What Are Your Options To Fund a Business?

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StrategyDriven Managing Your Finances Article | What Are Your Options To Fund a Business?If you are thinking about starting a new business, there are a lot of factors that you need to consider. One of the most important factors of how you are going to fund your business. Without capital for your business, it doesn’t matter what else you have for your products and services. You will not be able to pay for inventory, purchase supplies, or pay for marketing. Therefore, you need to take a closer look at the options you have available for raising capital. What are a few of the top options you have at your disposal?

You Can Start by Bootstrapping Your Company

A lot of people get their businesses off the ground through something called bootstrapping. This is the process of taking your savings and using it to get your business through the early stages. The biggest benefit of dipping into your own personal savings is that you will not have to worry about paying anyone back. On the other hand, you probably only have so much money in your savings account. What are you going to do when this money runs out? That is why you need to learn more about some of the other options that are available.

You Can Ask for Help from Family and Friends

If you are looking for a way to raise money for your business, you may also want to consider asking your family members and friends for help. In a lot of cases, they could be willing to offer you a loan without interest. Before you think about taking out loans that have interest attached to them, you should reach out to family members and friends to see if they have any options available. In order for you to run a successful business, you have to learn how to take vantage of your connections. The first connections you need to lean on are your family members and friends. They might even be willing to simply give you money in exchange for a souvenir or prop from your company, such as a coffee cup or a T-shirt.

You Can Look at Venture Capital Options

Another option you might want to consider if you are thinking about ways to raise capital for your company is through something called venture capital, such as Patrick Chung of Xfund. The idea behind venture capital is that you pitch your business and how it works to a board that has a lot of money to spend. Then, if they believe in the premise of your company, they will give you the money they are looking for in exchange for a small percentage of equity in your company. You ought also to have access to experienced business owners and leaders who can provide you with the guidance you need to take your business to meet heights. If you are looking for funding for your business in addition to experts who can help you, this could be an option that you would like to consider for your company as well.

You Can Give Crowdfunding a Try 

You may also want to try something cold Crowdfunding. Crowdfunding is the process of raising small amounts of money from a lot of people. For example, you may want to use a website that can help spread the word about your business. Then, by explaining what your company does, you may have people who are willing to offer you small donations. If you are willing to offer a small souvenir, such as a keychain, you may be able to collect donations for more people while still turning a profit on that small keychain. Consider using crowdfunding to help you raise money.

You Can Apply for a Business Loan

Finally, you can also go to the convention in route, which is applying for a loan from a small business company. Keep in mind that you are going to have to pay this loan back with interest. You also need to convince the lender that your business is going to be a success. If you do not have any other options, you may want to consider applying for a small business loan from a bank or credit union.

Raise Money for Your Business

These are a few of the many options you have available if you are trying to raise money for a business. You need to think carefully about where the money for your business is going to come from. If you do not have enough capital to market and develop your products and services, you will not be able to meet the needs of your customers. Fortunately, there are professionals who can help your business raise the money it needs. If you work with the pros, you can focus on the more exciting parts of your company.

10 Steps to Take if Your Business is Going Bankrupt

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StrategyDriven Your Finances Article |Going Bankrupt|10 Steps to Take if Your Business is Going BankruptIf your business is facing the prospect of insolvency, deciding what steps to take can prove to be incredibly tricky. If that sounds familiar, then the following post should come in handy…

The prospect of going bankrupt is something every business needs to consider. In an ideal world, every business would be successful enough to bring in a steady cashflow and keep themselves operating at a sustainable level. Unfortunately, though, we don’t live in an ideal world!

If your business is in debt and is no longer in a position to repay this, it might be necessary to file a bankruptcy petition (also referred to as insolvency petition). This is where a business has to restructure their company debt, contacting their debtors to arrange manageable payment instalments or liquidate assets to pay off outstanding debts.

In this post, we’ll be informing you on the 10 steps, like these, you need to take if your business is facing insolvency or bankruptcy proceedings. This way, you can be sure that you come out the other side with your business still intact.

10 Steps to Take for Businesses Facing Bankruptcy

1. Take Stock of Existing Debts

First things first, if your business looks to be staring down the barrel of bankruptcy or insolvency, then you need to take some time to account for all of your existing debts.

Take stock of who all of your existing creditors are, how much money they are all owed and when the debts are due to be repaid. This will allow you to effectively plan out and prioritise the debts, which will help to prevent the situation from escalating any further.

2. Contact Creditors Directly to Reach an Informal Agreement

If you’re familiar with your creditors, then it’s certainly worth getting in touch with them directly to see if you’re able to come to an informal agreement regarding your debts.

Whether or not you’re able to come to an informal agreement is context-dependent, but there’s no harm in reaching out to them. There’s always a chance that, if you’re seen to be proactive about the situation, your creditors are more likely to work alongside you, rather than against you in the form of legal action.

3. Always Act to Maximise the Interests of Your Creditors

Becoming bankrupt or insolvent will, of course, have a big impact on your business’s general cashflow and company revenue. However, you need to remember that you should always concentrate your efforts on the interests of your creditors, as opposed to generating your profit.

This will prevent your business from incurring further debts, which will leave your business in an even more precarious position.

4. Keep Your Employees in the Loop

If you have employees under your watch, they have a right to know what sort of situation the business is in. You don’t have to fill them in on every single minute detail (unless they are keen to know themselves). However, you should be open and honest about the fact that you could be heading towards bankruptcy or insolvency.

Your employees will then have a better understanding about what their priorities should be. They may even be able to play a part in keeping the business running and out of further financial trouble.

5. Carefully Consider Certain Assets That Can be Liquidised

If you know that you’re going to struggle to repay your debts through traditional means, or you can’t make a sensible payment structure with your creditors, then you should consider the sorts of company assets that can be liquidised to pay off the debts.

These will usually be assets that can be considered non-essential (for example, company cars).

6. Speak to the Insolvency Service

The Insolvency Service is a Government agency that helps to deliver economic support and advice to businesses who are in financial distress. They focus on tackling any financial wrongdoing and maximising returns to creditors.

They aren’t allowed to give your business any legal or financial advice. However, they’re on hand to give you information about the processes related to bankruptcy, debt relief orders and liquidation.

7. Weigh Up Alternative Finance Options

There are a number of different alternative finance options you can consider for your business if you’re facing bankruptcy or insolvency.

For example, you might want to consider invoice financing. This is where a third-party provider agrees to buy your unpaid invoices for an upfront fee of up to 85 percent of their value. The finance provider then collects the payment from the debtor when it’s due and pay you the balance, minus a small fee.

8. Restructure the Business

You may need to restructure the business in the short term to ensure that your creditors are paid. This will involve everything from looking at your current staff, outsourcing work, downsizing or moving your office premises.

These changes don’t have to be permanent if you don’t think they would be appropriate for the long term – though many businesses find that making these changes are vital for the survival of the business.

9. Enter into a Company Voluntary Arrangement (CVA)

A company voluntary arrangement (CVA) is a formal and binding agreement between an insolvent company and its creditors. This is for the payment of a debt in full, or in part, over an agreed period of time.

They typically last for five years and, for them to be agreed, 75 percent of the company’s creditors must agree to accept the proposal. Once the CVA has been agreed, your business can resume trading.

10. Inject Personal Money into the Business

This is a risky strategy and should only really be considered if there are few other alternatives. Many directors and business owners inject personal money into their business when times are hard, either through a personal loan or a credit card. It’s seen as a sensible approach, according to an independent financial advisor.

Is Your Business Facing Bankruptcy or Insolvency?

And there you have it! If your business is facing a threat of bankruptcy or insolvency, the steps outlined in this post should give you a better idea as to what you can do to ensure that you’re able to come out the other side stronger.

If you’re facing bankruptcy, or have already been through bankruptcy proceedings with your business in the past, why not leave a comment below with your own tips?

Credit Dependency And How To Reduce It

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StrategyDriven Managing Your Finances Article |Credit Dependency|Credit Dependency And How To Reduce ItBeing able to rely on credit to help you make purchases and achieve your dreams is something we are fortunate to have. As saving huge sums can be time-consuming and difficult for some to do regularly, being able to take out a loan or get approved for a credit card helps bridge the gap and speed up the process. However, there can be too much of a good thing, and becoming credit dependent is not an ideal situation to be in. So, how can you avoid becoming credit dependent and what can you do to reduce your reliance on borrowing?

Borrow Only When You Need it

If you are in the habit of borrowing money regularly, whether it be to maintain a certain lifestyle or make purchases you otherwise couldn’t afford, this is a sign you have a credit dependency. Ideally, you should only be choosing to borrow money when you really need to, for example, in an emergency when you have no available savings. Payday loans UK lenders are available for this reason to provide short term help when the unexpected happens. Borrowing this type of loan when you have no other available options is more justifiable than continuous borrowing for non-essential reasons. If you can avoid borrowing money to pay for purchases, this will reduce your credit dependency.

Start Saving More

The quickest way to reduce your overall credit dependency is to boost your savings each month. The more money you have put aside, the less you will need to rely on borrowing. If you are someone on a low income, the amount you can save maybe less than others, but even a small amount is a start. Eventually, you will have enough savings to cover any unexpected expenses or to put towards larger purchases such as a deposit on a property or vehicle. Whilst it can be easy to take out credit for big-ticket items you want, having money you can put towards a larger deposit will help decrease how much in total you need to borrow.

Review Non-Essential Spending

One of the main issues for those with credit dependency is having very little disposable income. If the majority of your income disappears quickly each month, leaving little for anything else, this could indicate your finances are overextended. The best way to find out why is to review your expenditure so that you can discover exactly where your money is going. What many people may find is once their essential bills are covered, they in fact do have disposable income but this has been depleted due to non-essential spending. It can be easy to spend a little every day without realising how much in total you are spending throughout the month. If need be, set a budget of how much you want to save from your disposable income and what you can spend on non-essential purchases. This way, you’ll reduce how quickly you run out of money each month and your credit dependency should reduce too.

Once you become dependent on credit, it can be difficult not to stay in this cycle. The risk can be eventually falling into financial difficulty where it will be even harder to resolve. By taking steps as soon as possible to reduce credit dependency, you can reduce debt and put money towards your financial goals.

Business, Investment, and Charity

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StrategyDriven Managing Your Finances Article | Business, Investment, and CharityThe joy of any business is the Return on Investments (ROI). Also, the money you will accrue from the investment can go far in doing great charity in society today. However, before starting a business or investing, you might want to ask yourself how viable the business or investment is. That is when you should start thinking about a community-oriented charitable project. Therefore, if you are lucky enough to meet someone like Fred Baerenz, you might not want to miss the chance to pick his brain on how he seamlessly gel business, investment, and charity. By the end of the conversation, you may be an idea away from being wealthy as you desire.

What should you look for in a business investment? 

Business and investment are not easy, but you will be smiling your way to the bank once you do it right. It is practical to know that you will not always get it right as desired, but the journey is worth the cost. Before considering a business investment, there are many factors to consider. The world of business is dynamic and tying it with investment makes it even more dynamic. However, with the right team and tools of the trade, you will scale high in business as an investment. The research on the market will be a good place to start. The opportunity and niche presented should be sustainable enough at last for your capital.

Charity investment

Business flourishment will bring activities such as Corporate Social Responsibility (CSR). Everyone has responsibility around the community of their establishment, if not the world. Considering activities such as children’s funds and supporting climate change are just a few of the CSR charity investments one might consider. Building a sustainable CSR goes hand in hand with building the business. Charity investment comes with its share of challenges and benefits.

In conclusion, the desire to build wealth is admirable and takes too much patience and strategy. Either through business or investment, success is a journey that takes resilience. The moment you will find yourself in magazines such as Forbes and your name all over Wall Street, you might want to consider joining AOG Wealth Management to secure your future. The billionaires club has its privileges but maintaining the status is what matters. Therefore, learning how to stay on top of your business, investment, and charity is important in any cooperate world.

Bookkeeping Tips For Entrepreneurs

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StrategyDriven Managing Your Finances Article |Bookkeeping Tips|Bookkeeping Tips For EntrepreneursBadly managed and improperly handled finances can cause a lot of serious issues for any business, from poor cash flow to legal action from tax mistakes. These problems can put a new business at serious risk. Good bookkeeping and accounting habits can help an entrepreneur to do well. Learn these important habits to help your business to succeed.

Get Professional Help To Prepare Tax Returns

Business owners have a lot of different tasks to juggle and a lot to do. This is why it’s a good idea to outsource any work that you don’t have the skills or time to do by yourself. If you’re like a lot of entrepreneurs, you’re probably not a trained accountant and don’t have the time to become a certified bookkeeper.

Outsourcing the job or using virtual bookkeeping services gives the task to somebody who can do it faster and more accurately, which is a better plan than struggling with it alone.

A professional accountant can do a lot more for you than just sort out your tax return. Someone with a skilled financial eye can see ways to improve your accounting processes too.

Don’t Go Entirely Hands Off

Outsourcing your bookkeeping doesn’t mean you should hand it over completely to someone else. You still need to look at your reports, understand what’s happening with your finances, and ask questions when you don’t understand anything.

No matter your own level of bookkeeping knowledge, it’s a good idea to have some understanding of basic numbers yourself, such as your profit, trend in expenses, accounts receivable, profit per customer, and how your client funnel works.

Get The Right Software

You shouldn’t choose an accounting program just because it’s the cheapest option. There’s a lot of choice for software available, so businesses don’t have to use accounting software that is only designed for accountants.

There are plenty of choices available, so look for software that will meet the needs of your business. If you’re not a trained accountant, then don’t choose a system that will need a huge manual to get you started.

Document Your Processes

It can help to write documents that explain how your bookkeeping processes should be managed. By documenting all these processes you can prevent any confusion and answer any questions that people might have.

Consistency is essential for good bookkeeping and can help you to spot issues as you will have a better notion of what might have gone wrong.

Keep Expense Receipts

You can’t keep track of how much your business is spending if you don’t keep your receipts organized. This is easy to do for credit card purchases, as you will have your receipts and your monthly statements to check the receipts against.

Cash expenses can be more difficult to track. The receipts from cash purchases are important as there are no backup statements to double-check. Try keeping a small notebook to log cash expenses. You could do this in an accounting app in your phone, and take pictures of the receipts as you go.