If you’re a regular visitor to our blog, you know that we occasionally answer commonly asked questions. Our goal is to help as many business owners as possible get the information and insight they need to make the right business financing decision.
And while we’re continuing this Q&A tradition here today, there’s a twist that makes this particular blog post unique. Here’s why:
Often, our customers will ask us if they can afford to open a new business location. As you can imagine, that’s not a question that we can definitively answer – because each business and business owner is unique.
However, recently, we heard from a customer who approached the issue of opening a new business location from a rather different angle. Instead of asking us if he could afford to open a new business location, this customer told us he wanted a working capital loan because “he couldn’t afford NOT to open a new business location”.
Now, with our apologies to English teachers everywhere who are cringing at the double-negative, this customer’s approach was profound. Yes, he was a small business owner – and proud of it. But he didn’t want to stay a small business owner forever. And he realized that the only way he was going to get to the next level was by making some investments – and that meant opening a new business location (actually, he had more than one in mind).
Obviously, we would never dream of sharing any confidential information in our blog or anywhere else. However, generally speaking, we can highlight some of the very astute points that this customer brought up during our conversations, because they may resonate with you at this time as well:
- Adding new business locations opens up economies of scale, since larger infrastructure and inventory purchases can be made – which means bigger discounts and better deals. Plus, the business has more negotiating muscle, and can often use it to get more favorable terms with suppliers and vendors.
- Adding new business locations creates plenty of positive buzz, which can be further driven by advertising and marketing campaigns. Customers view growing businesses as safer, better and more trustworthy to deal with.
- Adding new business locations can mitigate risk, since a downturn in one location can be partly or wholly offset by gains in another location. It’s the same basic principle of having a diversified portfolio of investments.
And we saved the most compelling reason for last:
- Adding new business locations, for this particular customer, was simply NOT an option. He figured that he had about 5 years of continued growth before large national enterprises started to pay attention to his niche. And once they did, it would be a matter of months before they (in his words) “went into attack mode and spent millions of dollars blowing me and every other small business in the marketplace out of the water”.
Simply put, our customer wanted to go into overdrive, leverage his competitive advantages, build a strong client base, establish a rock solid reputation, and make his business unassailable. And he wanted a working capital loan now to make that happen. Now that’s what we call visionary!
The Bottom Line
As you can see, while the question “can I afford to open a new business location?” is important, the question “can I afford NOT to open a new business location”? may be even more insightful.
Call Mulligan Funding at 855-326-3564 to discuss your financing options today!
*The information shared is intended to be used for informational purposes only and you should independently research and verify.
Note: Prior to January 22, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.