Get more funding
If your business is up and running but needs more capital, you can rely on familiar options. However, funding an existing business still requires slightly different preparation.
- Prepare to request more funding
- Choose your funding source
Prepare to request more funding
Anyone who gives you funds wants to feel confident that their investment will pay off. Prepare a business case and financial statements to convince lenders, crowdfunders, or investors to fund your small business.
Make your business case
You’ll need to make a solid business case for more funding. Produce a short statement with the total requested amount and specific reasons for it.
Maybe your business is cyclical — like construction or education — and could use funding to get through expected slow periods. Or maybe it needs capital to invest in new machinery or launch a product line. Whatever the reason, update your business plan to include this stage of funding.
A business case should give assurances that new funds won’t be mismanaged. Include descriptions of your management team to highlight their skills and expertise.
Prepare financial statements
Display that your business is doing well with financial history statements. Show how your business has grown by reporting revenue, expenses, and profit over time. If you don’t have a history of positive growth, explain why more funding will allow you turn it around.
Determine how much your company is worth today by performing a business valuation. This is the same process you’d go through if you were planning to sell your business. Valuation methods vary, but you can do a self-evaluation or seek out a qualified business appraiser.
Show how your business will grow in the future with a forecast. Your business forecast can be based on intuitive judgement, quantitative analysis, or both. Show your projected revenue and expenses, and clearly explain how you arrived at those estimations.
Connect with a local NBSSI resource center
Meet with local experts, counselors, and business mentors at a local NBSSI resource center if you need help preparing your business to get more funding.
Choose your funding source
Get loans, credit, or crowdfunding
Additional funding options for existing business are similar to funding options for a new business. You’ll have the same general set of options, which include small business loans, grants, and angel investment.
Existing businesses have the advantage of an established financial history with credit reports, business bank accounts, and internal financial reports. Lenders, investors, and even crowdfunders can use that information when they decide whether to fund your business.
Sell ownership in your company
If you decide to sell an ownership stake of your company, your business structure will determine your options. Remember, whenever you sell ownership in your company, you dilute the ownership of current owners.
An LLC or a partnership can accept new members and give them a percentage of ownership in exchange for a capital investment. Just make sure you comply with your articles of organization and operating or partnership agreements.
Corporations can sell shares of the company, so long as it’s done in compliance with your articles of incorporation and bylaws.
Expand to new locations
Once you’re ready to expand, update the marketing plan and confirm that your business is financially prepared. Then, make sure to comply with all laws, rules, and regulations in the new business locations.
- Prepare for a new market
- Legal steps to expand your business
Prepare for a new market
First, update your marketing plan with your new location in mind. Think about your target customer, sales plan, and competitive advantage. Add up any additional marketing and sales costs. Make sure your updated marketing plan is just as thorough as your initial plan.
Compare your business to the competition, learn about the local market, and get a sense of the advertising market.
Next, review your business finances. Build a forecast that projects estimated costs and estimated revenue for your new location. Take a close look at your balance sheet to make sure you can cover the costs of expanding. If you don’t have enough capital, you can try to get more funding.
Legal steps to expand your business
Expanding your business to a new town, city, or region isn’t very different from opening a new business there. You’ll want to make sure you register your business with the right agencies and pay the appropriate taxes.
License, permit, and zoning rules
If you already have a permit or license from a government agency, check with the issuing agency to confirm you can legally operate in a new region.
If you plan to expand your business to a new country, you might need to file for foreign qualification in that country. This process notifies the country that your business is active there.
Check with country’s appropriate authorities to find out foreign qualification requirements and fees.
Pay taxes in new locality
If you do business in a new region, you’ll typically need to pay taxes and annual report fees to local government authorities.
There are two primary ways you could expand your business with franchising.
The first is to buy a franchise, which is similar to buying an existing business. This option tends to cost more upfront, but can be less risky than trying to start from scratch.
The second way is to build your own franchise. Businesses that are good candidates for franchising have a few traits in common.
- Product or service is superior and appeals to potential business owners
- Concept and operations are easy to teach
- Business is easy to duplicate in new markets
Government has requirements that must be met in order for you to sell franchises, so you may want to hire an attorney. Once you’ve begun franchising, government remains active in the relationship between you and your franchisees by monitoring territorial rights or limiting the transfer and renewal of your franchises.
Franchising has more costs than many other types of businesses. You’ll probably need to pay lawyers, accountants, and advertising staff. Don’t forget about training the employees and building systems you’ll need to run the franchise.
Export goods to increase your profits, reduce market dependence, and stabilize seasonal sales. Connect with NBSSI’s resources and partners to get help exporting.
Benefits of exporting
More than 96 percent of consumers live outside Ghana, and a large percentage of the world’s purchasing power is in foreign countries. If you’re a small business owner, you can work with the National Board for Small Scale Industries and the Ghana Export Promotion Authority for your trade needs.
It may be easier to expand your market than you think. Even small businesses can get into exporting with the help of mentors and modern technology.