Small businesses often find it difficult to get the cash they need to grow their business. But is there a secret source?
Banks are making it more and more difficult. Governments and local authorities seem set on increasing red tape. Year on year this seems to get harder. All we want to do is earn a living, make some money and often to add value to our communities.
Ok, maybe not free, but often unexpected. All too often we as businesses get tax rebates. We get these tax refunds or rebates for a range of reasons. A tax refund is excess money that we have paid a government authority over time. And they give it back at the end of the tax year. Ok, this may be a pain. But the cash flow can be an unexpected bonus none the less.
What do we do with our tax refunds?
Often a refund of taxes just goes back into the business bank account. But why not make this money work for us?
Small Business Planning
In our annual business planning sessions (you do these don’t you?) I am sure there are things you want to do but only when there is “spare cash” or profits to do so. Well guess what. This tax refund is spare cash!
Invest in developing you or your managers with some executive coaching, or personal development. Train your sales people. Update that expensive to run office printer.
Other micro investments can include going green, a spring clean of the business premises. A makeover or freshen up of the décor.
A tax refund is a great way to fast-track business plans. But often it isn’t enough to cover all the costs.
What other finance options are available?
There are several ways to find supplementary funding. Options available to small businesses to extend your tax refund include:
Credit cards, and a working capital line of credit from Kabbage and similar organizations. Please ensure these are affordable before entering into any agreement.
Other medium term solutions include crowd funding on sites like Kickstarter or Indiegogo. Using crowd funding you will need to be careful. But they can be great ways to generate both cash and increased market awareness. Just make sure you set an upper limit on the number of pledges you can back. Bigger is not better. I have seen some successful small businesses go bankrupt. This is usually because their requests for funding were too popular. The resulting cash flow to manage the pledges crippled them. The social media damage is almost impossible to recover from.
Whatever you do with your tax refund – use it to develop you and your business. Do not waste the opportunity of using a few thousand dollars (or pounds? euros?) as an extra opportunity. Don’t let the banks be the winner of your “tax windfall”.
What would you do with 1-2000 to develop your business and its sustainability?