Since the beginning of the covid-19 pandemic, small and medium-sized companies have been affected. According to CNBC, during some months of the year 2021, SMEs closed reached 23% of the total in the United States, some did so permanently, and some others had the possibility of reopening.
According to information from the World Bank, small and Medium Enterprises (SMEs) represent 90% of companies and generate 50% of jobs worldwide. Meanwhile, in the United States, more than 30 million companies of this magnitude are responsible for developing two-thirds of the jobs in the private sector.
The situation during 2020 and 2021 has required drastic measures to obtain business financing. Business owners have found it necessary to access some business loans to inject liquidity into their companies and not lose the wealth they have built with so much effort.
Why are SMEs accessing other funding options?
Some of the pandemic’s effects were addressed by SMEs using government programs such as the Payroll Protection Program. Unfortunately, the main objective of this support was to maintain payroll payments, not to keep businesses afloat. Against this backdrop, business owners have turned to financial products such as small business loans to obtain capital to deal with the crisis.
As vaccination processes advance worldwide, businesses must achieve pre-pandemic level revenues and profits. Getting back on track and making profitable, sustainable growth businesses is the primary goal of SMEs worldwide. Here are some tips on how to achieve these goals by 2022.
How to make my business profitable in a balanced and effective way?
● Eliminate tasks and processes that do not generate value for your company
Evaluating all of your company’s processes will allow you to identify capital wasted or misused in activities that do not bring revenue or value to your organization. You should spend every penny wisely.
● Adjust your prices
Profit margins on your products or services could change from the onset of the pandemic. Analyze your production costs or any variable involved in setting your prices. Increasing your costs to the customer adequately will allow you to give a better service to your consumers.
● Analyze your sales cycles
Achieving shorter and more effective sales processes is an excellent alternative to reduce costs. Use digital sales channels to earn income without so many expenses.
● Negotiate with suppliers
You will always have the possibility to improve your agreements with suppliers. As a result of the pandemic, all companies understood the importance of making alliances. Propose new agreements to your suppliers based on a win-win philosophy, and you will find positive results.
● Constantly monitor your fixed costs
The cost of fixed expenses in a company is often taken for granted, without considering that you can always find more affordable options without sacrificing quality. Keeping this allocation in mind constantly will help you find offers or promotions reflected in your list of expenses.
Requirements to access a loan to grow my business
Making growth processes within any company means investing time and money. If you do not have the necessary capital to hire advice, specialized services, or personnel in charge of this project, access small business loans offered by online lenders to achieve the ideal company.
Most financial institutions require a minimum number of years of operation, minimum income, a credit score over 600 points, and documentation proving ownership of the company. Research and analyze the different options in the market until you find the one that suits your needs. Look for companies that really solve all your doubts; the best decision is the one that is made in an informed way.
After the storm comes the calm, the whole world is beginning to emerge from the economic crisis caused by the covid-19 pandemic. SMEs are a fundamental part of every country’s economy, and their stability directly impacts the entire population. Use tools such as small business loans and focus all your efforts on implementing actions to achieve pre-pandemic figures and even improve them; your business, your family, and you deserve it.