After the housing crisis began, and Wall Street was revealed as having gambled with billions in bad loans, the economic catastrophe was set into motion. Once the controversial bailout was finalized, the banks were saved but got cagey about lending money.
Now the stress has eased a bit and loans are trickling out to enterprising Americans who want to start a business in this rocky climate. In fact, most businesses can get a loan. The question is: Can they manage it?
A loan doesn’t guarantee success; it raises the stakes. You are now under a financial obligation to succeed because it’s not just your money at work anymore. Actually securing a loan in this financial landscape is a feat in itself, but the devil is in managing to use it efficiently and to its furthest extent. Businesses must earn their success; a loan just helps them get started.
The newest marketing initiative for the Thanksgiving sale weekend falls between Black Friday and Cyber Monday. The new addition’s name? Small Business Saturday. By all accounts, Small Business Saturday was a success. But why? Sure, people are willing to support small businesses in this economy, and social media has had a hand in helping these businesses promote themselves. Even without these factors, there must still be an element that set these stores apart. That’s what a successful entrepreneur must accomplish with a loan.
When asked if she made a conscious decision to shop at a local toy store rather than big box retailers, Ashley Smith of Winterville, N.C. stated, “Yah, I mean they have better selections and different items that you would get at a Wal-Mart or Toys-R-Us.” In this case, the discerning factor was the selection, but identifying a niche and understanding the profile of the target demographic will not only ensure success into the future, it’ll save you money trying to figure it out later.
Established businesses will note the Internet has grown into a massive distribution channel, but it is only as good as you make it. Using loan money to launch an online ad campaign is a smart move provided you can come up with a cohesive plan. In order to execute on this you will need to have already defined your market and customers, because online advertising can either cast a wide net or be extremely granular. Your approach could change based on the nature of your business; however, this strategy of defining a market is a popular one because it works.
The Internet also provides an excellent, if double-edged, way to stand out from the crowd. Google created a service called Boost that would leverage small businesses against mega-corporations and even the playing field, at least within Google Maps/Places. That service has since been rebranded as Adwords Express, but it essentially fulfills the same function: giving your business clear visibility in the milieu of place markers that can cloud up a search for “restaurant nearby” in Google Maps. This is a great way to stand out.
Finally, small businesses and large retailers alike have seized upon the incredible phenomenon of deal sites. These sites allow business owners to create an online coupon for their services to entice groups of people to come in – and hopefully come back for more. To that end, the online coupon is a worthwhile way to spend a portion of the marketing budget provided by your loan.
There are numerous ways to manage your loan in a way that will drive revenue, pull in customers and eventually help you pay the loan off. Anyone can get a loan. Few of us can EARN THE LOAN.