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While small businesses have traditionally formed the backbone of any successful economy, the current financial climate makes the formation and success of small businesses much more challenging. Not only do you need a solid business plan and a knowledgeable staff to make your small business a success, you also usually need a reliable line of credit to assist you with start-up costs and daily expenses.

Small businesses can use these trends to survive and thrive in a volatile market.  Low small business credit card rates make loans for everyday operating expenses avoidable and can help cut the risk of using credit. Businesses using their funds to look for creative ways to upgrade technology will have a leg up on the competition and continue to make revenue which can pay off credit and continue to be reinvested in a thriving company.

Minimize Risk from Large Loans

small business trends todays economyOne difference in today’s economy when compared to decades past is that the economies of various countries are more connected than they have been at any other point in history. A collapse or failure in one country or financial system has ripple effects that can have worldwide ramifications.

Likewise, a failure in a single bank often causes multiple banks to collapse much like falling dominoes. This was witnessed in Spain in 2008 and the effects are still being felt by small business owners there.

The New York Times reported that small businesses in Spain had mostly relied on lines of credit from smaller regional banks to cover their daily expenses. The financial crisis in 2008 caused most of these smaller banks to fail, killing the credit lines for small businesses that had previously been thriving. While some of these smaller banks had been absorbed by larger conglomerates, many others went under entirely and never recovered. The larger banks also stopped providing loans.

When credit froze, it became nearly impossible for new businesses to form. The failure of multiple small business combined with the failure of new ones to take their place resulted in massive unemployment throughout Spain and a significant decrease of tax revenues for the Spanish government. Businesses in the United States felt similar pressures, though the results were not as severe. Traditional loans and credit cards must be assessed according to a well-developed business plan.

While banks are often more reluctant to provide credit to businesses than they were five or 10 years ago, credit is often still available to business owners who have a well-prepared, intelligent business plan and who have a better chance of repayment.

Starting a business always involves risk and sometimes that means offering cars, homes, or other personal property as collateral to get the funds your business needs to get started. While these types of risks should never be taken haphazardly, a recent CNN Money article suggests that you need to be willing to put everything on the line and be willing to fulfill your financial obligations to build confidence with both lenders and customers.

 Innovate with Technology to Cut Costs

Innovation has always been the fire driving small business potential. Inventors and visionaries are always finding ways to build businesses on innovation, but every company needs to innovate in a variety of ways while building their potential into a reality. The companies on the front end of technology advancements will have the cutting edge on the competition. Tech innovations may be more easily assessed and carried in on a small business model than in a hulking corporation where implementation takes months and millions.

One advantage that today’s small businesses enjoy that previous generations did not is technological innovations that both increase productivity and reduce costs. It is easy to write new advancements off as prohibitively expensive and therefore impractical but this is not always the case. If there is a new technology that could benefit your business, research loans or government grants that may be available to help further the development of that technology.

While technology has always been advancing, those innovations are coming faster and more efficiently than ever before.

small business trends financialThe New York Times points out that the government will often offer tax incentives or encourage low-interest loans to assist in the growth of technological advancements. This is especially true in energy fields such as solar panels or hybrid vehicles. If the new technology helps you reduce your costs, it will pay for itself over time. Calculate the time it would take and how much your initial investment would be.

Embracing new technology also helps set your business apart as you put your business on the cutting edge and this allows you to offer new or faster services that competitors may not be able to match.

This doesn’t only apply to the nuts and bolts of your business but also to its promotion. Online media websites such as YouTube, Daily Motion, and Vimeo allow you post your own videos and commercials very cheaply that millions of potential customers now have access to. Social media sites give you direct access to your consumer base and gives you access to target audience information that you used to have to pay a marketing research firm to have access to. Now it’s all available online and just costs you a little research time.

Organize Expenses and Maximize Credit Perks

One way of embracing new technologies during a more challenging economic era is with a small business credit card. While banks may be less likely to give a loan or supply a regular line of credit to an unproven business, a small business credit card remains a viable option that most banks offer.

This allows you to have credit available for investment or for unexpected expenditures while still minimizing a bank’s potential risk. Business.com lists among the perks of Small business credit cards that they often have a larger limit than personal cards and you can get additional cards from the bank at no extra charge that all tie into the same credit account. This allows you to issue cards to employees and to set a specific credit limit on each card.small business trends in todays economy

Banks often encourage business owners to partake in business card programs by offering rewards programs that have incentives such as frequent flier miles and office supplies. This helps lower your overall operating costs. Some merchants also give discounts to businesses with an account with a particular bank.

Always research your options before signing onto a particular card plan. The best small business credit cards will give you the highest available credit line with the lowest interest rates and the best benefits. Always read all the paperwork as well so you know all the fees that are associated with your account.

While the current financial climate makes starting or maintaining a small business more challenging, there are still tools available to you to help your journey. Intelligent and careful usage of these tools can help you take your business to the next level so the business thrives and expands. Then you can start hiring new workers and become one of the companies fueling economic regrowth.

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!

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