Expansion advice for small businessesDate posted: 12/17/14 11:15:00 AM
Entrepreneurs who experienced a strong year with their startups should consider filing their tax returns as soon as possible, according to Evan Singer, general manager of SmartBiz, a firm that works with the U.S. Small Business Administration.
Singer said lenders typically use the latest tax information, so small business owners shouldn't shortchange their companies if business improved from one year to the next. The improved finances could help a company land a loan when funds are most needed.
"If a business had a good 2014, a good year from a financial perspective, and they're looking to borrow money or get some type of business loan, they should file their taxes early, if possible," Singer told IT Business Edge. "The reason is that most banks will look at the business' tax returns to decide whether or not they should give them a loan and will also use those returns to determine how much they can qualify for."
Singer expects more small businesses to expand in the coming year after a strong 2014. According to The Bureau of Labor Statistics, the economy added jobs for the 57th straight month in November, which is the longest streak in the nation's history. During that span, small businesses added seven million to 10.9 million jobs, which shows how vital startups and small ventures are to the health of the economy.
"Don't let the negative press scare you," Singer said. "The economy is going well. People are hiring, adding jobs. They're looking to expand their businesses. I've seen it across the country and it almost doesn't matter the market right now. …When I see some of the negative articles, I think 'Oh, that's funny because I'm not seeing that.'"
Choosing to expand a company
When most people start a business, they envision a small company turning into something much larger. But choosing when and how to expand is incredibly important and somewhat difficult for many companies to grasp.
Entrepreneur recommended all business owners should comb through their business blueprints before trying to expand vertically, which is when a company takes an existing product or service and brings it into a new market.
When done correctly, vertical expansion can add a new stream of revenue by tapping a new client base. If done poorly, a business can thin itself out during the process and hinder what it was initially successful in accomplishing.
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