Half of U.S. small-business owners report facing significant hurdles brought on by the current supply chain disruptions. Couple that with a record number of new businesses being created this year (60% increase from 2020), it’s likely many will fail without access to funding that is typically bestowed only upon larger companies with established track records.
In response to the severe hardship entrepreneurs have endured these past two years, publicly traded and Arizona-based SaaS company Business Warrior has raised more than $10 million in funding in the last 12 months to help small businesses grow. Five million of those funds are being offered as loans to small business owners in partnership with elev8 Advisors Group to help entrepreneurs who face difficulty receiving lending from traditional banks. The other five million raised is being used to propel the company’s rapid growth and launch the newest version of its software, which will work to enhance the automation process for receiving approval on a loan.
Typically, cash advance companies charge more than 40% to small-business owners looking for a loan. Business Warrior’s new program has a targeted average rate of 15% for borrowers. The company is upfront that, while the interest rate is higher than a traditional small-business loan from banks, the vast majority of small-business borrowers cannot get approved for those loans.
The two biggest problems business owners face is a lack of customers and lack of cash. We understand that small businesses have been unnecessarily denied loans in the past through old and outdated legacy credit processes. Small businesses need access to reasonably priced loans; these loans have not existed before to the businesses that need it the most.
The Bureau of Labor Statistics cites that around 20% of business startups fail in the first year and, even more, 77% of small-business owners who apply for a loan from a big bank get rejected. Business Warrior uses automation and predictive algorithms from its software to scan both major public and private data points to help determine a company’s Business Score and, therefore, eligibility to receive loans from $5,000 to $50,000. The proprietary Business Score is broken down into four categories: advertising, business listings, reputation and web/SEO.
While loans are a crucial part of a small business’s success during ongoing supply chain disruptions, COVID-19 complications and an employee shortage, there are other steps business owners should be taking to ensure their company survives. Right now is a great time for small businesses to change their models.
Business Warrior advises small businesses to use shipping delays as an opportunity to look at other providers and consider ordering local in the United States. Companies should also provide customers an incentive if avoiding delays is not an option. This includes supplying gift cards or discounts to loyal customers to say “thank you” for shopping local during tough times and being patient while their product or service is delayed.
Being transparent about a company’s struggles helps build trust with its repeat customers. Businesses should let people know what they are doing to combat delays and offer incentives to encourage their customers to continue to support their brand.
In addition to the pandemic and shipping delays, so many industries are short staffed. The best way to mitigate longer wait times, bad reviews and a stressful environment for employees is to communicate that gap with customers. Business Warrior suggests making an announcement explaining staffing issues and acknowledging it may lead to other issues, such as longer wait times.
Ninety-seven percent of consumers use the internet to find local businesses, meaning the most effective way for a small business to acknowledge staffing issues, shipping delays and other company issues is to stay vigilant with updating their website, social media and online listings.
Managing all these different facets of a company is a lot for any business owner to handle. The bottom line is that it’s crucial for small-business owners to evaluate their resources and educate themselves on what strategies are available to allow the company to stay successful during turbulent times.
Rhett Doolittle, chairman and CEO of Business Warrior, has been a business owner for 13 years and had two successful exits in the past. Much of Doolittle’s experience and capabilities stem from running his first business, Entrust Bankcard, a payment processing company launched in 2006. Entrust Bankcard had a remarkable three-year revenue growth rate of 8,417%, which placed it No. 18 on Inc. 500’s list of the fastest-growing companies in the United States. Business Warrior is the culmination of his years of experience creating products and learning what problems need to be solved for small businesses.
Business Warrior shared results for its fourth quarter and end-of-year financials in December 2021, announcing a 1,331% revenue growth compared to the previous year and more than $5.5 million in total income.