Is Taking a Small Business Loan Worth It?

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StrategyDriven Managing Your Finances Article |Small Business Financing| Is Taking a Small Business Loan Worth ItThe word ‘loan’ doesn’t have a nice ring to it in any sense. Whenever we talk and hear about loans, it usually points towards difficult times and thorny situations. However, business loans can’t be seen through a singular point of view. One has to apply context to commercial loans because oftentimes they are actually tied with business opportunities.

Whenever any entrepreneur starts mulling over the idea of taking a small business loan, he/she has to deal with a wide range of different opinions and suggestions. Some people strongly advocate against loans. By sharing gloomy and sometimes scary anecdotes, they try their best to deter a person from taking business loans.

Then there are people who act as the cheerleaders of loan companies. They only know the benefits of business loans and how they have turned around the fate of many ventures. Lastly, there is a group that takes a cautionary approach. They give an objective overview of taking business loans.

We will recommend you to listen to the last group. It is important to get a precautious take when you are thinking about getting a small business loan i.e. factor in all the upsides and downsides before making the final decision.
Here, we are going to discuss the instances when business loans can be beneficial or detrimental. Go through them and make a decision that suits best your unique business needs.

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Instances When It’s Profitable to Take a Business Loan

There are certainly many valid reasons where getting a loan actually helps in growing the business further. Let’s look at all such instances.

Physical Expansion Becomes Imminent

When you don’t have any further space to set up any new cubicle or when you have don’t enough area to accommodate all your customers— these instances actually indicate two things:

  • Your business is booming
  • You need more physical space

However, experiencing business growth doesn’t mean you have enough capital to take on physical expansion. We all know that the commercial real estate market always remains bullish and it’s not easy to get the required space at the desired location with your existing purchasing power.

In such cases, where a business is growing and requires more physical space for streamlined commercials operations, it is better to go for business loans. Persisting with the same congested business premises amid continuous business growth can prove to be counterproductive. You will certainly pay back the loaned money in a few months or years. However, the business growth that you are going to accommodate through physical expansion will pay you dividends for decades.

For Better Credit Prospects

If you have the vision to turn your SME into a large-scale commercial operation, then you are definitely aware of the line of credits and how important they are for the sustenance of big companies. However, it should be kept in mind that financial institutions don’t just dole out lines of credit to everyone.

A business with no lending and credit history can’t apply for a line of credit. There should be an impressive credit record to your business’s name. This can be built by taking smaller business loans and then making on-time regular payments. Besides building a good credit profile, taking small business loans on a regular basis also ensures that you don’t find yourself in a capital drought at any given moment.

Lastly, constantly working through smaller loans also results in building a good affiliation with any specific lender or lending company. This again helps when you apply for bigger loans and line of credits.

For Buying Equipment and Inventory

It’s a no brainer to file for a small business loan when you have to get any equipment or any other business inventory. These tangible items run your business and you can’t ignore them just because you don’t have the required capital at the moment. Let’s try to understand the profitability of a business loan in this context through an example.

Let’s suppose that you need two workstations worth $2,000 for a project that can bring in $3,000 in profits. But at the moment, you don’t have enough money to allocate $2,000 for this purchase. So, what you should do? Pass on the opportunity or take a small business loan to get the required equipment? We would recommend you to go to the latter option.

In the above-mentioned example, even securing a loan on a high interest rate (e.g. 25%) will generate a profit of $500. Moreover, the addition of two workstations to your business assets is a permanent gain that you are going to get. In short, it’s a win-win situation. This is the reason why taking loans for primary equipment and inventory rarely go wrong.

Instances When It’s Risky to Take a Business Loan

There are some instances where you should give a second thought on taking business loans.

If Cash Inflow Is Already Really Thin

Going in debt when your cash inflow is already flickering might not be a good option. Making debt repayments is not easy when you have very limited cash to play with. Any aggravated scenario can also lead to collateral, which is the worst possible thing that can happen to your business. In any tricky situation, it is better to first consult business loan experts. The advice of experts working at this company can come in really handy when you are in two minds regarding applying for a loan amid receding cash inflow.

With a Low Credit Score

For whatever reason, if your business now stands with low credit score, this it might not be a good idea to make things by acquiring a high-interest loan. Low credit score makes it less lucrative for lenders to offer loan offers. So, they compensate for it by increasing the interest rate. Before applying for a small business loan, it would be better if you first work on your business reputation and credit score.

The above discussion makes it clear that applying for small business loans for the right reasons pay dividends. Moreover, it is important to have good business reputations if you are going to incorporate borrowing in your business model.

Top Financial Tools to Use for Business in 2022

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StrategyDriven Managing Your Finances Article |Financial Tools for Business|Top Financial Tools to Use for Business in 2022As we are firmly into the year 2022, businesses might be thinking about what is on the market when it comes to the tools that can help us make better financial decisions. And, with the rate at which we are creating new apps and other digital aids that make doing business a little easier, it only makes sense that we take a look at some of the top financial tools that could benefit your company in the up and coming year.

This piece will take a look at some of the top financial tools that can benefit your business in 2022, so you can give them a go yourselves!

What Are the Benefits of Using Financial Tools?

Financial tools are new aids that are around to help businesses make the most of their data and help improve their decisions that will impact the company going forward. This could be anything from a tax calculator to something that helps compare investment opportunities!

There are many benefits of using financial tools, the main two being that they can improve your profits and help keep your money and investments safe.

They usually make analyzing data that you have collected from your business much easier and allow you to use those findings to determine a better outcome in many different areas such as sales, marketing, or customer service.

A Recommended Budgeting App

Budgeting is now more important than ever, thanks to the even more uncertain nature that the market is bringing businesses. This is why businesses should be stepping up their budget game and taking factors such as emergency funds seriously. This is where it can be worth throwing out all traditional budgeting measures and going straight to the latest release of budgeting apps.

Budgeting apps have become more advanced, giving you options that could even rival accountants and other professional budget planners. What app you should go for will depend on your business and what kind of features you are really looking to use.

Many of these recommendations come with a free trial, so you can get to grips with it and work out if it will benefit you and your business before you commit to paying a subscription.

Financial Planner Apps

Another exceptionally useful tool that businesses can use for their finances is designed specifically for planning finances and analyzing its data.
Similar to budgeting, these apps can show you several different plans of where your finances could go and offer customizable features that will allow you to keep your eyes on certain aspects, such as a retirement fund or a savings account.

Stock Screener Apps

If you are an individual or a business that keeps a beady eye on the stock market, then you might be surprised to know that there are apps that can help you bring your investing up to the next level.

These types of apps can take hours and hours off of your day by scanning the entire market to offer you advice and data on average trading prices, volume, and various chart patterns, just to name a few! They can even be customized and set at your own parameters, such as how much you would like to invest and how many shares stocks have. The app will then bring up information that is only relevant to your specific search criteria.

Make sure to do your research to find the best stock screener for you and your business, so you can make the most of the features that are useful to you.

Spending and Saving Apps

Plenty of us know how easy it is to tap our contactless card or press buy now online without giving a second thought, and there are now apps being created that can hold us accountable for this behavior. Having an app that can show you exactly where your money is going can help you understand what you might be overspending on and if any changes need to be made. You will also be able to see your savings in the same app, plus even any investments that you’re making. Many apps will allow you to link this financial data together, so you can have an overall view of financial health, and having such a clear picture can help you slow down on spending, and encourage you to look at saving or investing more.

There are many apps available on the market now that are all designed to help give you a brighter financial future. Just remember – you still have to do the hard work!

Why Your Business Will Benefit from Hiring an Accounting Firm

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StrategyDriven Managing Your People Article |Team Building Tips|Team Building Tips and Tricks for ManagersIf you are running a business, then chances are you constantly have a number of different things on your mind, one of which is likely going to worry about how you can keep up with your growth upon expansion. If you currently find yourself querying such a thing, then there are resources you can look at and learn from, but the fact is, the answer that is best for you will be different to what is best for other businesses. One reasonably universal step forward, though, is to hire an accounting firm.

As you grow, so too do the number of people you pay, your income and your overall outgoings, and with that, so too will your tax obligations change. Keeping up with these is very hard to do while running the rest of your business, hence why an accounting firm is an important asset. This article will dive into a bit more detail about why having such a firm on your side is useful.

Are You Looking to Buy an Accounting Firm?

Of course, it may be that you already know the value of an accounting firm and are currently looking out for one. If this is the case, then it is recommended that you head over to Poe Group Advisors, which buys and sells accounting firms. These will be able to listen to you and understand what your business does before making suitable recommendations.

The Benefits

So, what are the benefits of such a purchase?

You Will Save Yourself Time

It is recommended that different elements of your business are outsourced to other people because if you get too bogged down in the likes of legal, technology and, in this instance, accounting, you aren’t going to have any time to actually run your business. You want to be working on what it is that makes you unique and can generate income, not piling through pages upon pages of accounting in order to get to grips with the process and what you owe.

You Will Be Paying Employees in the Best Way

A good business is nothing without good employees and as such, it is important that you are paying them a fair wage, on time and in a way that benefits you and them equally. An accounting firm is going to be a lot more versed in working out the best way that you can pay your employees, as it is not always as simple as just handing over a paycheck. There are some complications that can present themselves along the way and as such, you will need an accountant to pre-empt these and pay your employees accordingly. The most common methods are either by salary or dividend.

You Will Get Access to Pieces of Accounting Software

There is a lot of good accounting software out there that can make inputting numbers and keeping on top of everything a lot easier. By hiring an accounting firm, you are going to get access to this software and also be able to work with someone who knows how to properly use it.

How To Cut Business Overheads

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StrategyDriven Managing Your Finances Article |Business Overheads|How To Cut Business OverheadsIt’s crucial that you spend money on your business. If you just set it up and hope that people will find it and start paying for your products and services, you might be lucky – this could happen – but it’s far more likely that you’ll make little to no sales and that your business simply won’t succeed. To be noticed, you need to spend money; you have to market effectively. Yet, in order to have the funds to market in the right way, you may need to cut back on other business overheads, especially at the beginning. With that in mind, here are some of the best ways to do that so that you can invest in your marketing strategy and start to build your business up.

Have A Review

The first thing you’ll need to do once you realize that you must cut back on your monthly business expenses is to have a review. Ideally, you should ask your accountant to help you since they will already be privy to the income and outgoings of your business and may already have some suggestions as to just what you can do to make things more streamlined. Assuming you have an accountant to do your booking keeping and other financial tasks, it’s time to engage them to give your books a thorough overview. They can then give you their opinion on what you can do away with entirely, what you can reduce, and what you’ll need to keep paying for.

If you don’t have an accountant, now is the time to hire one. Although it is an additional expense, your accountant will be able to ensure your business is running profitably, and they will take the financial tasks away from you, allowing you to concentrate on the marketing and other aspects of the business.

Speak To Your Employees

Although you may not think to do this initially, the fact is that your employees are crucial to your business, and they see a lot of things first-hand that you won’t see when you’re running the business. Therefore, it’s important to take this into account and speak to your employees about anything they have noticed that might be wasteful and, alternatively, anything that you’re not currently paying for that would enhance the business.

You don’t have to take their advice – this is your company, after all. However, it could be that some excellent ideas come from this consultation that you would never have considered before.

Buy In Bulk

Buying in bulk can help save money in many areas of your life, not just in business. Of course, you may need to spend more than you had intended to when you buy a lot of one product in one go, but if you can negotiate a good deal, you will be saving money overall when you consider the cost per item.

The key is to buy things that you know you will be able to sell – there is no point in getting a great deal on a product and then finding that no one wants to buy it. If you can pinpoint what your customers want and buy in bulk – saving money – and then sell at the usual price, your profits will go up and you will have reduced your outgoings at the same time.

4 Characteristics of a Modern Data Management Strategy

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StrategyDriven Organizational Performance Measures Article |Data Management|4 Characteristics of a Modern Data Management StrategyClean, comprehensive data is one of the most, if not the most, useful assets at an organization’s disposal. Data analytics is a major driving force behind business leaders’ efforts to streamline operations, connect with new clients, and gain an advantage over competitors. Unfortunately, for many organizations, efforts to devise and execute strategic initiatives tend to be hampered by the need to spend significant amounts of time and financial resources toward compliance with regulatory mandates.

In the world of business today, regulatory standards and requirements change at dizzying speeds, shifting the needs and responses of financial institutions in turn. Hence, it’s more necessary than ever for organizational decision-making to be proactive, fast, and above all data-driven. If an organization’s workforce and resources are spread thin just attending to daily upkeep and scrambling to meet complex regulatory demands, it will have little time and energy left to focus on profitability.

Many digital solutions available today promise a stable data foundation that will allow companies to handle their information more accurately and efficiently. Employing such solutions is a key step for organizations to develop an up-to-date approach to data management. Some essential qualities a modern data management strategy must have include the following:

Well-Integrated and Unified

One of the greatest challenges organizations face when it comes to data management has to do with depending on siloed legacy systems that make it difficult to collect and reconcile data across multiple sources. Such essential areas as risk, compliance, treasury, and finance often make use of disparate databases and reporting tools. This fragmented approach can, in turn, hinder necessary interdepartmental communication and make it difficult to gain an enterprise-wide perspective.

Above all else, a modern data management strategy seeks to create a single, unified source of truth that is able to pull essential data from multiple sources. This ensures that useful information can be aggregated and accessed across all units within the enterprise. The right digital solutions will be able to perform these unifying functions with great efficiency and accuracy, reducing operational costs and eliminating the risk of redundancies and inconsistencies in your data.

Automation saves valuable time that would have been spent on data collection and reconciliation, allowing you to channel it toward more productive analytical efforts. With a clean, consolidated source of information at your fingertips, your organization will be well-equipped to mine deeper, more substantial business insights at a faster pace than before.

Agile and Adaptable

Demands from regulators, customers, and the market itself can shift radically by the day, if not by the hour. More often than not, organizations are then judged by how quickly and creatively they are able to respond. Hence, it’s imperative for any company to find ways to boost its business agility and react expeditiously to any major changes.

Manually sourcing, tracking, and verifying data across siloed systems is a slow and error-prone process that can be damaging to an organization’s overall performance and reputation. Utilizing an integrated data ecosystem that spans across the entire enterprise is an effective way of reducing reporting-related risks and costs. You’ll be able to access established data structures for known use cases and meet future business demands more quickly—even those you may not have foreseen.

Extensible and Scalable

A robust, extensible data ecosystem will protect your company from being caught off guard by changes in the business and regulatory environment. Look for all-in-one cloud-based data management services that will enable you to build applications that are highly scalable and support all data types, including graph data, relational data, and structured or unstructured nonrelational data. Utilizing this technology ensures that your organization will have access to all the information it needs, presented in the most productive possible way, at any given time.

As previously mentioned, having to spend less time on reconciliation opens up more time for meaningful data analysis. More concretely, this means your company will have more space to develop insightful products and useful offers for customers, thereby driving overall profitability upwards.

Traceable and Transparent

The need to ensure data accuracy and integrity is one major reason manually compiling data for regulatory audits is so intensely time- and labor-intensive. Inconsistencies such as double entries and erroneous calculations can cost an organization dearly in penalty fees alone. The volume and granularity of such manual work, however, makes errors all but inevitable from even the most diligent and well-trained of personnel.

Good data foundation solutions, meanwhile, will be able to gather and process even the most difficult data and standards with ease. Such software likewise comes equipped with features for extensive data tracking, ensuring full transparency and comprehensive records throughout every step of the reporting process. Your company will no longer run the risk of missing deadlines, running up substantial operating costs, or facing hefty penalties.

As data interactions accelerate and more important information from the market becomes available in real time, developing an efficient data management strategy becomes a must for companies of any side. Organizations seeking to operate competitively today need a solid data foundation that can help them adapt to and rise above the demands of the current business landscape.