Small business owners started this year laser-focused on growth. In fact, according to our 2024 Bluevine BOSS report survey of over 1,000 small business owners, while only 12% of small businesses grew revenue by 50% or more in 2023, nearly one-in-four (22%) came into this year anticipating 50% or higher revenue growth in 2024.
Now as this year comes to a close, businesses are taking stock of their performance, and how they will approach growth in 2025. They are focusing on what it will take to stay competitive and maintain – or potentially grow – market share. In my experience as a CFO, I’ve seen my share of market shifts. These are the top financial tips and recommendations I advise to small businesses planning for growth in 2025.
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3 ways to help your small business grow in 2025
Tip #1: Secure access to capital before you need it, so cash flow doesn’t slow
SMBs need to be smart about investments and ensure they are targeting growth while paying close attention to revenue and expenses. First order of business: address cash flow to meet rising expenses while balancing increased investments in priority growth areas. It’s important to pay close attention to consumer spending trends which currently remain stable but show signs of slowing and how this could impact short and long-term sales and ultimately your cash position.
This seems like stating the obvious, but having access to credit is critical for growth investments and maintaining a steady stream of liquidity. Unsurprisingly, we saw in the BOSS report that 45% of SMBs plan to seek access to capital this year (compared to 38% in 2023). Of those seeking access to capital, 55% are looking for a new credit card, and 55% are seeking a new lender. Before deciding on a credit card, line of credit, or a loan, make sure you have a clear strategy for how to use that extra cash so you choose the best solution for your business.
A short-term cash flow solution, like a business credit card, could give you the additional bandwidth you need to be able to manage expenses and invest in the right places to grow your business. When looking at a credit card, make this part of a larger cash management strategy and be careful not to take on additional debt unnecessarily.
Tip #2: Don’t (just) go chasing APRs – there’s more to selecting your ideal lending partner
When thinking about your ideal lending partner, the first thing you should consider are the qualifications required for a loan or line of credit – don’t waste your time chasing an annual percentage rate (APR) or other features you may not have the credentials to actually get your application approved. And be sure to read the fine print – some lenders are more transparent than others about APRs, fees, and penalties associated with their products. Be sure to do your homework and have a full understanding of the loan terms.
Understanding the terms of the loan or line of credit is one thing, but you should also be sure to research and understand the advantages and disadvantages of working with a particular lender. In the past year, while the odds of small business loan approvals have gone up across the board, more loans are getting approved by alternative lending sources and fintechs rather than traditional big banks. Fintechs are backed by the technology to be able to move more quickly than traditional lenders – with faster and more accurate underwriting processes, and the ability to offer immediate funding, making them the ideal lenders for small businesses that want to act fast and need cash now.
Tip #3: Growth at all costs could cost you success – optimize internal resources
While having the additional capital and expectations of growth in mind, it can be tempting to hire and recruit more talent right away. Hiring the right talent is important, but be careful not to expand too quickly and burn your resources. Look internally to see what you can do with what means you already have and understand your limitations. Delay hiring a bit and ensure that when you do start recruitment, you’re being highly strategic about those decisions.
Instead, try to think about how your business can provide more value without adding anything “net new” to your offering, to reduce the need for hiring new talent right away. Offering a range of upgrade options will help you maximize your revenue per customer. Additionally, don’t make premature price reductions – focus on the long term. You may be tempted to drive customer interest with lower prices, but in this economy, it’s best to play it conservatively with pricing so that you keep yourself protected in the event that supply costs continue to rise. With this in mind, you are better off with promotional periods for discounts throughout the remainder of the year, rather than slashing them indefinitely. Finally, issue invoices as quickly as you can and follow up with payment reminders to ensure you collect on time.
Growth should remain the priority – stay focused & strategic
SMBs are smart to focus on growth in the coming year, and the way forward is all about strategic financial decisions. Even with sustained inflation and interest rates, there are some smart, financially savvy moves small businesses can make right now to support their growth goals in 2025.
As we head into a new year, take stock now and make sure you are focused on smart growth and have the right resources and partners to help you achieve these goals. These financial tips can help keep you on the right track to make 2025 the best year for your business bank account.
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David Quinn is CFO of Bluevine, the banking platform that serves as the financial operating system for startups and small businesses. Since 2013, Bluevine has served over 500,000 customers, delivered over $14 billion in loans, and is currently trusted with over $1 billion in managed customer deposits. Previously, David held executive positions at Bank of the West, Citi, Morgan Stanley, and Silicon Valley Bank.
