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10 Tips for Managing Small Business Finance

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StrategyDriven Managing Your Finances Article |Small Business Finances|10 Tips for Managing Small Business FinanceManaging your small business finance is crucial to maintaining stability and growing your business over the long run. From setting a budget to regularly monitoring your books, you should be proactive when it comes to managing your finances. Here is everything you need to know about managing your small business’ finance.

If you want to ensure long term growth for your company, then managing your small business’ finances is a top prerogative. From paying your employees to purchasing supplies, cash flow management is crucial to business success. Small business owners often make mistakes that, such as not separating personal and business accounts, or not paying taxes in time. Some small business owners avoid taking loans, out of fear that they’ll only be an additional financial burden.

Many of these ideas affect sustainability as well as scalability for your business. Here are ten financial management tips that will help you grow your small business:

1. Keep Your Business and Personal Account Separate

As a small business owner, starting a business bank account should be your priority. There are several benefits you gain from a business account, such as incentives, interest rates etc. that are not made available to personal bank accounts. You also ensure that financial matters related to your business is conducted through your business account only – this includes business taxes, overhead costs and paying employees.

2. Pay Yourself

Small business owners also make the mistake of not paying themselves, thinking that the extra capital can help the business. However, despite being a business owner, you also need to take care of your own expenses. Remember that you are also an employee of your business, and that means that you should be paid accordingly.

3. Loans Can Help You

Don’t be afraid of business loans. Loans can help you scale your business. Not every business owner has the capital to purchase expensive equipment, or purchase surplus supplies during a time of high demand. A business loan can help you grow your business. When done right, the return on investment is more than enough to compensate your loan as well as the interest on that loan.

4. Maintain Good Credit

This means that you need to pay your credit card bills on time, pay off any loans by the time they are due, and file your taxes on time. Good credit can help you down the line when you need to get approval for business expansions. Say you want to purchase more property, or take out a business loan. In these situations, good credit can help you get what you need to grow your business.

5. Invest in Business Growth

Your small business might benefit from better equipment, more employees, or an additional store at a good location. Investing in such opportunities helps your business to grow. At the same time, partners, lenders and even employees are more likely to see you in a positive light. This is as they see that you understand the potential of your small business, and are willing to invest in its growth.

6. Create a Budget

A budget is the easiest way to ensure that you don’t spend more than you can afford to. Every business has three costs – one time costs, recurring costs and variable costs. One time costs include equipment purchases, property purchases etc. Recurring expenses are bills, taxes, payroll, overhead costs etc. Variable expenses can come out of anywhere – such as business travel costs. Keeping these in your budget prepares you against any business disruptions.

7. Monitor Your Books

Even if you have a bookkeeper, you should also be aware of your income and expenditure. Look at your books every month so that you’re aware of your business’ cash flow.

8. Negotiate With Vendors

If your small business purchases supplies from vendors, then don’t sign any contracts immediately. Negotiate with them and see if you can bring the cost down. Ask them about grace periods and penalties in case you’re late on payments. Ensure you’ve met multiple vendors so that you know you’re getting the best deal.

9. Inspire On-time Payments for Clients

Some clients and customers don’t pay on time. If this happens to your small business, then you could find that your cash flow is being affected. Introducing incentives in the form of discounts can help you mitigate these issues. Tell customers tat if they pay on-time, they can get a 5% discount, or else they have to pay the full amount. Introduce penalties for payments that are overdue past a grace period.

10. Think Ahead

Sustainable business growth depends on a long term strategy. You need to think ahead, invest in the future and continuously grow your business in order to succeed over the long run.

It is also important for your small business to have the best business insurance. To know more, click here.

Sources:

  1. D’Angelo, MAD, Updated January 7th 2021, ‘10 Tips for Managing Small Business Finances’, viewed 11th February 2021, https://www.businessnewsdaily.com/5954-smb-finance-management-tips.html
  2. Gregory, AG, Updated October 21st 2019, ‘5 Everyday Money Management Tips for Small Business Owners’, viewed November 11th 2021, https://www.thebalancesmb.com/money-management-small-business-owners-2951600
  3. Ignjatovic, AI, February 15th 2019, ‘The Entrepreneur’s Guide to Small Business Finance’ viewed 11th February 2021, https://www.shopify.in/blog/small-business-finance
  4. Square Contributor, September 25th 2020,’How to Manage Your Business Finances’, viewed 11th February 2021, https://www.forbes.com/sites/square/2020/09/25/how-to-manage-your-business-finances/?sh=452d16b237fc

Starting Your Own Business

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StrategyDriven Starting Your Business Article |Starting your own business|Starting Your Own BusinessYou’ve had a business idea in your head for some time and you’re just now ready to put it into action. Maybe you have a fresh, new startup plan that you’re ready to build from the ground up. Or, perhaps you plan on buying an established small business. Either way, starting your own business is an exciting, albeit challenging, life journey, that can be very fulfilling.

There are several considerations when it comes to starting your own company. While there are many technical and legal steps you need to complete to open your doors for business, this article is focused on the personal qualities necessary to be a CEO. Here are some suggestions to keep in mind when chasing your entrepreneurial aspirations.

Make sure you’re ready.

Timing matters, but at a certain point, there likely will never be the perfect time to start your own business. For every reason to take the leap, there might be several factors that point to why you should wait. That is why it’s essential to ask yourself if you’re in the right mindset to take on the challenges that come along with owning a company. Are you ready to turn your career into a 24/7 lifestyle? If the answer is yes, then shoot for the stars.

Say goodbye to your 9-5.

Speaking of adopting a 24/7 schedule, understand the limitations of a work/life balance when you become the owner of a business. When you eat, sleep, and breathe your career, time becomes a lot more valuable. You’ll always be on the go, forcing you to adapt your old ways of doing things. To avoid over-scheduling yourself, you’ll want to find time-saving solutions to give yourself more hours in the day. For example, you can use a household delivery service and have your weekly staples brought to you, saving you time otherwise spent at the store. And with a personal assistant app, it’ll be easier to keep track of your daily to-do. Finding little ways to save you even just a few minutes will add up over time.

Set reasonable and realistic goals.

Especially if this is your first venture as an entrepreneur, being realistic about your goals and expectations is fundamental in maintaining your sanity. Optimism is important, but naive optimism can hurt you. Owning your own business has a steep learning curve and every day will have its own lesson. Your company probably won’t outsell your competitors in your first month of business, and that’s okay. Set goals that will encourage you to create the best company possible, and if applicable, be a great leader to your team. Perseverance and patience are key in helping you learn and grow as an entrepreneur, and will pay off in the long run.

Find a mentor.

The only people who will understand the trials and tribulations of starting a new company are other entrepreneurs. Because of this, surrounding yourself with others who have had similar experiences as you can prove to be an excellent resource for you to consult. You can bounce ideas off of them, share goals, and receive constructive feedback, a fundamental component of success and growth. If you don’t know any other business owners in your immediate circle, you can still find people to connect with by other means. Go to networking events, check out your city’s startup incubator, utilize a mentorship network like SCORE, or turn to LinkedIn, Twitter, and other social networking sites to find like-minded individuals. You can find a mentor practically anywhere. It’s up to you to invest in the relationship so that you can benefit from the knowledge and experiences that they have.

Have a stable financial footing.

It should be no surprise that starting a business costs money. While it can pay off tenfold in the future, there is significant financial risk involved. You’re likely leaving a well-paying and stable job when starting this journey, which is already a risky endeavor. Not to mention there are plenty of startup and ongoing costs required to keep your company afloat. You’ll never eliminate the financial risks associated with entrepreneurship, however, you can protect yourself from too much financial harm. Best financial practices are to minimize your personal expenses, reduce or eliminate debt, improve your credit score, and have an emergency fund ready. Additionally, considering the type of business structure you want to implement, such as an LLC or S Corp, can have lasting impacts on your personal liabilities and taxes. Taking the time to determine what structure fits your company best will help ensure that your finances stay in check.

Starting a new company is an exciting and fulfilling journey. However, the challenges that come along with it make it so that it isn’t for the faint of heart. Take the appropriate steps to prepare yourself mentally and financially for this new trajectory in your career.

Six Easy Ways To Raise Capital For Your Business

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StrategyDriven Starting Your Business Article |Raise Capital |Six Easy Ways To Raise Capital For Your BusinessRaising capital for your start-up or small company is probably the biggest challenge most entrepreneurs face when starting a business. This is not only a serious obstacle but also a popular excuse for many business-minded people. From renting production space or office to hiring staff and buying goods and equipment, everything you do to take your idea to profitable business requires money.

Luckily, the success stories of all the entrepreneurs show that capital is available to everyone if you turn to the right resources and get a little creative with your capital-raising options! Below we share six ideas on how to get money to fund your business.

Start With Your Own Savings

Creating a new company and running your own business can be risky. Also, this level of risk sometimes prevents traditional lenders from providing loans to entrepreneurs. This can become even more difficult if the business owner hasn’t invested his or her own money.

If you take your business dream seriously, you can consider using your savings as a source of capital. Or maybe you are willing to refinance or take out a second mortgage. You should definitely look for available options of personal financing if you are ready to take risks and comfortable with the potentially bad consequences.

Talk To Your Friends & Family Members

Your friends are always there when you need them, therefore, raising capital through your closed ones is another viable option. Try to contact your buddies to get some money to raise capital, but think about how they can benefit from the idea of lending you money and what form the funding will take. For instance, you can ask for some debt financing and then pay it back with interest, or simply you add them on as partners in your business.

Similar to your close friends, your family members and relatives can be an entrepreneur’s first point of contact for raising capital. The peculiarity of the family is that they will always be ready to help and support a good idea with financial help. The bond between your loved ones is very strong, and even if you don’t have a very good business plan, you can still raise money from your family. Remember that the amount of funds collected from your family members may not be enough; however, it is a good start.

Regardless of what you decide to do, make sure to be honest with your friends and family, realistic about how much money you need and clear about the risks; otherwise, you will not receive money even from your best friends.

Apply For Business Grants & Loans

There are various types of lenders and debt products for small business – banks, government agencies, credit card companies, online lenders and microcredit programs. All of them offer term loans, invoice financing, lines of credit, cards, cash advances and much more.

For instance, since nowadays many businesses are dealing with the consequences of the global pandemic, Coronavirus Business Interruption Loan Scheme (CBILS scheme) provides the small and medium-sized businesses with two fast and effective solutions to beat the cash flow crunch. CBILS lenders offer a hassle-free CBILS loan and a flexible CBILS revolving credit facility to get financial support and fund your business, whether you need to hire more employees, pay for your workplace or create an emergency reserve of capital.

Find Angel Investors

Angels investors are people with a surplus of funds who are usually interested in investing in new start-ups, but it is also possible to raise money for a small business in return for an ownership stake. Furthermore, they work in groups of networks to collectively review proposals before investing and can offer mentorship or invaluable advice alongside the capital.

Knowing this, angel funding can be a great source of capital for your business. First, you must have a succinct, clear and memorable pitch and a solid business plan. Since angel investors aim to fund a potentially profitable business with clearly outlined services or products and experienced leadership, you should capture their attention with enthusiasm and promising data on the current situation and future potential of your company.

In addition to visiting different events, such as fundraisers and conventions, to find angel investors, there are also various online platforms that can help you find the right people and fund your business. Angel Capital Association, Angel Investment Network and Gust are considered the most versatile online platforms for finding an angel investor for your business.

Or Venture Capitalists

Unlike angel investors, venture capitalists usually want to invest in slightly more stable and mature companies, and sometimes want to have a voice in the direction of the business and the management of its day-to-day operations.

Since venture capitalists are responsible for achieving a certain return for a firm or fund, they need positive cash-flow companies with proven products and a high potential for growth. If your company meets all these requirements, you can apply for an investment in a venture capital firm. It’s not an easy task, but many small businesses have been successful in getting the much-needed capital.

Raise Capital Through Crowdfunding

Crowdfunding is a new and quick way to increase start-up capital. Instead of focusing on a few people like your friends, investors or banks, this funding option allows you to make small amounts of money from many investors at the same time.

To launch a successful crowdfunding campaign and raise capital for your business, you need to present a detailed description of your business. This includes the goals of your business, the value of your service or product, plans for making a profit, how much funding you need and for what reasons. Then anyone can read about the business and contribute money if they like the idea.

At the same time, you should be aware that crowdfunding is a competitive place to get funding, so unless your business idea is absolutely rock solid and can convince regular consumers with a simple description and a few images online, you may not be able to raise money for your company.

5 Reasons Why Online Payday Loans With No Credit Check Are Preferred By Teachers

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StrategyDriven Managing Your Finances Article |Payday Loans|5 Reasons Why Online Payday Loans With No Credit Check Are Preferred By TeachersIt is astonishing to note that our children and our country’s future lie in the hands of people who are paid very little for the work they do. According to a survey conducted in 2020, it was found that the median annual wage for a teacher is $60,000. An alarming fact was presented through this survey that teachers’ entry-level positions are only paid $40,000 per year.

This leaves our educators no choice but to pick up extra jobs and extra shifts to fulfill their basic needs. The state of our education system rests upon the hands of our teachers. Many already have previous loans resting upon their head, either for their previous education or for a house. If they cannot pay the installments back on time, they rack up a bad credit score, which makes it extremely difficult for them to apply for another loan. This is why teachers, left with no option, choose to go for online payday loans. These are a lifesaver for teachers when they are left with no viable financial option.

Teachers are given relief through no credit check online payday loans

It is not easy living a life where you can barely cover your expenses every month. As reported by many teachers, they tend to run out of cash-in-hand by the end of the month and usually have to do some serious budgeting to get through the whole month.

Payday loans offer a lot of relief to teachers in this regard. Payday loans are short term loans that can be repaid by the borrower within 30 days, that is, till their next payday. This loan is supposed to be paid back in one go. Teachers can easily apply for a loan to get some ease and convenience until their salary comes again.

Many teachers can have a bad credit score due to late loan repayments or even late credit card payments. This leaves them no way to apply for another traditional bank loan. A lot of lenders approve online payday loans without any credit check. You can learn more about no credit check online payday loans with instant approval to see how they can benefit you. This is quite an attractive feature for teachers looking for other viable financial options.

Help offered during emergencies

How many times have you had an emergency come your way? Maybe you had to take your spouse or child to the hospital suddenly. Maybe your car broke down, or maybe you had an unexpected household expense come up. We all know how hard it can be to deal with such emergencies, especially when we do not have any savings kept on the side.

As reported by many teachers, they barely have any savings kept on the side since all their salary goes into fulfilling their basic needs and necessities. Payday loans offer the borrower money in case of emergencies. Unlike traditional bank loans, these loans are provided almost instantaneously to the applicant after approval.

This offers a huge safety net to teachers by providing them with an option in hard-hitting emergencies.

No collateral is needed for a payday loan

Loans such as business or home loans require the borrower to put up security or collateral for borrowing the specified amount. Lenders do this to guarantee that the borrower will return the loan amount within the specified time. It is quite difficult to obtain such loans when the borrower does not have any collateral to put up or is quite skeptical about it.

Online payday loans do not require the borrower to put up any collateral at all. In case the individual is unable to pay back the loan, they can simply talk to the lender about changing the payment schedule. They do not have to worry about losing their property or whatever they have put up as security. This is quite a viable alternative for teachers.

Full control over the money

Business loans can only be used for specified purposes such as construction, payments to suppliers, employee salaries, or new equipment. Similarly, home loans can only be used to purchase property, home renovations, and similar things. Such loans do not give any control to the borrower on how to spend their money.

On the other hand, online payday loans offer full control of the loan amount to the borrower. Teachers can use the loan amount for anything such as their child’s tuition, household emergencies or bills, groceries, or even just for a vacation. They can use the amount in any way they wish to.

Applications have never been this easy before

Whenever we think of applying for a loan, the first thing that comes to mind is the extensive amount of work we have to apply for a loan. Traditional bank loans require the borrower to visit the branch multiple times, fill out a ton of forms, and go through an extensive credit score check to consider the bank’s application.

This is not a viable option for teachers since most of them are working two jobs to support themselves. Payday loans can be applied for online. All you need is five minutes of your time and a good internet connection to apply for a payday loan.

Unlike the endless requirements that are needed to be fulfilled for a bank loan, payday loans only require a few things. They need the applicant to be at least 18 years of age, have a valid and active bank account, provide their Social Security number, and have a stable income source.

It isn’t charming to see the median annual wage of teachers in this country. Sadly, our educators have to resort to other methods of income to survive. Till this country gears up and recognizes the need to pay teachers a better salary, payday loans have provided immense relief. Indeed, payday loans are a perfect financial alternative for teachers. So, if anyone is distressed with their financial situation and is finding it difficult to find any reliable source to borrow money, online payday loans can be of great help.

What Exactly Are Short Term Loans?

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StrategyDriven Managing Your Finances Article |Short Term Loans|What Exactly Are Short Term Loans?When looking to aid yourself out of financial difficulty, there are several elements to consider before applying. Not only do you need to ensure that you are eligible, but you need to ensure that the lender you are using is a reliable one. To help you understand what short term loans are and how you can apply, we have provided you with a little bit of insight.

What Is A Short-Term Loan?

A short-term loan is a loan that enables you to borrow the amount of money that you need over a short time period. There are several different lenders out there that allow you to borrow the amount of money that you need should you find yourself in a financial emergency. Whether it is for a boiler repair or for an emergency car replacement, this form of finance can work for you.

How To Find The Right Lender?

When you have established that the loan type is right for you, it is then time to find the right lender. By getting a quote from several different lenders, you can find one that will provide you with the borrowing amount that you need. By spending the time looking for a loan provider that works for you, you are then able to ensure that you are paying back your monthly repayments on time with a loan term that works for you. Whether this is over the course of either 3 months or 6 months, this can benefit you in the long term.

How Do You Apply?

Applying for short term loans could not be any easier. With a number of lenders providing you with a simple to use application platform, you can simply answer the questions online and get an answer the exact same day. The lenders for this style of the loan will look into your monthly income as well as your line of credit to generate an initial offer for the amount that you are looking to borrow. By making sure you are eligible before you apply, you can ensure that you will have the money that you need in your account within 24 hours.

How Can This Loan Type Affect Your Credit Score?

As with any form of alternative finance, there is an element of risk that comes with it. When using a loan type, it is important to ensure that you are meeting your monthly repayment date. This will limit the negative impact on your credit score and ensure that you are using your monthly repayment. Buy making sure that you are meeting your repayment, you will limit the chance of defaulting payments as this can lead to debt if not careful. By ensuring that your payments are on time, you can then strengthen your finances and show that you are good with money.

Whether you are looking to apply for a loan right this second or you are looking for your options in the future. There are several loans that you can benefit from in this time.