4 Business Finance Strategies You Need to Know About

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StrategyDriven Managing Your Finances Article |Financial Strategy|4 Business Finance Strategies You Need to Know AboutAs well as focusing on improving sales and generating more profit, all businesses also need to understand how to manage their internal finances and stay on track. Any slip in your financial strategy could have a negative effect, which can harm your business in the long run.

Why Do You Need a Financial Strategy?

To pursue your goals as a business, you need to understand your finances and how your funding is going to allow you to accomplish those goals. Having financial strategies in place means you can better focus your money on the things which matter, namely, the development and growth of your business.

Here are four financial methods you can implement to help your business stay on track.

1. Consider Your Funding Options

If your main financial concern is gaining the required funding to get your business off the ground – whether this is a small business endeavor or an entrepreneurial mission – then you will need to consider your funding options wisely.

You should always look for a funding option that you know you can comfortably pay back, and which eliminates any extortionate extra costs. Businesses like Become.co stand ready to help those businesses who might be unsure about the funding options available to them and would like to explore the possibilities.

2. Control Your Expenses

Have a solid business idea, product or service does not necessarily mean that it will be a financial success. What matters more in business – especially during the growth period – is always staying on top of your business expenses to ensure that your business does not fail very quickly if it does not make a high amount of sales in the first instance.

You should implement a firm strategy which allows your business to work at its most productive, for minimum cost. Understanding your set outgoings and look at ways in which you can reduce any expenses if your business sales are at a low.

3. Manage Any Business Risk

This doesn’t just mean financial risk; it means any variability within your business, which could compromise its ability to make a solid profit. This could include:

  • A new business competitor
  • Change in the demands of consumers
  • Environmental factors, such as bad weather, meaning deliveries cannot be made, and therefore orders cannot be processed
  • Technological issues
  • Change in technology
  • Change in business regulations

Only by understanding the risks posed to your business can you work to set up safeguards against them.

4. Don’t Put All Your Financial Eggs into One Basket

You don’t want to have pooled all your assets and resources into one area, only to have that area fail. By spreading out your investments and resources, you are securing less vulnerability if one of these areas should go wrong. When making investments within your business, think about a broad range of unrelated options that let you spread out your finances and assets into many different areas for more financial security.

The Importance Of Personal Loan To Start Or Expand A Business!

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StrategyDriven Managing Your Finances Article |Personal Loan|THE IMPORTANCE OF PERSONAL LOAN TO START OR EXPAND A BUSINESS!Throughout all stages of your life, everybody needs more money. Maybe they want to buy their desired items, but because of a lack of funds, they seem unable to buy. The problem here is that someone who has very little resources at a certain point has no obligation to see hopes and aspirations? Is he not allowed in time to meet his wishes?

Does he have to come back to reality? Yes, since these questions are answered. For such reasons just loan services are present.

Loans for those crucial situations that may happen at any moment are handed out to people. Throughout any lifetime there may be a case where you desperately need money. At that same time when you do not want the colleagues to make money.

Every crisis can arise when a great deal of money is needed. There are different kinds of loans, such as home mortgages, personal loans, college loans, corporate loans, etc. Every kind of loan that is required can be taken.

Loans are of various kinds, however, the important ones we are dealing with in this section are personal loans. The various loans are distinct and intended for multiple uses, however, personal loans are sometimes used for commercial reasons. It is, therefore, necessary to realize whether this should be achieved, and whether or not it makes perfect perception to have a personal loan. If you want to

If anyone wants to know what is probably the fastest loan? Click here to find the cheapest and quickest loans in your area. However, the importance of personal loans for starting or expanding a business is mentioned here.

IMPORTANCE OF PERSONAL LOAN FOR A BUSINESS

Take the following into consideration, but keep in mind that the optimal loan service relies on a range of factors, such as the lender’s performance, wages, properties, standard payment period and original intent of line of credit or mortgage.

1- Charges for start-up

Credited resources help to pay investment costs for businesses. Crediting capital is among the most important causes of finance for smaller companies. Tiny management of companies. Even new businesses increase their loans over upfront costs. The reality that the lenders want to depend on loans, deposits and credit cards to finance new business transactions does profit entrepreneurs from the liquidity of entrepreneurs. Consumer loans reduce the individual financial burden that corporate owners carry on at the beginning of a new venture.

2- Support Building

For entrepreneurs, a strong business credit history is beneficial as it improves the reputation and potential of the enterprise to encourage new investors in the prospect. A business loan is a mortgage that only occurs in the original company and is distinct from both the personal loan of the company owner. The loan is generated by the applicant as it makes regular payments to credit companies who provide a credit history for the new company.

3- Specifications are minimal

If the money required is high, a private loan can be allowed. The fee is disbursal and therefore does not involve the same amounts of paperwork as a business loan. It might be all right so that you can get a personal loan if you ever need a couple of short amount of money.

4- Tools for reimbursement

Companies are generally able to repay debt more flexibly than persons. To companies with insufficient liquidity to reimburse money borrowed, this one is important. Some companies pay debts per month, although new companies might have the choice of structuring their expenses so that, if the company becomes less successful, it is smaller at the start. As long as the company earns money, payments continually increase.

5- Deductions on investments

The Financial services authority provides entrepreneurs with the right to subtract justifiable business costs. Owners of businesses can subtract against their income tax report the interest charged on commercial loans. This is good for begin-ups that need to recycle their earnings into the venture.

6- Making Tax Payments

Your projected annual tax contributions cover no rate, quick-term government loans, and state taxes. Why are you making payments on the money that you earn?

Secondly, because it needs the profitability. You may not even have sufficient money inside to make equivalent contributions if you are running an enterprise or sole owner who receives unusual or periodic profits–like a cafe or an accountancy agency that specializes in professional services. You will settle the debt by the complete declaration deadline or immediately thereafter by using credit cards to pay the taxation. Without such a prolonged zero percent APR contract period for several months, however, higher interest rate rates undermine over longer periods the collection of credit card taxes. A personal loan of less value is a much more affordable option.

7- Protection

Personal loans are unprotected in default, implying that, broadly speaking, you do not require protection to enjoy the benefits of them. On the other side, corporate mortgages are often free, so you need to guarantee it. If you don’t have or do not want to have leverage for a loan, revolving credit is a great way to increase funds.

8- Time and return date

If the purpose of a mortgage is to offset an immediate cash deficit a personal loan can be significant. Even though you have unsecured loans to deal with such circumstances, it is appealing because of the relatively easily of accessing a private loan. Furthermore, you may choose a private loan for the company, when you are confident that you would be able to pay back the sum inside the specified period or perhaps even i.e. before-pay the project.

Conclusion

You’ve got opportunities. Assess the personal and business accounts, have your investments to allow your company somewhat more intimate and consult with a mortgage professional to give you some idea if your investment makes complete sense. An actual lender’s credit history is based on a personal loan. You might or could never take a personal loan when you do have debts available now, based on your salary.

4+ Reasons Why Your Business Needs An Accountant

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StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An AccountantWhether you’re starting up a new business or have a successful one already, you may feel like you don’t need to use an accountant. After all, if your financials are simple enough to calculate, why pay for the services of an accountancy firm?

Well, whether you may wish to admit it or not, there are actually several reasons why it makes perfect sense to use an accountant for your enterprise. Here are seven of the top reasons to enlist the services of a local and reputable accountancy firm:

1. You can ensure your tax affairs are all in order

Let’s face it: one of the reasons anyone hires an accountant is because they want to lower their tax liability. The thing is, if you attempt to manage your firm’s financials yourself, you could be in danger of paying too little tax. It’s for that reason alone that an accountant can make sure your tax affairs are all in order, especially with things like IR35 and capital gains tax.

2. You find dealing with finances rather boring

Trawling through tens or even hundreds of documents to determine things like turnover, profit and loss, and tax liability isn’t the most fun job in the world. If you haven’t got a head for numbers or just find the idea of dealing with company accounts boring, you are most likely to make mistakes in your calculations. That’s why it’s best to leave such tasks to professionals.

3. You can get advice on improving your business

It goes without saying that accountants have an intimate insight into the financial health of each client’s organizations. With that in mind, when an accountant works on your firm’s financials, they are best placed to advise you where you could improve things in your business to increase profitability. For example, they can suggest ways to save money by cutting out certain expenses.

StrategyDriven Managing Your Finances Article |Why Your Business Needs an Accountant|4+ Reasons Why Your Business Needs An Accountant4. You want to raise extra capital for your business

If you’re planning an ambitious growth project for your business, you may find that you need to secure funding from a third party such as an angel investor or your bank. Before you can ask anyone to lend you some money, you need to provide a detailed insight into your company’s financial health. You will also most likely need to provide financial forecasts to show that your business is a viable one. An accountant is the best person to ask for help with such requirements.

5. You need to have an audit

There are times where businesses must legally oblige with audit requests from government agencies such as a tax office. Some business owners panic when they must comply with audit requests, especially when they’ve been taking care of their financial paperwork themselves. Luckily, an accountant can make it easy for you to provide the required documentation for any audits.

6. You want to sell your business

If you’re planning to retire soon, you are likely going to sell your business and use some of the proceeds to have a comfortable retirement. An accountant can help you determine the value of your business.

Just for Entrepreneurs: How to Choose the Right Financial Adviser

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StrategyDriven Managing Your Finances Article | Financial Adviser | Entrepreneurship | Just for Entrepreneurs: How to Choose the Right Financial AdviserWhile most entrepreneurs know their industries well, many are not experts when it comes to money. To help entrepreneurs succeed financially at work and in life, they need both a great CPA and a trustworthy financial adviser. Ideally, with the right people, one firm could serve both roles. It’s possible, in my opinion, to work with two different firms, but coordination is essential to keep critical information from falling through the cracks.

What are the characteristics of the “ideal” adviser? To me, it’s all about trustworthiness, the existence of a solid process, and a holistic approach that considers all aspects of an entrepreneur’s life and business.

Defining “Trustworthiness”

How do you know whether your financial adviser is trustworthy? The perception of trustworthiness is subjective, but to me, it’s more than just likeability. It’s also more than friendship, or a reputation based on a referral from a friend, boss, relative or coworker. By “trustworthy,” I mean an adviser who isn’t considering his or her wallet when offering guidance: a person who always puts the client’s agenda first.

It’s true that some financial advisers are required to place their clients’ interests before their own because of the fiduciary standard established under the Investment Advisers Act of 1940. However, that standard only applies to certain types of advisers in specific situations, all of which the layperson is usually unaware. Finding an adviser who is required to meet the standard is one thing; finding an adviser who embraces the standard as a mindset, and who structures fiduciary processes to support the standard, is ideal. Look for an advisory firm accredited by the Centre for Fiduciary Excellence, or CEFEX. CEFEX-certified firms voluntarily undergo annual audits to verify their adherence to best-interest standards. This is supplemental to regulatory or government oversight.

Why Process Is Important

Your financial well-being is a big-picture scenario. All of the moving parts need to work together, and your adviser needs to be confident that his or her process compensates for blind spots and avoids errors. In his book, The Checklist Manifesto, author Atul Gawande discusses the difference between someone with “aptitude,” (the natural ability of a person to be able to accomplish a certain skillset) vs. “eptitude” (the application of knowledge correctly and consistently). High-performing advisers demonstrate eptitude by having strong processes in place to identify and understand your needs, and monitoring those processes to make needed adjustments. Any adviser should provide a great deal of clarity about what you can expect from the relationship. In addition, he or she should be skilled and confident in connecting your business growth with integrated and holistic wealth management that includes tax, financial and investment strategies.

It’s important to understand that a good process informs strategies, which determine the tactics you and your adviser will take toward your financial well-being. Entrepreneurs know that complexity (and sometimes, chaos!) can be the rule in getting a business off the ground. Having a trustworthy adviser who can guide you through these types of situations will help you sleep better at night.

The Need for a Comprehensive Approach

Entrepreneurs have far different financial situations than those with regular, salaried jobs, yet most advisers provide only investment consulting. Entrepreneurs need more. A financial professional suitable for an entrepreneur should ask such questions as: What was your objective in setting up the company? Was it just to have an exit strategy sale? Was it to provide a service to your clients on an ongoing basis, and then to ensure that continued as your legacy? Do you want to help your employees save for retirement, and how? Who, if anyone, are you grooming to take over your business? How can you minimize the impact of taxes that diminishes your wealth over time?

An adviser who can go beyond investment consulting has to have a very different mindset than the average adviser. The shift is from that of a master-builder, as Gawande describes in The Checklist Manifesto, to a more collaborative mindset. In premodern times, as the great cathedrals of Europe were constructed, the master builder held all of the necessary knowledge in his head and directed huge teams, but the projects were not collaborative. Today, complex large structures involve a team of architects, engineers and others who work together in constant communication. The financial services industry is on the cusp of a similar shift. Instead of working with one “perfect” adviser, entrepreneurs should look for firms with diverse master-builder teams who collaborate with, and on behalf of, the client to find creative solutions that work well for the inherent complexity of entrepreneurs and their businesses.

Choosing the right adviser is well worth the time and effort, even for the busiest entrepreneur. With the right person to watch your financial back, you’ll have the freedom to focus on what really matters to you: your family, your goals, and your company.

About the Author

StrategyDriven Expert Contributor | Wayne B. Titus III, CPA/PFS, AIFAWayne B. Titus III, CPA/PFS, AIFA founded AMDG Financial and AMDG Business Advisory Services in 2002 based on his 15 years’ experience at two large accounting firms working with Fortune 50 clients. He dove into entrepreneurship to make a bigger impact on people’s lives. As a fee-only fiduciary adviser, his loyalty is to his clients: he places their interests ahead of his own or his firm’s. With assets of more than $150 million, AMDG Financial integrates tax, financial and investment strategies to help clients make financial and life transitions successful on purpose. The company’s credo is, “From financial wisdom, better stewardship.” His latest book is The Entrepreneur’s Guide to Financial Well-Being (Lioncrest Publishing, March 2019). To learn more, visit amdgservices.com.

IT Expenditure: What Should a Realistic IT Budget Look Like in 2020?

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StrategyDriven Managing Your Finances Article | IT Budget | Entrepreneurship | IT Expenditure: What Should a Realistic IT Budget Look Like in 2020?Every business needs to have an IT department of some sort, whether on-site or remotely, in order to keep their company afloat. So much relies on computers that if they suddenly stop working, your business stops moving.

That being the case, it’s not uncommon to see much of a business’s finances go directly into making sure their IT services continue to run smoothly. But how much do you really need to be spending on an IT budget – and how much are you already spending?

There are limits to how much you should be putting out for the services you receive. This article goes in-depth with how your 2020 budget should look like for your IT software and troubleshooting needs, so you won’t spend any more than necessary. Read on to find out more!

Your IT Budget Will Increase Most at the Beginning of the Year

New year, new you – and new business. Your company is bound to shape up and adopt the “out with the old, in with the new” rhetoric. That most likely also means you’ll be getting rid of old hardware and software and investing in new tech.

Of course, this is bound to bring up the IT bill initially, as the purchasing and the installation of new equipment will be added to the tab. In most cases, however, it will pay for itself in the long run, so the initial purchase shouldn’t be seen as something scary.

Streamlined Operations Will Save You Money

As technology gets better, it becomes easier to use the software to our advantage. These streamline operations will allow you to not only better serve your customers, but will save you money as well.

There will be minimal confusion on what you need to conduct B2B and B2C interactions as well as in-house operations, and the lack of complexity will free up the IT department from working on the small stuff and allow them to focus on what really matters.

Internet Is Faster at Relatively the Same Price

Businesses need internet, and it’s good to know that each year companies are able to make their services faster. It’s even better to know that, due to competition, the internet is still being sold at the same price – or in some cases, even less.

This is good news for you as that means you get better services without the higher price, allowing you to place the money you’ve saved onto other important aspects of your business.

To make sure you stay up to date on how much you’re spending on IT needs, you’ll want to use an organizational tool such as a NetSuite price cheatsheet to make sure you know where every penny goes!

Stay Driven. Be Successful

You know what you should be spending on your IT budget for your computer needs, so now you’ll be able to watch your money flow and still get things done. But that’s only the beginning of what you need to know to help your business succeed.

At StrategyDriven, we help focused and goal-oriented business owners like yourself take on the competition and succeed in their field. We offer help from all angles, including formatting and executing business strategies, management and organizational programs, and more.

Ready to get started? Click on any of the tabs on our site to learn more about what we have to offer you. We’re sure that we can help your company to win!