Tuesday, 30th April 2019 | Sales,Marketing,Management
10 Ways to Survive Slow Times
Seasonal slowdowns are a common occurrence for many small-business owners. Here are some tips on how to survive the slow months and make the most of your time until sales spike again.
Spring has finally sprung across Canada! While most of us are excited for warmer weather, many small-business owners are fearing the start of a slow business season. Depending on the nature of your small business, there’s typically a season (or two) when you see a spike in sales and another that represents your biggest slump.
Regardless of when your slow business season takes place, it’s entirely possible for your business to survive–if not, thrive–with a little preparation and planning. Here are some ways you can make the most of a slow business season, and a few ideas on how to survive any slips in sales.
1. Anticipate your small business’ slow months
As a business owner, you know your operations better than anyone. So, looking back on previous years, it should be easy for you to predict which months will see fewer sales. As you plan out each year, avoid basing your sales targets on strictly your best months. Maintain a conservative approach with your budget and spending so that you don’t face a budget shortfall when sales are slowing down.
2. Strategize your savings
If you’ve planned ahead, you should be fully aware of when the slow business season will set in. With less revenue to work with at this time of year, many small-business-owners will need to implement a cost-savings plan, including some (or all) of the following measures:
- Reduced operating hours
- Fewer shifts for employees
- Smaller inventory purchases
- Discounts on excess or aging inventory
Remember: your savings plan needs to account for fewer customers and less revenue. Before you implement the savings tactics above, be sure to forecast your anticipated sales and budget needs based on the activity of previous years.
3. Plan for the rest of your year
When sales are slow, you’re likely to have extra time on your hands. Use this time to plan your marketing activities, budget forecast, inventory orders, staffing plans and more. Using the time you have now can set you up for success when business picks up again.
4. Undertake renovations and other fixes
Many small-business owners fear disrupting their operations with a renovation or upgrade, especially during their peak sales periods. This is why a slow business season is a perfect time to fix up your storefront or office space. If you own a restaurant or service-based business, slow months are also a great time for refreshing your menu and service offerings.
5. Rethink your marketing tactics
Some small businesses just aren’t seasonally relevant, such as landscaping companies trying to operate in the winter, or a snow-plow operator trying to drive sales in the summer. It can be hard to find market relevance, but a little creativity in your marketing will go a long way.
In your slow business season, consider hosting a giveaway that customers can redeem when the season is ripe; this can help your business name to remain top of mind year-round. You could also sponsor an event or hold a contest to ensure your name still generates a word-of-mouth buzz that carries you through the slow season.
6. Optimize your operations plan
Updating your operations and testing the validity of any new processes is something business owners simply can’t do during busy periods. When a slow business season approaches, it’s the perfect time to change course. Take a look at your regular procedures to evaluate where and how you can improve. This can include everything from customer service to accounting, shipping, inventory management and even invoicing.
7. Broaden your knowledge and network
It can be tough to take time off as a business owner. Slow times are the best time to take a day or two away for a conference, course, seminar or another event that will better your business. Not only will a learning opportunity to improve your own knowledge, but industry events provide ample networking options for you to gain partnerships that can better your overall business.
Connect with your local Chamber of Commerce or Board of Trade for details on upcoming events for small businesses in your area.
8. Reflect on customer feedback
Let’s face it: customers are leaving you reviews on Google, Yelp and other social media outlets whether you like it or not. Even though it’s a best practice to respond to your reviews (even the positive ones), it can be tough to carve out the time to do so regularly.
Use the extra hours you have during a slow business season to not only review and respond to all of your feedback, but also implement any changes required if you receive recurring negative comments regarding your products or services.
9. Revisit your website
Even if your website is brand new, there’s always room for improvement where SEO is concerned. A little effort goes a long way when it comes to optimizing your search ranking. A few quick checks you can implement include:
- Ensuring you have title tags, headings and alt-tags on your site
- Updating and implementing keywords throughout
- Fixing any broken links
- Checking your page-load speeds
10. Evaluate your social media efforts
While you’re updating your website, a slow business season is also the perfect time to check in on social media. Even if you have an agency or freelancer running your channels for you, how often are you looking at your ROI?
Now that you have a few extra hours, check up on your social performance and metrics. Ask yourself if you’re reaching the right audiences on the right platforms. If not, consider rethinking your approach to ensure you’re making the most from your investment on social.
When your slow times rolls around, don’t panic. With solid forecasting and planning in place, you should be able to predict when your slow times will occur each year. With this additional foresight, you’ll be able to make the most of your time, ensure you have processes in place to account for any slumps in sales and avoid the fear that can come when sales slow.
Can I get a business loan to buy a business?
Why purchasing a small business in Canada could be beneficial
Purchasing a business in Canada might be a cost-effective strategy to grow your customer base, expand your capacity, or enter new markets. You may even buy a competitor's or supplier's company.
Purchasing an existing firm has several advantages
There are many advantages to buying a business or an established firm. For example, the product or service that the company provides is already well-positioned in the market, the personnel is well-trained, and the supplier network and distribution channels are well-established.
However, if you are purchasing a failing firm, you must first obtain a thorough grasp of the reasons for the failure and then carefully examine if you have what it takes to turn things around.
The maximum amount of money you may borrow to acquire a business
The amount of money a lender is willing to provide for a business acquisition loan varies significantly from one company to the next. The value of the assets you're using as collateral, your cash flow, your credit score, and your firm's financial health are all factors that influence loan amounts. Depending on these characteristics, lenders may provide as little as $250,000 or as much as $35 million.
The lengths of company purchase loans in Canada vary, although they commonly range from three to 10 years.
Financial options when buying a business
There are various methods for getting a loan to buy a business in Canada, so you need to weigh all of your options before deciding on the best financing arrangement.
It is the shortest method since you fund the transaction with your own money. However, in many circumstances, this cash isn't available or isn't available in significant amounts, so you'll need to look into alternative financing possibilities. Read on for a list of options.
Financing from the seller
Some business owners selling their companies are prepared to lend money to potential purchasers. When this occurs, it typically indicates that the seller believes in the business or the buyer's ability to operate the firm successfully after purchase. However, it might also suggest a restricted market for the firm being sold, and the seller is attempting to entice possible purchasers. As a result, you should think about the reasoning behind the seller's decision to finance, as it may affect your negotiating position.
In most cases, seller financing does not cover the entire purchase price. Therefore, you will need to make a down payment as a buyer. However, you can cover the down payment with a secondary funding source, such as one of the other choices indicated in our article. There are no particular qualifications for seller financing because each seller will have their own set of requirements. Some will want to see a decent credit score, although you do not have to be a top borrower.
Getting a bank loan
Banks are typically hesitant to provide money for business purchases. However, you may want to consider this option which allows you to get a small business loan in Canada for various purposes, including acquiring an existing firm. You might also want to look into the Business Development Bank of Canada, which has several long-term funding alternatives based on your circumstances. Financing options specifically designed for the purchase of a business include vendor take-back financing; unsecured loans for intangible assets such as intellectual property, goodwill, and client lists; long-term loans based on the value of fixed assets such as land, buildings, equipment, or shares in an existing business.
Buyout with leverage
The firm's assets you're buying (equipment, property, or inventory) are used to fund the acquisition in this financing arrangement. A mix of seller finance and a bank loan is used in most leveraged buyouts. It is highly typical, as business purchases frequently include various financial sources.
iCapital is one of the most trusted online lenders in Canada offering loans to businesses. You can qualify for up to $250,000 with iCapital in as little as 48 hours. Our application process is fairly straightforward and loan approval is as high as 98%. Connect with us to discuss your financial plans and needs and we will work out the best strategy for you.
Things to consider when buying a business
- Debt assumption: When purchasing a firm, you must decide whether you want to acquire the assets or the entire company, including assets and liabilities (debt).
- Purchase financing: When buying a firm, keep in mind the finances you'll need to manage once you've bought it. After making your purchase, you'll have several financing choices for getting a business loan.
- Self-funding and cash reserve: In an ideal world, a company's activities would be financed by its cash reserves once it is purchased. However, you may need to bring in more money if they aren't adequate.
- Line of credit: When your company has a business line of credit, you may borrow up to a particular amount and pay interest on the amount you borrowed. A line of credit is helpful since it provides your firm with rapid access to cash, up to a pre-determined credit limit, similar to business credit cards.
- Financing for invoices: Invoice financing refers to financial agreements that enable you to finance your company's invoice receivables. Small firms utilize it to boost their working capital and cash flow by fulfilling short-term liquidity demands. Invoice discounting and factoring are the two most popular options.
A loan can be used to purchase a firm from an existing owner in Canada. You can use various financing options to finance the purchase. You should evaluate which funding option will work best for you and then decide whether you should invest in the purchase.
Are you interested in learning more about this? Contact iCapital at 1.877.251.7171 to get a loan to buy a business using our straightforward procedures.
Small business financing Canada ,Management
How large of a business loan can I afford?
When researching small business loans, there are a couple of things to consider. First and foremost, you must evaluate whether or not taking on debt is the best course of action for your company. For example, your company could require extra funding to alleviate the stress of a looming financial constraint during the slow season or fund a new, exciting business prospect.
The second step, which many ambitious business owners overlook, is one of the most crucial aspects of the business loans application process: determining whether or not you can genuinely afford to take out business loans in Canada.
How can entrepreneurs seeking company capital be sure they can afford to take out a small business loan and repay it on time with extra interest? Here's how to figure out if you'll be able to repay your small business loan.
Identifying what your company can afford
Suppose you're just getting started looking for business loans in Canada. In that case, you should figure out what type of monthly payments and interest rates your company can afford before diving into the process. Calculate your debt service coverage ratio to understand what you can afford when a loan is offered.
What is the maximum amount you may borrow for a business loan?
Business loans in Canada can be anywhere from $5,000 to $500,000. With iCapital, you may qualify for up to $250,000 in 48 hours with our 98% application approval rate. Personal factors like credit score, debt-to-income ratio, and business revenue influence the amount you may borrow.
If you have a well-established business, a good credit rating, and a reasonable sum of excess income, you'll be able to borrow more money. On the other hand, if you're just starting out or have a bad credit history, you'll be able to borrow less or may not qualify at all.
How do lenders determine the loan amount?
Across the board, lenders give the most significant loan amounts to the borrowers they believe are the best qualified—in other words, the borrowers that they think will be able to repay these big loans in full and on time. All lenders want to make sure they're dealing with responsible borrowers to avoid losing money.
Banks aren't entirely stranded if borrowers default on their loans because of collateral. Any item that the borrower puts up for the lender to seize if the borrower fails on their loans—such as automobiles, equipment, real estate, accounts receivable, or cash—is considered collateral. In such an instance, the lender will attempt to collect and dispose of those assets to reclaim as much of the loan as possible.
Other forms of collateral include blanket liens, which allow the lender to claim any tangible or intangible asset owned by the borrower, and also personal guarantees. Although most internet loans do not demand collateral, most of them do require a personal guarantee. If the business cannot pay for any reason, you must agree to repay the loan from your assets. Lenders make every effort to reduce risk. But how can banks know if a borrower is trustworthy enough to manage the most significant loan amounts? They'll look at all areas of a potential borrower's business loan application to figure that out.
Business loan application
Your company loan application may be comprised of the following items, depending on the lending institution and the type of business loan you're applying for:
- Business loan request letter
- Bank statements
- Personal and business tax returns
- Profit & loss statements
- Balance sheets
- Your income
- Personal credit score
- Business credit score
- Annual revenue
- Time in business
- Business plan
- Industry type
Banks require all of the information shown above. Banks use this information to calculate your DSCR (debt service coverage ratio), personal creditworthiness, profitability, etc. These numbers give the lender a comprehensive picture of your company's financial health. The bank will use this information to determine the amount of money it will loan your business.
Ways to qualify for more funds
Here are a few methods to qualify for a higher loan—from preparing for government-backed financing to make a significant down payment:
- Collateralize the situation: If you put up collateral to ensure your payments, you'll be able to acquire a bigger loan. Your home, automobile, or company equipment are all examples of assets.
- Don't forget to make a down payment: If your lender sees that you have the capacity to save money and commit to your business, you may be able to borrow more with a higher down payment.
- Pay debts first: If you enter your loan arrangement with a lesser amount of previous personal and commercial debt, you may be able to borrow more money.
- Boost your credit rating. The higher your credit score, the less of a perceived risk you are to the lender, and the more money they may be willing to lend you.
- Wait till your company is more established before making a decision: Once your firm has been active for a time, and your income has increased, you may be eligible for extra money.
Apply for a business loan with iCapital
The amount offered by business lenders and the amount you can borrow is two separate figures. However, to prevent taking on more debt than required, you should concentrate on how much you truly need to borrow for your business.
With iCapital's complete guide to business loans, you can borrow the right amount of money and gain access to it fairly quickly through an easy application process. Contact iCapital at 1.877.251.7171 to apply for a business loan and get the funds you need in 48 hours.
Small business financing Canada ,Management
Business equipment financing: what it is and how to get it
What are business equipment loans?
Business equipment loans can come from various places, depending on your credit history and the type of equipment you're looking to buy. Among these sources are:
- Credit unions
- Online lenders
- Financiers of equipment
Depending on the nature of the equipment, it may be possible to utilize the equipment as collateral for the loan. In addition, equipment loans can often be for lesser amounts than regular bank loans, depending on the type and cost of the acquired equipment; this might make traditional financing a possibility for qualifying small company borrowers.
Business equipment loans have different terms depending on the lender. Most commercial loans have maximum payback duration of seven years, with interest rates varying based on the lender, your credit history, and the amount borrowed.
To apply for business equipment loans at a credit union, you must first become a member.
Online lenders such as iCapital also provide equipment financing. Rates and periods vary based on the lender you pick, just as they do with traditional lenders. Although interest rates may be higher, online lenders are known for their quick replies, often responding within an hour and depositing funds into your business bank account within a day or two – and sometimes in as little as 24 hours.
While loan conditions vary depending on the lender, most traditional lenders will want a down payment, often about 20% of the loan amount. The interest on business equipment loans, like other loans, is tax-deductible.
Should you get a business loan for your equipment?
Regardless of the sort of business, you run, quality on-site equipment can be rather costly. For example, let's pretend you're setting up a restaurant, bar, or coffee shop. While you may be able to cover certain costs on your own, most industrial kitchen appliances (fridges, beverage dispensers, stoves, and so on) are expensive. Also, don't forget about the cost of production equipment. This is where a business loan can help you and your company open many doors. With a business loan, you'll be able to get the gear you need to increase your profit and sales.
Documents required for equipment business loan
To help you qualify for a loan, here's a standard list of items that a lender will ask you for when authorizing a loan.
Personal credit score and company credit score
Lenders will frequently evaluate your credit score and business credit to determine your creditworthiness and the duration for which you’ve run your business.
Your lender will ask for your business address, business name, business license number, and other information to identify your company.
Before approving your firm for financing, a lender will assess your financial health by reviewing specific financial documents to see if you can repay the loan.
- Tax Returns and Bank Statements: Your lender will use these papers to assess your monthly and annual earnings.
- Revenue Statements: Your business's sales records and revenue statements will help your lender comprehend your cash flow, which is crucial in convincing them to lend to you.
Personal financial records
A lender may request your bank statements to evaluate your creditworthiness, especially if you offer a personal guarantee.
Pros and cons of equipment financing
There are several advantages to financing equipment. If the equipment acts as security, these loans may not require collateral. Qualifying for this form of finance may be easier than for other types of funding, especially if you have a newer firm or a less-than-perfect credit history.
However, one thing to think about is what this would entail for your interest rate. If your credit score is near the bottom of the range that the lender typically expects from its clients, you may pay a higher annual percentage rate for equipment financing. The greater the interest rate, the more you'll pay in interest throughout the life of the equipment loan.
How iCapital can help your business
While many types of equipment might deplete your company's budget, this won't be an issue if you pick iCapital to handle your finance needs. And suitable financing isn't the only advantage we have to offer. There are several more reasons to choose iCapital, including but not limited to:
- 5-minute application process
- 24-hour approval
- Up to $250,000 in 48 hours
Small business financing Canada ,Management
A shortened workweek: fad or the future of work?
No longer just the purview of progressive European companies, the concept of a four-day workweek has hit the mainstream in North America through think pieces, research, and the nightly news. While it’s undeniable that the face of work is changing, what’s less clear is whether a four-day workweek will be part of this future. For Canadian businesses, now is the time to acquaint yourself with the pros and cons of a shortened workweek.
A transforming workplace
The idea of a shortened workweek is not new. The concept—which has employees working a four-day week for the same pay, benefits, and to complete the same workload—has been under review in several countries, notably Iceland. The United Kingdom will be piloting a shortened workweek this year and Belgium has announced in 2022 it will begin offering this arrangement to employees who want it.
Better work-life balance, increased productivity, environmental concerns, and the wastefulness of maintaining in-person workspaces are all drivers for the four-day workweek. And according to current data, the scheme is effective in all areas.
Now, as employees are returning to the workplace after a pandemic hiatus, old complaints are resurfacing. Long commutes, a lack of control over personal time, expensive lunches, and the threat of communicable disease all make change attractive.
What's in it for Canadian small businesses?
Use this list of pros and cons to help you determine whether a shortened workweek is a strategy that could benefit your business.
Here are the three main ways a four-day workweek could benefit you:
A great perk to attract top talent
Increasingly, attracting and retaining quality employees is a challenge for employers. The ability to condense the workweek into four days is a big bonus for job-seekers.
An incentive to retain staff instead of increasing pay
If increasing salaries is beyond your means, offering a four-day workweek can be a way to entice staff to stay in the long term.
Better work/life balance means a happier, more productive staff
When your employees are happy, the benefits are multifold. They’re more pleasant and motivated, more likely to remain with your company and recommend it to others, and they’re more effective and productive.
Additionally, a shortened workweek:
- Decreases office expenses
- Reduces commuting time and therefore individuals’ carbon footprint
- Fosters equity in the workplace as it’s a more accessible model, particularly for people who also have childcare responsibilities
The four-day workweek might not be appropriate for every type of business or every kind of employee. Here are some considerations:
It can be expensive
Paying employees for hours not worked can be a payroll puzzle. This is especially a concern in industries like factory work where the hours worked can quite literally translate into productivity.
Customer satisfaction and client relations could suffer
If your business relies on the continuity of customer-facing staff, you might have to get creative around scheduling to ensure customer satisfaction doesn’t wane.
A compressed workweek could mean longer workdays
When considering a shorter workweek, make the distinction between working four regular eight-hour days and working 40 hours in four days. This concept can take on many different forms depending on the type of business, however, longer workdays can nullify many of the benefits of a compressed workweek. The idea is to remove a portion of work hours from the week, not cram the same amount into a shorter timeframe.
As an increasing number of companies consider the four-day workweek, the idea is bound to mainstream. Now is the time to weigh the pros and cons of this kind of implementation for your business.