Why Your Landscaping Business May Need Financing in 2022
By Matthew Gillman
Running and growing a successful landscaping business takes a lot of hard work and investment. You’ll need funding to capitalize on growth opportunities and keep operations running smoothly during the slow winter months.
Having more working capital will go a long way in maintaining a steady landscaping business in 2022. From purchasing better equipment to refinancing debt, financing can almost always guarantee your growth when used in the right places.
Purchasing landscaping equipment
Even if your current equipment is still working to your benefit, it will eventually wear out over time. Plus, if you are actively looking to expand your business, you’ll likely need to purchase new tools and equipment to meet the growing customer demand.
Having access to immediate working capital will allow you to purchase, repair, or upgrade landscaping equipment to make sure you offer your customers the best service possible.
Equipment can be expensive, so paying for it upfront may not be a wise move, especially when there’s a lot of movement going on in your business. When your budget is tight, but you need to meet customer demand (particularly during high-demand seasons), funding solutions such as equipment financing will help you pay for equipment on monthly terms that work for you.
Paying off outstanding debts
If you’re juggling multiple debts and struggling to pay them back, you may want to refinance them. Debt consolidation allows you to take out one loan to pay off the number of existing loans you’ve previously taken out and are having difficulty paying back. The benefit here is that you can pay off your unsecured debts and avoid your credit score dropping because you failed to make repayments on time.
Debt consolidation makes sense if you want to pay your debts off faster. For example, if you need to pay off your existing business credit card debts to avoid high interest rates and late fees, taking out a loan to pay everything in one go will keep you from spending more long-term. In return, you only have to pay your lender small monthly payments at a fixed term.
If you wish to approach 2022 with little to no debts, consider getting financing to pay them off. Debt consolidation will help you combine all your existing balances into one loan so it’s easier to manage and you don’t have to worry about late payments.
Keeping inventory levels healthy
Even though purchasing supplies in bulk will save you more money, many small business owners don’t do it because they lack the funds to pay for the supplies upfront. If this is the case for you, financing can be the solution.
If you’re planning to expand your landscaping business in 2022, you’ll need to stock up on supplies to meet fluctuating demands. You can use more working capital to restock on commonly used supplies such as fertilizer, soil, mulch, stones, lighting products, irrigation supplies, etc.
Buying in bulk will save you money long-term, you just have to make sure you maximize the supplies you purchase. In some cases, buying in bulk won’t make sense if you restock on items that customers don’t usually need.
Preparing for emergencies
When the pandemic hit, a lot of small businesses were forced to temporarily shut their operations. Unfortunately, more than half were never able to reopen. Yelp.com’s Local Economic Impact Report stated that of the 140,104 businesses that were marked temporarily closed on the platform, 97,966 permanently shut down.
These small businesses couldn’t pivot because they lacked the funds to support themselves amid the closure. To this day, many entrepreneurs are still scrambling to bounce back and keep up with their utilities, payroll, rent, and debt repayments.
The pandemic shined a light on the importance of having funds in place to support your business during emergencies – whether it’s another health crisis, a natural disaster, cyber-attack, or something else.
You can’t predict when an emergency will occur, but you can be prepared if and when one does. Having access to revolving funds will provide you access to a sizable amount of money for when such occasions arise.
A business line of credit, for example, allows you to withdraw funds from your account anytime you need, and then pay back the money with interest before its due date. When you don’t need the money, you simply keep it in your account, and you won’t be charged a single cent.
Attracting more customers
As the pandemic eases, there are huge opportunities for you to grow your business. As you plan your 2022 budget, consider investing in marketing efforts to generate more sales leads or to re-brand your company.
You can use additional funds for purposes like geotargeting, below-the-line advertising, and search engine optimization (SEO).
Geotargeting is a type of advertising that allows you to leverage location data to reach customers. This creates personalized content to your target consumers by displaying ad content based on the user’s locality and behavior.
Below-the-line advertising is when you craft brochures, electronic direct mails, posters, flyers, and email campaigns to promote your business or sell your products.
Search Engine Optimization means optimizing your site to generate online traffic and convert users into paying customers. It helps to increase your visibility among potential customers whenever they search for products or services that are related to your line of business in various search engines such as Google, Bing or Yahoo!
Since more people now rely on online platforms to get information, you should also consider investing your marketing efforts into social media platforms like TikTok or YouTube. These days, smart businesses tap social media influencers to promote their products or services, but this of course comes at an added cost.
With the right funds, you can leverage more capital to increase your marketing efforts for next year. You can either create campaigns that help you gain more clients or hire more people to run your marketing efforts.
If you’re looking to grow your business but you don’t have enough capital to expand your staff, outsourcing talent is a great option that gives you access to additional manpower and skill sets without having to hire people full-time and cover the cost of their health insurance.
Examples of when outsourcing could come in handy: If you need assistance managing your books but can’t afford a full-time accountant; if you take on a big project and need more manpower to get it done in a certain timeframe; or if a client has a special request for something like an improved irrigation system, you can hire someone who specializes in that work for that specific project and then pay them for their time on it.
More funds mean more opportunities
No matter what your endeavors are – be it obtaining more clients or purchasing new equipment for your landscaping business – having sufficient funds under your belt will make it easier for you to make strategic decisions. It will also help support you when big opportunities come your way and you need to increase your inventory.
Before getting financing from lenders, make sure you identify what your goals are in 2022. Know how much you need and where you’ll use the money so you can manage your cash flow well.
Matthew Gillman is a business financing expert with more than a decade of experience in commercial lending. He is the founder and CEO of SMB Compass, a specialty finance company providing education and financing options for business owners.