The summer is passing by quickly and the Fall is one of the most profitable times of the year for a lot of small businesses. As the economy starts to pick up again there is good reason to believe that this Fall will be one of the most profitable in recent years for business owners. Acquiring a business loan can increase a small business owner’s financial liquidity and allow his or her company the ability to take advantage of opportunities that will surely arise as the season changes. Examining a few common strategies can help business owners understand why acquiring additional working capital can be the difference in having a moderately profitable quarter this season or having one that is extremely profitable and takes a business to the next level.
There are many products on the market with a dynamic pricing schedule. For instance, winter clothing can be very cheap to purchase in the summer heat, especially with record heat waves across the country. This can be an excellent time to purchase large blocks of winter clothing at reduced prices which will allow retailers to sell those products in the fall with larger than normal profit margins. This type of strategy can be very effective with many types of seasonal products.
Obviously it is important to manage your inventory accordingly as there is always the danger of purchasing more inventory than can be sold. That is why you can spread your purchases across several types of products which will let you receive the same type of margins over your investment and further increase the likelihood that you will be able to sell the major portion of your inventory. Purchasing in bulk and out of season is one sure way that business loans can help increase your chances of having a successful business cycle.
Another popular strategy for using additional working capital to ensure a profitable season is to book services now that you will require later. It could be purchasing and installing equipment or machinery, or possibly locking in a construction contract to expand your retail space for the back to school and holiday shopping cycle. Often companies are willing to offer price breaks to businesses that purchase products or services in advance, especially those vendors that are slow during the summer heat. Establishing a contract for products or services in advance is another good reason to acquire business loans in anticipation of seasonal economic shifts.
Building Long Term Success
Obtaining additional funding is not just about making a short term profit or grabbing a few price breaks. It is often the case that a business will be in the position to reach out to new customers and build long term relationships. Having a better price for a product or the ability to offer promotions allows small businesses to not only make their established customers happy, it can also bring new customers in the door that will return again. Taking out a business loan and effectively utilizing the capital is not only profitable in the short term, it can also be a great tool to build a business and give it long term success.
Business loans can help small business owners capitalize on profit opportunities during seasonal economic shifts. Having money on hand in your company allows you to take advantage of profitable opportunities as they become available. Planning and purchasing products or services are just some of the possibilities that exist. Almost every industry goes through business cycles where buying and selling is at a discount, and knowing that these opportunities exist and having the ability to take advantage of them can make all the difference in the current and future success of any company. As the Fall approaches it is a great idea to explore the available discounts in your industry and if you do not have the available working capital obtaining a small business loan can be just the tool that you need.