There is often a question mark regarding how firms secure their funding. The uncertainty has intensified in recent times due to economic instability and strained international relations.
Firms are undoubtedly feeling more pressure to make ends meet amidst the chaos. Still, not every firm is fiscally responsible, as some SMEs view budgets as a wall instead of a safety net, unnecessarily restrictive on their aspirations. An attitude adjustment is surely needed here, especially when it comes to securing more funding.
The transport market has been particularly affected by recent events, with companies in the sector facing high demand for their services but struggling to find enough drivers and vehicles to hit deadlines and targets.
Brave and bold decision-making is also required, charting a new future for your company rather than postponing its judgement day. Some options at your disposal could be riskier than others, too. Ultimately, your transport business needs to be deserving of extra capital through strategic thinking and smart choices. Below you’ll find a few tips to help your transport business generate extra capital.
Learn to Handle Rejection
Generating capital for your transport business is not easy. The challenges can be greater when you’re attempting to secure a surplus of it too. As such, you need to learn to handle rejection, or when to turn down work when you’re company is at capacity. While this might seem counter-productive, it can help you to ensure that you complete every job to the highest possible standard.
Rejection is common in the enterprising world. Many of the avenues you explore may lead to dead ends, but these failures mustn’t become debilitating. Make sure that you handle them professionally and that you show investors and customers that you are polite. You never know when you might meet them again.
You can only generate extra capital if an unwavering commitment fuels your efforts, and if you work hard to deliver the transport and logistics services your customers expect. Your colleagues should be similarly motivated, reaching for the next opportunity as quickly as they can. Over time, you should be able to build a steady momentum that is impervious to any supposed setback. Rejection and failure should be motivators, guiding your path rather than ending it prematurely.
Reorganise Your Fleet
Fleet vehicles can help a firm stay mobile. If constant deliveries and business travel engagements need to be made, they certainly have their uses.
That said, it’s not always necessary or cost-effective to own the fleet yourself. Business/vehicle hire arrangements can be made instead to generate more capital for your business. Of course, you’ll need ample support to make these measures as effective as possible.
The vehicle hire solutions from iCompario are particularly enterprising. You can sell your fleet vehicles to them and then hire them back under a more cost-effective arrangement. Additionally, you can rent cars and vans for business purposes at a starting price of £85.00 per week. You can favour long-term or flexible arrangements to better fit your company’s needs.
These changes might seem disruptive and seismic, but they are actually rather seamless with the right company overseeing things. All the money you save under these arrangements can be reinvested into your business, giving you some extra capital to work with creatively.
Adopt Ethical Business Practices
In the past, transport companies that had higher values often used to need to compromise for their beliefs. They valued principles over profit and were unjustly penalised for it.
However, things are different today. For example, the firms that go green enjoy wider access to financial opportunities in numerous ways. Their efforts can lower business costs and make their company more appealing to investment figures. They may also be more appealing candidates for government grants should they meet their eco-friendly targets.
There’s no reason your firm can’t follow suit. Even if it takes a while to adapt business processes to the measures of the new world, it’s undoubtedly an undertaking that’s worthwhile. Even being seen to make an effort and meet projected goals will generate traction and, thus, more potential for additional capital.
It pays to be committed to a brighter tomorrow. After all, the investment world is almost entirely focused on forecasting the future. Due to government mandates and mounting global awareness, that future is almost certainly green. With the country facing calls to embrace electrical vehicle technology, now could be the time for your company to explore this option and others.
Explore Crowdfunding Potential
For transport businesses, capital is crucial, particularly if you want to move your business into a new direction.
Crowdfunding is a vast area of opportunity for transport companies, particularly if you want to embrace green transport tech. Some platforms cater to underrepresented demographics to level the playing field in the enterprising world too. Irrespective of your niche within the transport sector, experience, or background, good ideas readily receive the public’s backing.
Many factors trigger a successful crowdfunding campaign. They are:
- Establishing the brand – Ensuring the character and tone of your company image resonate across every channel of your campaign.
- Providing full disclosures – Detailing how your firm came to be, its objectives, and how the hypothetical money would be spent.
- Explaining options that you exhausted – Explaining good reasons for how and why you have failed to secure funding elsewhere.
- Building a community – Supplying backers with regular updates about your company’s progress thanks to their support. Appealing to key demographics instead of everybody. Using social media to spread the word to a target audience.
Crowdfunding isn’t charity. It takes hard work to launch a successful campaign. Approach the effort determined to prove why your firm is worthy of investment. After all, even though you’re appealing to the public, you should try to impress them as you would any other investor in your transport business.
Utilise Your Own Money
Many enterprising characters will bootstrap their logistics businesses. This involves them getting their start-up off the ground with their own money. It’s a risky bet, but it’s also a process that can be somewhat revisited throughout a firm’s lifespan.
However, you could always use your own money instead, giving you more pride and dignity in what you’re hoping to achieve.
Even if you think you’re short on money, this isn’t always the case. You may be able to free up some cash creatively by:
- Refinancing your home – This option gives you access to your property’s equity, which you could then pump directly into your company.
- Selling assets – Things like expensive vehicles or second homes that you own could be sold.
- Dipping into your savings – Try not to put off using a portion of the money you saved if your firm is in an emergency situation
Obviously, these options come with a considerable amount of risk involved and should only be considered when absolutely necessary. It’s not worth leading yourself into financial ruin on a personal level if you’re struggling professionally, either. Try to maintain a healthy perspective as you explore this option when seeking a cash injection for your transport business.
Approach Angel Investors
Investors come in different shapes and sizes. However, you may have more success with ‘angel’ investors, as they can often be former entrepreneurs themselves. These private investors are also looking to invest their own capital into companies they deem promising.
These individuals can have more input into your firm’s operations too. For instance, they may request a seat on your company’s board in most cases. They may also offer their support on the condition of an equity stake too. If possible, try not to be put off by these factors, as it can all mean that they are more invested in your firm’s future than if they were just to give you money outright.
Under these measures, you can utilise their expertise, particularly if they have experience in the transport sector. They will be keen to ensure that the extra capital they are offering isn’t wasted but utilised to its utmost potential. These efforts will only benefit your business in the long term and create stronger odds of success.
Of course, there are downsides to this arrangement if you’re an entrepreneur who wants complete control only. If you come to sell your business, you may lose a sizeable chunk of the profits to the angel investor too. Still, if you’re someone who can compromise for the betterment of all in your employ in a tight situation, angel investors can present more opportunities than they take away.
Approach Friends and Family
Approaching friends and family for financial support should truly be a last resort when you’re seeking to expand your transport business and find more capital for growth. While it can yield results, your personal relationships could suffer if things don’t work out, so it’s best not to take this option unless you’re confident it’s worthwhile.
It’s not uncommon for entrepreneurs to turn to those who love them most for extra funding and support. If you’re going to explore this route, then you should be realistic about whether your loved ones will see their money again. Ensure that they understand the risks and answer all their questions as transparently as possible. If you come into greater success due to their capital boost, you should duly reward them.
Try only to approach those who are part of your inner circle. Even a support request can seem outlandish or even offensive if you’re making it of someone you’re not close with. It’s important not to develop a reputation as an unreliable or erratic ‘user’, and you can do this by being as trustworthy as possible.
Conclusion
Generating extra capital in your transport business is a test of stamina and savviness. Moreover, some of the strategies listed above will naturally appeal to you more than others, the viability of each dependent on your transport firm’s specific needs. Deliberate on the pros and cons of each with the key decision-makers in your firm, and hopefully, you should be able to chart an agreeable path forward when seeking extra capital.
