Growth is an expected and desired goal in businesses, that is a fact. But growth always comes with pain, the same way your bones hurt when you became a teenager. The more your company’s clients demand, the harder it will be to fulfill those requirements and then you’ll have two options: either you reject the new work load and risk losing a customer to someone bigger that can give him what he wants or grow your operation.
The choice is a no brainer but in order for you to make the leap, you’ll need to have better equipment and more hands to operate it. And if your vaults were overflowing in cash, you would have already invested in machinery so the natural road is to seek small business loans that can help you with the conundrum.
But there are common mistakes that you need to avoid at all costs when you are searching for small business loans to finance your equipment needs.
1. Not planning ahead for the new equipment
After your team, the machinery is the most important thing in your business and you need to take a close eye into its regular maintenance and be aware of what this machine can do and can’t do for your business. Start planning the replacement, upgrade or addition with time. You cannot afford to stop operations because your machines are out of order.
2. Not comparing options, costs and capacities
Buying new things when they are broken is the worst time to shop for them. If you have to shut down regular work because you don’t have the proper tools to do it, the most likely scenario is that you’ll end up buying whatever is out there and more expensive than you should. Desperation is not a good friend. Take your time to shop around, compare suppliers, prices and, above all, think ahead and understand what this particular machine can do for your business. Choose the one that has better conditions and gives you a good ratio between what you need it to do and the cost of buying it.
3. Getting more than you can afford
This goes for everything. Before you shop around for small business loans, make sure that you take a hard cold look into your business finance and projections to be completely sure how much you can afford to borrow. This way, the machine will pay for itself and you can even start thinking about the next big jump. Don’t strangle yourself or your company’s finance by biting more than you can chew.
4. Not taking full advantage of your equipment
If you are already thinking about shopping for small business loans, it is because you want an upgrade, but the job will not be just for the new machinery. In order to have more work and better results, it has to be a team effort. From the guys who operate the equipment to the sales department, everyone has to pitch in to make the most of the new acquisition. If you don’t create a business plan that takes full advantage of your upgrade, you’ll end up hurting your Return of Investment (ROI) by underusing an expensive piece of equipment.
5. Buying something too sophisticated
Here comes a harsh truth, Harry Potter didn’t need the Firebolt to win his Quidditch tournaments, with his old Nimbus 2000 he had enough to compete in school matches. Good thing he didn’t need to invest in that himself. If you are not a ‘potterhead’, the idea is that this shiny new broomstick was for the big sport leagues and he really never used it properly or to its full potential. It was an expensive underused almost literal firebolt. Don’t buy the Firebolt if you only need a Nimbus 2000. This way, you’ll make the most out of a machine that you actually know how to use and take advantage of and you’ll not be wasting money in things you don’t need.Do your homework in researching, planning and asking every single question that comes to mind both in choosing the right machinery for you and the right financial partner because not all small business loans are the same and not all of them work the same way. If you take your time, you’ll reduce the chances for mistakes or panic shopping and in so, make the growing pains more bearable.