In many respects, there are ways to start a business for free. Passion, dedication, careful planning and a lot of hard work can at least get a business off the ground, such that you can start generating profits. As you ramp up activity and look to expand though, there will inevitably be new challenges that demand a little bit of funding. And one of them is the engineering of an effective social media strategy.
This may not be immediately apparent, because of course you can set up business-related social media counts and run them yourself at no charge. Ultimately though, an effective social media strategy — one that can assist with marketing efforts, build the business’s brand, communicate with consumers, and so on — is likely going to require some financial backing. You’ll either need to pay an intern or employee to manage social media, or you’ll need some extra funds to justify the time you spend on it personally.
With that said, here are a few creative ways you can fund a new addition to your business like social media management with relatively little effort or disruption.
Recent years have brought about a notable rise in P2P lending, often attributed to the notion that banks are giving out loans as readily (or that young entrepreneurs are less trustworthy of traditional institutions). Whatever the cause though, this has become a fairly reliable way of securing funds for a business venture. Basically, you can set yourself up as a borrower on a P2P lending platform, where anyone eligible can provide the funds. The catch, of course, is that you then need to repay those funds with interest down the road. But if you’re confident a social media effort will help the business grow and generate more revenue, this kind of deal can be more than worth it.
Borrowing From Retirement Savings
Taking money out of an RRSP or similar retirement fund is actually not an uncommon thing for an entrepreneur to look into, even if it’s something that should be handled carefully. The downsides are simple: RRSP withdrawals can be taxed (with specifics depending on how much you take out and how you do it), and you’ll be taking away from some of the compounding interest the account is generating for your retirement. Nevertheless, this is a means of withdrawing a substantial chunk of cash when you need it for your business. If a portion of your retirement fund can help to get your company to the next level — really, via social media activity or otherwise — it may be worth considering it for the long-term benefits.
Fund Social Media With One Product or Service
This idea may depend somewhat on the type of business you’re running. But if you’re able to do it, it can be a creative solution to take profits from a single aspect of your business — the sale of one product, for instance — and funnel that income toward funding a new effort. It won’t work immediately, but in time this can tighten your overall revenue in the interest of setting up the finances to launch a social media operation. Then, once you do it, you can gradually stop siphoning off profits, so that you’re back to normal with an up-and-running social media operation that will (hopefully) increase total revenue.
Seek a Small Business Loan
We mentioned above that some banks aren’t lending as much as they used to, and some entrepreneurs don’t trust traditional lenders. Both of these things are true, but it is still perfectly possible to secure a small business loan — even after you’ve started your business. In fact, if you can demonstrate that the business is succeeding and you need the loan to help it grow through something like a more robust social media campaign, you may be more likely to secure a favorable loan than a pre-startup entrepreneur who only has a business plan to show. At any rate, this is perhaps the most straightforward way to obtain funds for this kind of business project.
The importance of social media for a small business is impossible to deny in 2020. The right approach can increase brand recognition, improve customer interactions, lower marketing costs, and even boost search rankings and visibility. But to reach this level of effectiveness you’ll need to do a little more than manage Facebook and Twitter accounts in your spare time. Any of the ideas listed above can help you to fund a more robust effort that can truly enhance your growing business.