders, And Managing the logistics, it might be time to hire someone who can only focus on the logistical end and take that burden off the baker’s shoulders.
With more money under your belt, you can increase your payroll. This money can be used to pay for temporary or full-time employees, as well as outside talent that can handle taxes, advertising, or insurance coverages.
3. You have a growing demand from customers in a new market
If your first actual bakery is gaining traction and you are receiving inquiries from different cities outside of yours, it may be time to expand your operations. Business expansion means different things to different owners. That could mean renovating an existing space, getting more parking space, or opening another brick-and-mortar bakery.
If you have the opportunity to expand your reach and open up a new commercial space in a different location, money will be required – but it need not be a hindrance. Getting the right small business loan can enable you to introduce your products to a new market.
If you are thinking of opening a new bakery, ask yourself the following questions:
- Is there a large enough market for your business and the products you offer?
- How many bakeries are there already in your location?
- Can the new market bear the price of the goods?
- What are the operating expenses involved in maintaining the new branch?
- How much money will be required for its preparation?
Knowing the answers to these questions will help guide you as to whether or not this is the right time or place to open a new site.
4. You have a lot of debt
Debt takes a huge financial burden on business owners, whether you’re running a small bakery or a huge business. It’s hard to make growth decisions when money is tight. In addition, having an almost negative cash flow can damage your credit score, which could be detrimental if you need to apply for loans in the future.
However, getting a loan to pay off your existing debts can be really beneficial. This is also known as debt consolidation – when you get extra money to pay off outstanding balances. Doing so allows you to pay lower fees and reduce additional fees.
Debt refinancing is a great way to pay off all your loans with terms and conditions that work in your favour. This also prevents you from further damaging your credit rating because you are only paying one loan instead of managing multiple accounts. For those who want to approach 2022 with a cleaner slate, taking out a loan to pay off debt is one surefire way to maintain a healthy cash flow.
5. You don’t have enough money for emergencies
As a small business owner, you know firsthand how difficult it can be to navigate the evolving effects of a pandemic and maintain operations at such an unprecedented time. While some owners have been able to use government funds to support their operations, many have had to shut down permanently.
A wise owner of a growing business knows the value of keeping an emergency fund. Emergencies, by their nature, are unforeseen. We can’t predict when it will happen, but we can prepare for it when it does. Perhaps your business is not ready to grow now. You may want to have funds for the sole purpose of providing capital in an emergency fund so that you have it as a cushion when needed.
A business line of credit is a good resource for this. It allows the borrower to withdraw money from his account at any time, and you only need to pay interest on the money you withdraw. If you don’t need the money, you can keep the rolling money in your account and no cent will be charged to you.
A business line of credit is ideal for unforeseen circumstances such as immediate equipment repairs or when there is a sudden need to increase inventory. The money can also be used to pay contract professionals you hire for projects such as marketing or interior design.
6. You see the need for a delivery car
Providing delivery services can expand the reach of your customers, especially in this post-pandemic world where so many people are working from home. If you are not able to afford a vehicle to fulfill the deliveries yourself, financing can be allocated to make this purchase.
Many small businesses rely on third-party services like Uber Eats to make deliveries, but you lose quality control when outsourced. Items may not be secured properly or vehicle temperatures may not be optimal for transportation. If a cake arrives upside down or a cupcake arrives with liquid frosting, you may lose the customer permanently.
Having a delivery vehicle for your business is beneficial to your line of business because your products – often purchased for special occasions – require a certain level of care in transporting them. On top of that, you’ll have control of your delivery schedule to ensure that items arrive not only in top condition, but on time.
7. You don’t have enough clients
Reaching more customers is an integral part of growing your business. according to interested in trade, “We’ve delved into the consumer era for a while, but the pandemic has accelerated their takeover, and made them firmly responsible for 2022 and beyond.”
need to specify what or what This is what your target customers want (eg custom baked goods, faster delivery times, etc.) and where They are. This could mean physical – looking for opportunities to collaborate with ambitious brands or being at great events – but it also means digital. Younger consumers rely on social media for seemingly everything, which makes it the perfect place to advertise and market your business and products.
If you’ve never set a budget for marketing and advertising, now is the time to do so. You can use the funding to hire a marketing or social media consultant to help you strategize for ways you can effectively reach your target market and properly implement your plans.
8. You are behind the competition in terms of experience
The key to progress in business and in life is learning new skills. However, signing up for continuing education can be costly, especially if you’ve just opened your first bakery recently.
Not to worry, you can use outside money to upgrade your skills or learn new baking techniques. Upskilling ensures that we keep up with the industry trends that customers are looking for – whether it’s innovative recipes, popular seasonal flavors, cultivated desserts, or great new decorating techniques.
Aesthetics aside, there may be new baking techniques that will make the job easier, or specific ingredients you can use to reduce costs. If you have enough funds to pay for additional education and training, you will be more prepared to provide better customer service.
Having more money changes the rules of the game
As a new business owner, there are opportunities for growth around you, but you will need capital to take advantage of them. Setting business goals lays the foundation for your future growth, but finance is what allows you to reach those goals and advance your business. With Small Business Loans, you will be in a much better position to expand your restaurant and thrive in 2022.
About the author
Matthew Gilman is a business finance expert with over a decade of experience in commercial lending. He is the founder and CEO of SMB . compass, a specialist finance company that offers education and financing options to business owners.