In a world of fast-moving change, coupled with complexity, we can all be excused for looking back on the good old days with a certain amount of nostalgia.
Remember when there were only three TV channels, and you knew it was time for bed when they played the national anthem and the white dot appeared?
Sunday lunchtime at the pub was just as described. It was open from 12 noon and you had to drink up by 2.30pm. It was great for getting together with mates, as everyone knew where they would be in those couple of hours.
I could go on, but I am sure you get the idea.
Things were much simpler in those days but now we are spoilt for choice. Hundreds of TV channels broadcasting rubbish, and pubs open all day with people deciding to have Sunday lunch at 4pm.
Change is here to stay, and in most instances, it has improved our lives no end.
Take Google for example it sifts through everything to bring you the most relevant answer, instantly. And as for Amazon, it is simplicity personified. You find me someone who does not love Prime. I just type in what I want, find the product at the price I wish to pay, and it then lands at my door. Hey presto!
Both continue to develop technology to help make our lives easier by quickly giving us exactly what we want, when we need it.
So, what on earth does this have to do with business finance, particularly in a world emerging from the darkness of the past 12 to 15 months?
Whether your business has laboured or prospered during this unique period in our lives, there remain challenges and opportunities ahead. If additional finance is required to meet or achieve them, you will need to consider the best fit for your business which will provide the solution you have been looking for.
However, like the TV channels, there are now more choices for funding than ever from an array of lenders, leading to a great deal of confusion.
That is why, at Reward Finance Group, we like to keep it simple. Like using Google and Amazon, before you start the search for funds, decide exactly how much you might need and for how long. There is no use in selecting a fancy, super-duper high-tech lending solution if it does not provide enough funds for your business needs.
When deciding how long you need the money for, I do not believe a business funding model that runs for the next five to seven years is the best option. (Hint – tell me a business plan that had THAT event built into its forecasts!)
My advice is to focus on a shorter term which makes it simpler to calculate the requirements for, say, the next 24 months. Naturally, an eye needs to be kept on the longer term, but do not nail yourself to something now that might not work in three years’ time because the world has changed.
Of course, price is important, but it should never be the defining reason for choosing a funding solution. If price is your only indicator, ask yourself whether you always buy the cheapest shoes in the shop? Thought not, so do not do it when you are trying to address the funding needs of your business.
In a world post the 2008 financial crisis, we saw the emergence of more choice than ever before in the world of SME funding in the UK. That has been a good thing, as countless businesses have benefitted and prospered from these new funders.
There is likely to be a further shift caused by this latest crisis. We have already seen some of the peer-to-peer operators fall by the wayside and some of the unsecured players catching a cold. There will, no doubt, be further twists to come.
So, if you need funding, talk to your advisors, use a financial broker, get a recommendation from someone whose opinion you value. Above all, do not sit with the weight of the world on your shoulders thinking you have all the answers. After all, the smartest businesses spend lots of time listening and asking questions – usually in that order.
Cashflow is the key for all businesses and the cause of failure is if it stops flowing.
In conclusion, just decide how much you need, and for how long, and do not let the lender complicate it by overwhelming you with countless choices of funding products, which you then must jump through hoops to get.
At Reward, we believe in keeping it simple by providing one Business Finance product that provides flexibility and fulfils all the working capital requirements of a business, delivered in an easy-to-understand way.