A Good Business Financial Plan is Your Secret Weapon
Basically it's a document that contains the financial particulars of a company & generally includes the following sections:
- A balance sheet
- A cash flow statement
- An income statement
Your company financial plan is one of the most effective instruments for ascertaining whether a business model is workable. It's 'the plan' encompassing all the present financial issues as well as future predictions for the business. It's what you revert to when things go wrong and when thing go right.
It can be used
AN EFFECTIVE FINANCIAL OUTLINE SHOULD INCLUDE THE FOLLOWING DETAILS...
- Start up costs
- Operational costs
- Cash inflow
- Other relevant information
WHEN IT COMES TO FINANCING A BUSINESS, THERE ARE OPTIONS...
Option #1 - For a small home operated business, you personal savings my be enough to start up a business. You may wish to think about keeping some funds in an emergency account, just in case.
Option #2 - If you're short of cash you could approach family members or close friends and ask them if they can help. But do, think it through thoroughly.
If you're not absolutely sure that the business is a winner, perhaps you're better off not borrowing from your near and dear ones. It's happened many times, good relationships destroyed over money.
Option #3 - You can turn to the banks or credit unions for finance.
Generally this involves a meeting with the bank manager where you can explain your business financial plan and try to convince him that your business idea is a clear winner and there's no doubt that you'll be able to repay the borrowings without a problem.
Option #4 - You may wish to look for investors to finance your business. Attracting backing from a third party will be difficult and to be successful you'll require a rock solid business plan and be able to 'sell' your dream in such a way that it's irresistible.
Being able to read & comprehend complex business documents is a valuable skill to have. We all know that, in business, the paperwork in the most boring part and we can usually discover something more interesting to do.
A detailed business financial plan is possibly THE MOST important document of the many that are required to kick-off a new business venture or to fund growth for an established company.
Understanding business documents is an extremely important issue when running a business but there are more important issues ahead not the least of which is attracting new customers.
Cheap Personal Business Finance - Know It Clearly
Running a business without fund is just impossible. Finance is the main criterion for running a business. If you are a businessman and want to finance your business, you can apply for cheap personal business finance.
Cheap personal business finance is available for all types of businesses; both new and old. With it you can fulfill various purposes such as,
o You can start a new business
o You can expand your present business
o You can buy some necessary equipments for your business
o You can buy new office for your business
o You can use cheap personal business finance as business capital too
Cheap personal business finance is available both in secured and unsecured forms. The secured option comes with the requirement of a security. As a security, borrowers can use both commercial as well as personal properties. On the other hand, the unsecured option does not claim anything against the lending amount. This option is apt for those borrowers who do not have any security and who do not want to use their property for the sake of loan only.
However, if you apply for cheap personal business finance through the secured way, you can avail the amount ranging from £3000- £75000 for 3-25 years. In case of using a high valuable security, borrowers can avail up to £100,000 as cheap personal business finance. On the other hand, unsecured option allows borrowers to borrow anything in between £1000-£25000 for 3-10 years.
Availability of cheap personal business finance is not a big deal nowadays. Various banks, financial institutions, lending companies offer cheap personal business finance. But if you want to avail the amount through a quick and hassle free way, online option is the best alternative. With this option, you can get a better deal only by clicking the mouse and within a least period of time.
Ben Gannon is a senior financial analyst at Cheap Finance UK with an acumen for business and loans. In recent years he has taken up to provide independant financial advice through his informative articles. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find Finance UK, cheap used car loans,cheap personal business finance [http://www.cheapfinanceuk.co.uk/cheap-personal-finance.html], personal finance UK, business finance, small business finance,
The Benefits of Hiring a Business Financial Consultant
It's no secret that starting your own business requires a lot of hard work and research. Besides those things, you also need seed money in order to get your business up and running and that often means applying for a loan at a bank.
Getting a business loan is just like getting a loan for anything else, for the most part, but banks often require a little more information than is typical of other types of loans before they'll hand over the funds that you can use as seed money to start your own business.
That's where a business financial consultant can help.
Having a business plan in place is one of the most important things that any aspiring business owner should do. Beyond being an outline of what your business is about and how you plan to succeed, your business plan should also include a plan for how the various financial aspects of your business are going to be dealt with.
Hiring a consultant can help you to successfully navigate what is, at times, a very confusing maze of laws and rules that govern business finance. Not only can you make sure that any money that you put into your business is appropriated to the right aspects of the business but, with a consultant, you'll also strengthen your business plan so that the banks will extend a line of credit to you.
Business financial consultants typically know exactly what it is that banks look for in the people that they'll potentially extend loans to. It's important to remember that starting a business isn't just particularly risky for you; it can be a risk for the bank as well.
Banks want to make sure that they'll get a return on their investment into the business that you're starting. In order to guarantee them that their money won't just disappear, you need to have a business financial consultant's expert grasp on many of the different aspects of business finance and have everything thoroughly outlined in order to secure business funding.
Aspects of a Business Plan
Some of the aspects that you need to be familiar with in your business plan include how the funding you're trying to secure is going to be spent on things related to the business like supplies, office space, personnel, marketing and promotion.
Beyond these things, a business financial consultant will use various CFO services to help you develop an idea for things like anticipated cash flow and escalating costs as they relate to the growth of the business. Having a plan to start a business is important, but having the foresight to predict how things are going to develop once the business is operational is equally important.
With the economic times being as trying as they are everyone is tightening their belts and banks are looking at who they give money to with more scrutiny than they had in the past.
Succeeding as an Owner
If you want to succeed as the owner of a brand new business then you have to make sure that every single aspect of your business related finances are in order before you go to the bank or any institution of lending with the expectation that you'll be given the money needed to get started.
A business financial consultant and the CFO services that he or she can provide are pretty much necessities for new business owners, but any business can benefit from working with such a person. After all, you've already got plans to start your business and it's a given that you'll want to stay in business.
If you're looking to hire the services of a business financial consultant in the MD/DC/VA area, than consider hiring Portal CFO for your business finance needs. Portal CFO can help you secure business funds and other forms of financing through the use of expert CFO Consulting.
A Good Business Financial Plan
A business plan is one of the most significant channels to ascertain if a business model of strategies would be effective or not. It is a thorough word diagram encircling all financial aspects of the company as well as predicting future possibilities for the business. It is where you should regress to disregard of whether things go wrong or right. The plan can be used as a comprehensive outline of financial affairs of one's company that should include information such as cash inflow, start up costs, operational costs and other relevant details of the business.
There are few options available when it comes to business financial planning. If you are having a small business operated at home then your personal savings should be sufficient for you to begin your business. Just take note that some funds should be reserved in your account in case there is emergency use. If you are lack of capital you may approach your family or friends to seek financial help from them but remember to think twice as you would be risking their money. It is alright if you are certainly sure that your business will pull a winning return but if you are not then stay off from borrowing from your immediate ones as good relationships could be destroyed due to monetary problems.
Another option would be getting financial loan from banks or credit unions. This will involve meeting the bank authority where you propose your business plan and convince them that your business is going to make a return and no doubt you will be able to repay the loan. Or you could look for investors or sponsors to aid your business financially. This may be difficult and you might need an irresistible business venture to lure people to invest in your business.
The business financial planning document is the most important record to start off a new business endeavor or to finance the growth of an existing company. There are many other business documents and they are all very important in the business. But certainly a business' affair will narrow down to attracting customers to keep your sales going.
Dennis enjoys writing on wide range of topics such as business financial planning and affordable investment advice. You may visit for more details.
Read latest us stock market news on www.caesarsfinancial.com.
Which Financial Books Are In Your Personal Business Library
If you are a stock broker, work as a financial planner, analyst, banker or securities regulator, then you must have knowledge of the market and know a little bit of the history. The other day a young man was studying to take his securities license at Starbucks and was very interested in getting started as soon as he passed the test, which I am sure he will ace, he knew his stuff down cold.
Nevertheless, there is a big difference in studying for government tests for securities licenses and understanding the inner workings of Wall Street and how the industry actually operates, so I ran home and grabbed some old books off my personal business library to give to the young man, as he said he would be there for a few hours.
Sure enough when I got back he was still there studying away with the same intensity and dedication and so, I gave him a few books. Perhaps these books are of interest to you if you are getting into the securities industry or looking for work as a financial planner, the first book is:
"The Wall Street Gurus - How You Can Profit from Investment Newsletters" by Peter Brimelow - 1986.
How do you pick the best financial advice newsletters? The Author discusses actual newsletters of 2-decades ago, things have changed a bit of course, with the Internet, day trading websites and all the online information now available. So, how do you pick a winning Financial Guru and how do you pick the best newsletters, Blogs, or Ezines for hot stock picks, bonds, commodities or mutual funds.
Knowing where to get information and what information is worthy is very important. Another book of interest was one about what happens when Wall Street Warriors Unite - what's it all about? So I recommend this book to you:
"Takeover - the new Wall Street Warriors - the men, the money, the impact" by Moira Johnston - 1986.
From the Oil Industry to the Airline Industry, no major industry was spared from hostile takeovers, leveraged buyouts and the 1980's craze of mergers and acquisitions. Perhaps you recall the headlines of the day with names like T. Boone Pickens and Carl Icahn, and all the men and money behind them and others as they raided companies, bought and sold assets and made billion dollar deals during lunch.
Think of all the arbitragers, brokers, investment bankers, lawyers, proxy fighters and government regulators all running around working their PR teams to woo Wall Street and fight it out, in a no holds bar game. This book is full of intrigue, dark secrets and battles that are still talked about today at the largest business schools. Next I think you need to know a little bit so you have some understanding of Bond and Money Market Investments, so go check out this book:
"The Dow Jones-Irwin Guide to Bond and Money Market Investments" by Marcia Stigum and Frank J. Fabozzi - 1987.
This book from its front flap cover tells us that it can answer questions that investors wish to know about bond and money market investments such as:
What are these instruments?
How do they measure up in terms of risk, liquidity and return?
How are they bought and sold?
How can they be used in a program for personal investing?
What are long-term and short-term debt securities?
The book goes through risks, returns, liquidity and investment characteristics of debt securities. There are chapters on Certificates of Deposit, Treasury Bills, Commercial Papers, Money Market Funds, Notes and Bonds, Tax Issues with Bond Trading, Federal Government Securities, Municipal Securities, Corporate Bonds, Convertible Bonds, Mortgage Pass Through Securities and strategies when swapping and trading.
After you get through with these books, well drop me a note and I will give you three more to read. You can never stop learning in the financial industry, and the past is almost as important as the future. There are things you need to know, beyond the license.
Which Financial Books Are In Your Personal Business Library
If you are a stock broker, work as a financial planner, analyst, banker or securities regulator, then you must have knowledge of the market and know a little bit of the history. The other day a young man was studying to take his securities license at Starbucks and was very interested in getting started as soon as he passed the test, which I am sure he will ace, he knew his stuff down cold.
Nevertheless, there is a big difference in studying for government tests for securities licenses and understanding the inner workings of Wall Street and how the industry actually operates, so I ran home and grabbed some old books off my personal business library to give to the young man, as he said he would be there for a few hours.
Sure enough when I got back he was still there studying away with the same intensity and dedication and so, I gave him a few books. Perhaps these books are of interest to you if you are getting into the securities industry or looking for work as a financial planner, the first book is:
"The Wall Street Gurus - How You Can Profit from Investment Newsletters" by Peter Brimelow - 1986.
How do you pick the best financial advice newsletters? The Author discusses actual newsletters of 2-decades ago, things have changed a bit of course, with the Internet, day trading websites and all the online information now available. So, how do you pick a winning Financial Guru and how do you pick the best newsletters, Blogs, or Ezines for hot stock picks, bonds, commodities or mutual funds.
Knowing where to get information and what information is worthy is very important. Another book of interest was one about what happens when Wall Street Warriors Unite - what's it all about? So I recommend this book to you:
"Takeover - the new Wall Street Warriors - the men, the money, the impact" by Moira Johnston - 1986.
From the Oil Industry to the Airline Industry, no major industry was spared from hostile takeovers, leveraged buyouts and the 1980's craze of mergers and acquisitions. Perhaps you recall the headlines of the day with names like T. Boone Pickens and Carl Icahn, and all the men and money behind them and others as they raided companies, bought and sold assets and made billion dollar deals during lunch.
Think of all the arbitragers, brokers, investment bankers, lawyers, proxy fighters and government regulators all running around working their PR teams to woo Wall Street and fight it out, in a no holds bar game. This book is full of intrigue, dark secrets and battles that are still talked about today at the largest business schools. Next I think you need to know a little bit so you have some understanding of Bond and Money Market Investments, so go check out this book:
"The Dow Jones-Irwin Guide to Bond and Money Market Investments" by Marcia Stigum and Frank J. Fabozzi - 1987.
This book from its front flap cover tells us that it can answer questions that investors wish to know about bond and money market investments such as:
What are these instruments?
How do they measure up in terms of risk, liquidity and return?
How are they bought and sold?
How can they be used in a program for personal investing?
What are long-term and short-term debt securities?
The book goes through risks, returns, liquidity and investment characteristics of debt securities. There are chapters on Certificates of Deposit, Treasury Bills, Commercial Papers, Money Market Funds, Notes and Bonds, Tax Issues with Bond Trading, Federal Government Securities, Municipal Securities, Corporate Bonds, Convertible Bonds, Mortgage Pass Through Securities and strategies when swapping and trading.
After you get through with these books, well drop me a note and I will give you three more to read. You can never stop learning in the financial industry, and the past is almost as important as the future. There are things you need to know, beyond the license.
Personal and Financial Success "Secrets" - Surround Yourself With People Who Can Help You Succeed!
Are you struggling in your personal or financial life? Are you struggling to build your business? Do you need help but don't know where to turn for help? Do you have someone that is holding you accountable for your daily or weekly action steps needed to accomplish your goals?
Ask anyone that is successful who helped them to become successful. Successful people will have one or more people in their lives that have helped them with their thinking, motivation, goal setting, daily or weekly steps to success, business building training or mentoring, marketing, and every other area of their lives that needed improvement.
Professional athletes even have coaching and training and mentoring so they can be the best they can be in their sport. Actors have coaching and training to help them become the best actor they can be so they will be successful at their next audition. Singers have coaches and managers as part of their mastermind group that help them get where they want to be in their singing career. Not one professional person did it on their own. They all had someone in their lives that helped them get where they wanted to be in life.
So, who is in your life to help you get where you want to be personally, financially, spiritually, emotionally, or physically? Think about who has been there for you to help you. There are many people that are here to help you succeed in every area of your life.
There are personal growth and self improvement coaches and mentors like Tom Danley, Brian Tracey, Andy Andrews, and Jeffery and Erica Combs that teach you how to improve your thinking, inspire, motivate, create goals and create plans for achieving your greatest goals.
There are financial growth and investing coaches and mentors like Robert Kiyosaki, Donald Trump, and David Bach that show you how to get out of debt and invest for your personal and financial future.
There are many exercise and diet coaches, mentors and trainers that are there to help you get in shape emotionally, physically, mentally and personally.
Are you in a business with successful people that you can use as a mentor to help you build your business? People who are successful business builders have mentors and coaches and support to help them succeed and so should you.
Take the time to find a coach or mentor for every area of your life and your life will become much better! Learn and apply the knowledge to your life and you will succeed! As you improve yourself you will improve every are of your life!
If you continue to do what you are doing right now, you will continue to have the same results you have had up until now. One definition of insanity is to continue doing what you are doing while expecting to see different results.
This article on personal and financial success "secrets" will get you started on the road to success in every area of your life. You can read other articles on personal and financial success "secrets". Apply what you learn in these articles and you will become successful! To learn more about people who are here to help you improve your life, and even become part of your mastermind group, go meet Jeffery Combs and his wife Erica Combs and they will share with you information on their free Tuesday night conference calls that will help improve any area of your life. Listen in on their conference calls and apply what you learn from these self made millionaires and you will become successful in every area of your life!
Business Financial Success Comes With Proper Planning
Unless you happen to be planning to establish a charitable, non-profit organization of some type, the main reason why you may be interested in starting a business is to make a living or build wealth from the endeavor. For many people, the desire to "be your own boss" and escape from the shackles of traditional employment is part of the motivation, but the bottom line usually comes down to wanting some form of business financial success so that you are not living from paycheck to paycheck.
One of the most important things that you will do in your quest to enjoy business related financial success is to have a clear, detailed, and realistic business plan that will lay out a map for your progress in your new business. A well-done business plan will include financial projections, working capital management objectives, cash flows analysis, industry and competition analysis, a profile to target customers or a specific audience, and an outline of organizational and asset management ideas.
One of the common errors that a lot of new business people make, which contributes greatly to the high failure rate of new businesses, is not having a clear and complete picture of the marketplace in which they plan to compete. Spending some advance time in analyzing the industry and collecting enough pertinent information will give the entrepreneur a much better idea of what is needed in order to forge business financial success in a given field.
In most cases, when someone is looking to start a new business, they will need some type of start up, working capital to see them through until the business starts to make enough money to be self-sustaining, as well as to be able to pay out salaries. Because a new business has no track record of any kind and no net assets or financial statements to submit for a loan, the only business financial information that the lenders will be able to evaluate is the entrepreneur's personal credit and total assets.
Even if you have excellent credit and current assets that you can borrow against in order to take out a loan to get your business started, a loan officer will still require a detailed business plan from you. Without a thorough business plan, your aspirations are nothing more than wishful thinking and your loan application won't get very far in the process.
The lenders will want you to prove to them that you have a knowledgeable understanding of the industry you wish to enter, as well as sufficient management knowledge to be able to successfully take your business from inception, through the growth phases and into stability.
When an entrepreneur is heavily engaged in establishing and growing their own business, there is no doubt that it becomes a very personal endeavor. But often this perspective is just "too close" to be able to make important decisions that can lead to business financial success. However, when someone has taken the time to research and map out a clear and detailed business plan, this can help to overcome the challenges.
Business Financial Planning - A Helping Hand
If you're a small business owner, then you already know that just about everything you've been taught about your business financial planning is a bunch of garbage. Yes, I called it garbage because it's not designed to help you build wealth...
So here's the truth...
Nearly everything being taught about business financial planning in the marketplace, on TV, and in print is designed for one purpose - to separate you from your money and to get it into their company's control.
Because you own a small business you already understand how to make money, but if you're like so many others - you're not exactly sure what you should be doing in terms of investing for the future, getting a reliable return on your money, or how to structure your overall financial plan in a way that optimizes your cash flow.
So what should you do?
Who should you trust?
Those are both important questions, and I'm going to help you with how to find the answer... but I'm going to warn you in advance that it means that you're going to have to think for yourself.
The first rule of business financial planning is that no one cares about your money or success as much as you do. Period. It's just the same as acknowledging that no one else cares about the success of your business as much as you do.
It's not that they are bad people or bad advisers, it's just that they care more about their own bottom line than they do yours... it's human nature.
That means that you're going to have to be accountable for your own money and you can't just turn it over to a so called "Financial Expert" and trust that they are going to take as good a care of your money as you do... It just doesn't work that way and if you need proof, look at the American public.
The majority of them have put money away in investments and followed the mainstream advice about how to grow wealth, but reality is showing that this hasn't worked for most people and the majority of them are relying on dwindling savings & social security to help them scrape by...
This is what happens to most people when they don't take responsibility of their own success - and it doesn't have to happen to you...
So, now that we've established that you can't delegate growing your wealth, the next question you need to answer is this...
Does it make more sense to invest your time, money, and resources into something that you understand really well, or something that you don't really understand? If you agree that investing in things you understand makes more sense then look at what you've done up to this point...
Do you know where your money is invested?
Do you understand how those investments work?
If not, it may be time to reconsider where you're putting all of your resources.
The next question is similar... Does it make more sense to invest in things where you have control of your money, or to invest in things that are out of your control?
That means "Can you effect the outcome of your investments?" or "If things started to go wrong, could you do anything about it?" or "In the case of an emergency, do you have access to your own money?"
If you agree that no one will take as good a care of your personal finances as you will, then it's clear that investing those hard earned dollars into things where you have control also makes sense.
These are just few considerations when learning business personal finances, but where do you go from here?
The next step is for you to invest in yourself and your understanding of how to build and manage your finances in the same way that you've invested in learning how to make your business successful.
Begin thinking for yourself, take the time to learn the skills involved in how to manage and invest your money properly, and you'll begin to see the world of personal finances for you as a small business owner change for the better.
Get a free copy of a breakthrough financial secrets video to learn more about how to structure, protect, and grow your financial assets and cash flow.
Derick Van Ness coaches 100's of small business owners on how to improve your bottom line and keep more of the money you make through powerful tools & education and by following your strengths and passions for marketplace domination!
Cheap Personal Business Finance - Know It Clearly
Running a business without fund is just impossible. Finance is the main criterion for running a business. If you are a businessman and want to finance your business, you can apply for cheap personal business finance.
Cheap personal business finance is available for all types of businesses; both new and old. With it you can fulfill various purposes such as,
o You can start a new business
o You can expand your present business
o You can buy some necessary equipments for your business
o You can buy new office for your business
o You can use cheap personal business finance as business capital too
Cheap personal business finance is available both in secured and unsecured forms. The secured option comes with the requirement of a security. As a security, borrowers can use both commercial as well as personal properties. On the other hand, the unsecured option does not claim anything against the lending amount. This option is apt for those borrowers who do not have any security and who do not want to use their property for the sake of loan only.
However, if you apply for cheap personal business finance through the secured way, you can avail the amount ranging from £3000- £75000 for 3-25 years. In case of using a high valuable security, borrowers can avail up to £100,000 as cheap personal business finance. On the other hand, unsecured option allows borrowers to borrow anything in between £1000-£25000 for 3-10 years.
Availability of cheap personal business finance is not a big deal nowadays. Various banks, financial institutions, lending companies offer cheap personal business finance. But if you want to avail the amount through a quick and hassle free way, online option is the best alternative. With this option, you can get a better deal only by clicking the mouse and within a least period of time.
Ben Gannon is a senior financial analyst at Cheap Finance UK with an acumen for business and loans. In recent years he has taken up to provide independant financial advice through his informative articles. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find Finance UK, cheap used car loans,cheap personal business finance
Cheap personal business finance is available for all types of businesses; both new and old. With it you can fulfill various purposes such as,
o You can start a new business
o You can expand your present business
o You can buy some necessary equipments for your business
o You can buy new office for your business
o You can use cheap personal business finance as business capital too
Cheap personal business finance is available both in secured and unsecured forms. The secured option comes with the requirement of a security. As a security, borrowers can use both commercial as well as personal properties. On the other hand, the unsecured option does not claim anything against the lending amount. This option is apt for those borrowers who do not have any security and who do not want to use their property for the sake of loan only.
However, if you apply for cheap personal business finance through the secured way, you can avail the amount ranging from £3000- £75000 for 3-25 years. In case of using a high valuable security, borrowers can avail up to £100,000 as cheap personal business finance. On the other hand, unsecured option allows borrowers to borrow anything in between £1000-£25000 for 3-10 years.
Availability of cheap personal business finance is not a big deal nowadays. Various banks, financial institutions, lending companies offer cheap personal business finance. But if you want to avail the amount through a quick and hassle free way, online option is the best alternative. With this option, you can get a better deal only by clicking the mouse and within a least period of time.
Ben Gannon is a senior financial analyst at Cheap Finance UK with an acumen for business and loans. In recent years he has taken up to provide independant financial advice through his informative articles. His articles are widely read because of the lucid manner of wriiting and thoroughly researched datas. To find Finance UK, cheap used car loans,cheap personal business finance
Entrepreneurs Find Personal Loans Can Help Finance Business Startup Expenses
Being short-term loans that assist your immediate cash needs, personal loans can help finance business startup expenses. Typically personal loans are a single payout loan with a high rate of interest. The borrower usually returns the loan with interest in one go rather than paying monthly installment. In general, personal loans are not recommended due to their high interest rates. A borrower may find it difficult to repay the whole debt in a single shot, however, with business startup's the case is indeed different! Let us see how different finance options can save the day for business startup's.
Typical Business Start-up Expenses
Once you have decided to start a business you will most likely have a solid business plan that will detail your initial financial requirements. Typical business start-up expenses can be broadly divided into overheads and variable expenses. One thing that remains constant with almost every new business, is that you need some money to purchase inventory, lease a building, start an advertising program and work towards your first sale. Personal loans are extremely useful in financing those overhead expenses that usually occur at the beginning as a one-time cost. Variable expenses are those that continuously occur in the process of conducting a business and are generally tied to sales projections.
For instance, in case of a software business start-up, the administrative costs, licensing costs, initial infrastructure setup cost would constitute overhead costs. On the other hand client visits, traveling for demonstrations etc. would constitute variable costs that will keep occurring every time there's a potential client and may not be predictable. Also, irrespective of sales, overhead costs will still remain to keep your setup active!
Before you borrow any money, it is vital to have a repayment plan as well as projected business plan, to understand how your cash flow will operate. Once you segregate your expenditure into fixed overhead costs and variable expenses, you need to sort out the expenses that will be one-time events. A business loan or credit line can help with these one-time costs provided your business is able to afford it once projected sales begin to be realized! You need to anticipate all possible scenarios and ensure enough cash flow over the period of few months before you take a personal loan.
Types of Personal Loans
The beauty of this financing, is that it often can be obtained with or without security collateral. A secured personal loan involves borrowing against an asset such as your property. If you default on your repayment, the lender can claim your asset! On the other hand, unsecured financing, does not need collateral, however, the lender generally protects his loan from possible default by charging you a high rate of interest. In the event of a default, the lender may resort to legal channels to recover the amount.
If you are confident of repayment, it is best to go for a secured personal loan wherein you can negotiate a low annual percentage rate (APR) while pledging your property or car or any other asset.
If your business startup requires funding that cannot be met by a single personal loan, you may even borrow more than one loan. The more you expose yourself to the debt scenario, the more financial risk you're exposing yourself and your business to. It is important to conduct thorough research and prepare for contingencies. It is always best to dig into your own savings or borrow from close relatives if they're willing and able however, for those that need instant cash and a huge amount at that, a personal loan could be a lifesaver. In fact, if you successfully repay your personal loan within the stipulated time, you could even get a good credit score which in turn will be better for the future of your business!
You can utilize these resources to research more information on online loan lenders or current unsecured personal loan options to help explore your financing options.
Typical Business Start-up Expenses
Once you have decided to start a business you will most likely have a solid business plan that will detail your initial financial requirements. Typical business start-up expenses can be broadly divided into overheads and variable expenses. One thing that remains constant with almost every new business, is that you need some money to purchase inventory, lease a building, start an advertising program and work towards your first sale. Personal loans are extremely useful in financing those overhead expenses that usually occur at the beginning as a one-time cost. Variable expenses are those that continuously occur in the process of conducting a business and are generally tied to sales projections.
For instance, in case of a software business start-up, the administrative costs, licensing costs, initial infrastructure setup cost would constitute overhead costs. On the other hand client visits, traveling for demonstrations etc. would constitute variable costs that will keep occurring every time there's a potential client and may not be predictable. Also, irrespective of sales, overhead costs will still remain to keep your setup active!
Before you borrow any money, it is vital to have a repayment plan as well as projected business plan, to understand how your cash flow will operate. Once you segregate your expenditure into fixed overhead costs and variable expenses, you need to sort out the expenses that will be one-time events. A business loan or credit line can help with these one-time costs provided your business is able to afford it once projected sales begin to be realized! You need to anticipate all possible scenarios and ensure enough cash flow over the period of few months before you take a personal loan.
Types of Personal Loans
The beauty of this financing, is that it often can be obtained with or without security collateral. A secured personal loan involves borrowing against an asset such as your property. If you default on your repayment, the lender can claim your asset! On the other hand, unsecured financing, does not need collateral, however, the lender generally protects his loan from possible default by charging you a high rate of interest. In the event of a default, the lender may resort to legal channels to recover the amount.
If you are confident of repayment, it is best to go for a secured personal loan wherein you can negotiate a low annual percentage rate (APR) while pledging your property or car or any other asset.
If your business startup requires funding that cannot be met by a single personal loan, you may even borrow more than one loan. The more you expose yourself to the debt scenario, the more financial risk you're exposing yourself and your business to. It is important to conduct thorough research and prepare for contingencies. It is always best to dig into your own savings or borrow from close relatives if they're willing and able however, for those that need instant cash and a huge amount at that, a personal loan could be a lifesaver. In fact, if you successfully repay your personal loan within the stipulated time, you could even get a good credit score which in turn will be better for the future of your business!
You can utilize these resources to research more information on online loan lenders or current unsecured personal loan options to help explore your financing options.
The Business Financial Information You Need For Funding
Most small business owners are quite eager to find avenues to help their enterprise grow into a thriving business. One key approach to help propel businesses forward is securing additional working capital, in order to get the business to the next level.
Usually, this means that the entrepreneur needs to go to a lending institution to get a small business loan. When meeting with a loan officer for this purpose, detailed business financial information will be required.
The most pertinent financial information that you will need to collect in preparation for applying for a small business loan are the basic financial reports that virtually all businesses of any size generate on a monthly or quarterly basis. These financial statements provide potential lenders with a profile of the financial situation of the business. They are also invaluable in providing the business owner with the management knowledge they need to strategically improve their ongoing business plan.
The most basic form of business financial information consists of a collection of financial statements and reports, which are prepared according to strict, standardized accounting principles. Since accounting practices and principles have long been standardized and accepted worldwide, virtually anyone with even a basic understanding can quickly understand the financial picture of a company that is painted by these basic reports.
The main reports that are generally part of a company's financial information are the following: the balance sheet, the cash flows statement, the profit and loss report, and the overall financial statements, which include highlights and summarize each of the other reports. While the financial statement provides a review, the individual reports go into specific detail for the period of time that the report covers. Many times, when monthly reports are generated there are also quarterly and yearly reports generated that help to provide insights into the overall, financial trend of the business.
The purpose of the balance sheet is to provide the details of all of the current assets of the business, all of the liabilities that the business is obligated to pay, and the resulting business equity. In order for this financial information to be most useful, it should separate the current assets and current liabilities from the listing of the long-term assets and the long-term liabilities.
The profit and loss part of financial information is the report that most commonly covers longer periods of time, usually per business quarter or year. These profit and loss statements often include comparison charts for the previous time period going back long enough to help to identify the important trends.
Without this comparison, it might be easy to assume a business is doing well simply because it is profitable, yet overlook the fact that it is less profitable than the previous year. These trends will be very important to the lenders as it gives them insights about the success of working capital management overall.
When preparing a statement of cash flows, it can be compiled by either using the indirect or the direct method. Generally, this kind of business financial information is better with more detail because the fuller the detail, the clearer the view of the business's financial situation. Most loan officers agree that for the purposes of obtaining financing, the more detailed the information the better because it shows that the business has nothing to hide.
Business Financial Success Comes With Proper Planning
Unless you happen to be planning to establish a charitable, non-profit organization of some type, the main reason why you may be interested in starting a business is to make a living or build wealth from the endeavor. For many people, the desire to "be your own boss" and escape from the shackles of traditional employment is part of the motivation, but the bottom line usually comes down to wanting some form of business financial success so that you are not living from paycheck to paycheck.
One of the most important things that you will do in your quest to enjoy business related financial success is to have a clear, detailed, and realistic business plan that will lay out a map for your progress in your new business. A well-done business plan will include financial projections, working capital management objectives, cash flows analysis, industry and competition analysis, a profile to target customers or a specific audience, and an outline of organizational and asset management ideas.
One of the common errors that a lot of new business people make, which contributes greatly to the high failure rate of new businesses, is not having a clear and complete picture of the marketplace in which they plan to compete. Spending some advance time in analyzing the industry and collecting enough pertinent information will give the entrepreneur a much better idea of what is needed in order to forge business financial success in a given field.
In most cases, when someone is looking to start a new business, they will need some type of start up, working capital to see them through until the business starts to make enough money to be self-sustaining, as well as to be able to pay out salaries. Because a new business has no track record of any kind and no net assets or financial statements to submit for a loan, the only business financial information that the lenders will be able to evaluate is the entrepreneur's personal credit and total assets.
Even if you have excellent credit and current assets that you can borrow against in order to take out a loan to get your business started, a loan officer will still require a detailed business plan from you. Without a thorough business plan, your aspirations are nothing more than wishful thinking and your loan application won't get very far in the process.
The lenders will want you to prove to them that you have a knowledgeable understanding of the industry you wish to enter, as well as sufficient management knowledge to be able to successfully take your business from inception, through the growth phases and into stability.
When an entrepreneur is heavily engaged in establishing and growing their own business, there is no doubt that it becomes a very personal endeavor. But often this perspective is just "too close" to be able to make important decisions that can lead to business financial success. However, when someone has taken the time to research and map out a clear and detailed business plan, this can help to overcome the challenges.
Managing Business Expenditures and Avoiding Unauthorized Expenditures
Effectively managing the financial health of a business is one of the most important tasks for a small business owner/manager. All activities of the business affect, for good or bad, the financial health of the business and the financial management of that business affects all other business activities. Without adequate financial resources - you are OUT OF BUSINESS!
In addition, responsible and disciplined financial management can protect the small business or LLC from attacks as well as attacks against the personal assets of the owners by outside interests, shareholders, and others with an economic interest. One of the best defenses against attacks on the business is to have a proper business structure, including a strong financial position.
Responsible and disciplined financial management requires a good working knowledge of financial statements, especially the cash flow statement, as well as the cash cycle of the individual business. While many small business owners are never going to become experts in this discipline, all should gain a good knowledge of the company finances and then in cooperation with a good CPA effective financial management is relatively straightforward.
All financial management begins with a carefully prepared, well supported, operating budget. In the case of a start-up business a start-up budget will precede the operating budget but both are required. Thereafter, a management control system must be instituted to oversee the financial activities of the business and see that the budget is followed.
One of the issues business owners experience, and one that can lead to claims that can pierce the corporate veil, is that of unauthorized expenditures. What this means is expenditures that are unnecessary for, and outside of the, normal business operations. This issue is closely related to co-mingling of funds but extends beyond that issue.
The issue of unauthorized expenditures can be an challenge for businesses of all sizes but can pose a particular problem for small businesses and LLC's that have only one owner or very few owners and no employees. In the case of a single member business, where is the oversight and control to come from? First and foremost the protection must come from the owner(s) having a high level of commitment and discipline to the proper financial management of the business. Thereafter, working closely with a good CPA can assist in providing additional and valuable oversight.
The question the single owner business must ask is "Do I really want to expose all of my personal assets to risk because of lack of business discipline"?
If there is more than one owner and employees are involved, all, especially the owners, have a responsibility to see that the small business or LLC is being managed in a manner to ensure success and protect against unnecessary liability.
Is The Property Management Business For You? Mini Guide For Real Estate Investors - Part 1
This mini guide for real estate investors is written to help entrepreneurs like you with the mystery of property management career. The investment risks are higher when decisions are made without enough information. By now you know that you want to invest profitably in real estate or already started the process. All the motivation is coming from your desire for financial independence. I know that, because I am with you right on the very same goal.
Assume you have just purchased your investment property. It does not matter whether it is a 10--unit apartment building, a small office building or a single--family home. It is an attractive rental property and you are asking a fair market value rent.
You should have no problem attracting tenants and maintaining a high level of occupancy. What happens with the tenants once they move in is going to depend on you.
The problems with property management are not caused by the business itself, as much as by a lack of education. The property management is the most misunderstood parts of real estate investing. If you do not have good property management, then you will have high management costs, bad tenant relationships, high vacancies and that will be the end of your business.
You would consider these ideas in making your managing investment decision; I did it when I started:
- The money you save, by doing property management, may mean the difference between a positive or a negative cash flow for your rental business.
- Managing your own properties, at least in the beginning and learning the management business is something to consider. After you become familiar with the manager responsibilities and acquire more properties, you will be able to do a better job of managing professional managers.
- More management and investment resources are available at my website.
How I start my property management? I went to school to gain my knowledge before facing the real life competition. I start my property management from the bottom up. My previous experience with real estate renting was being a good tenant for about five years in two different places.
Eight years ago I passed the real estate agent state examination and I worked for two brokers and managed properties on the side to build experience. I got my associate broker license in real estate about four years ago.
We resettled in the U. S. A. coming from communist collapsing East Europe, in 1990. Our assets at that time were intangible, mechanical engineering education and big hopes.
We did not have this game of "getting rich with properties" in the socialist economies. Actually, it was forbidden to even think about owning properties. It took me five years to comprehend there is a less risky way of investing by using real estate properties and rentals.
For $50 and about one hour conversation with our previous property manager -- a very nice lady -- I was in business. The management forms I received helped me to build my forms and gave me enough confidence before the closing on my first apartment building. I was on my way, investing in real estate and managing my own properties for profit. This is how I started my property management career. Now, I appreciate a property management career or a job in property management a lot more.
I am not preaching here to manage your rentals yourself forever. For us, property management is part of getting the necessary life experience to succeed in this new country.
Dealing with people and their needs gets messy if you do not use a system. Qualifying the potential applicant over the telephone saves time and money. Renting real estate is the toughest part of the property management job. Here is how my qualifying filter system is working:
The local newspaper classified ads bring most of my renting real estate applicants. I call them Potential Applicants (PA) before submitting the rental application. I give to potential applicants enough info in the newspaper, so they may drive by and talk with our tenants. The prospect applicant should come ready, wanting to rent the apartments from us, because we take good care of the tenants and the apartments.
This is what I want with my ads.
"My town, clean 1 bedroom apt. $500 plus deposit, utilities included, A/C, coin laundry available, 123 Main Street, (222) 333-4444"
They have the address for the location, that the utilities are free and my cell phone number. Here are examples of first conversations over the phone with the potential applicants (PA).
PA: Hello, is the apartment available? Me: Yes, when you want to move in? My name is Ernest. PA: Thanks, my name is Mary. It is for my son John; He is planning to move soon. Me: Sorry, is it a strong reason way your son can't call himself?
(My experience tells me I may stop here and deal with the real party later, the relatives or friends have a different agenda sometime. In reality, I continue giving information about renting.)
The son is calling me later.
PA: Where is this apartment located?
Me: At the corner of Main and Grand, next to the gas station, across the Seven Eleven. Look for apartment no.30. You can drive by and get from "Take One" box, an application with info printed the other side. PA: Do you accept pets?
Me: What do you have in mind as pet? (Reptiles, rodents, dangerous dogs, etc are not on my list, I ask because the applicant will talk and I can mind his/her personality).
PA: It was my aunt' cat and she is 10 years old, etc. Me: Yes, we accept a qualified cat with a "Pet agreement". The no refundable fee is $175. Do you have some pay stubs from your job? That will help us to check your employment; or
PA: No, I receive social security checks, I am on disability.
(To assume when renting real estate that all tenants on assistance or seniors will be bad is wrong. Some may get a co-signer.)
Me: Sorry we only take applications if the total monthly documented net income is 3 times the rent. The no refundable application fee is only $20 and we do a credit report request and pay a different company for that service. (Some applicants just gives up after this phrase.); or
PA: Yes I work two jobs: manager at Mac Donald and telephone marketing at night. My girlfriend is working as telephone marketer. Together we make $1400 a month.
(This is a border line situation, they may pay for a few months and something is happening and girl/boy friend is gone. He/she no longer qualifies by income requirements. In this cases if the vacancy is hurting me and I cannot wait for a better applicant, I might take them, but the lease will have a clause: "If he or she intends to leave any time, they both must leave at the same time"); or:
PA: Yes, I work part-time at "Printing Nice" and I am full-time student. It is my fist time out of home; my mom may co-sign the lease.
Me: OK, bring your mom when you want to see the apartment.
PA: We want to see it, Saturday morning at 12 noon, it is our time to look for apartments.(PA may put some pressure on you)
Me: OK, see you then, at apartment no.30 second floor, a sign "For Rent" is in the window/door.
The potential applicant interview is very important. You have to see face to face the potential applicant and their pet. Watch their car how clean is outside and inside and get an idea about how much that person care about personal staff.
My "good tenant" definition is: A good tenant is paying always on time, takes care of apartment, is friendly and comprehends "quiet enjoyment" words.
It is better for me to wait for the right applicant and do not rush to make a buck. Also, I discovered that the service to society, the humanity we share is coming after you take care of our business. Otherwise you will not be in this business for very long time.
My next article -- part 2 will be about "Evaluating the renting applications"
Managing The Financial Affairs Of Your Small Business - Part 3
As we continue to investigate exactly how we can manage the financial affairs of our business more effectively, you should start seeing more and more ways to become profitable. There is an old saying in business that states, "businesses don't fail, people do". No statement has ever been truer. Let's examine more ways that will make us profitable.
One of the most important things you can do in your business is to price your products and services in order to make a profit. What happens to people is that in the early stages of their business, they are so desperate to attract new customers and gain new business, that they are willing to set prices way too low. In addition, they are not confident enough to feel that higher prices are worthy of them. This is something that you must master it as quickly as possible because no business can operate at a profit margin that is too low. Another thing you must realize is that it is much harder to raise prices later after you start establishing a customer base.
Another thing that many business owners fail to realize is that their time is the most valuable asset they have. As a result, they tend to undervalue the price of their time. In fact, many of them do not even factor in the time spent into the price of a project. In regards to your time, you also have to learn to spend your time on activities that provide your business the most leverage. Most of the other things can either be delegated or temporarily set aside.
Should your business ever get to the point where you will need additional financing, then you need to ensure that you are financing and asset and not simply debt. Nothing is as crippling to the growth of a young company as applying finance charges to existing debt. In spite of this, thousands of businesses every year continue this practice. And as a result, most of them go bankrupt.
Developing Your Property Management Business Plan - How to Start a Property Management Company
The recent real estate "crisis" has caused a number of beneficial effects on the property management industry. There has never been a better time to consider starting a property management business than right now.
1. Houses are not selling, therefore homeowners that need to move and/or investors are forced to rent their units out; thus increasing the rental property supply chain.
2. Houses are foreclosing by homeowners and being bought by investors that in turn rent the property out. This increases the amount of supply as well.
3. The homeowners that were foreclosed upon will now be renters. Thus increasing the rental pool and increasing demand.
The above items create a perfect storm for the Property Management Business Industry. The purpose of my article is to present and discuss the 6 categories that are paramount in developing your property management business plan:
1. Executive Summary
2. General Company Description
3. Description of Services
4. Marketing Plan
5. Operational Plan
6. Budget
1. Executive Summary - Include everything that you would cover in a five-minute interview. Who are the owners, what is their experience in this industry? Explain the fundamentals of your business. What do you think the future holds for your business and your industry? Make it enthusiastic, professional, complete, and concise.
2. General Company Description - This includes your mission, vision and company commitments, Who is your target market (higher/lower end residential, multi-family, commercial), what price range of properties will you target, what area(s) will you target, who are the prospective tenants and what's the future of your industry? Form of ownership, what factors will make the company succeed? What strengths do you personally bring to the business? Long term: What are your plans for the future of your business? Growth? If so, at what rate and how will you achieve it?
3. Description of Services - Describe in depth your property management service structure. What will you perform on a monthly basis for your property owners? What will be your monthly fee structure? What additional services will you offer such as evictions, project management, maintenance and what will your fee structure and profit center look like?
Much of your service offering will be developed by performing a complete competitive analysis. Your offering needs to be correctly place in the marketplace to make yourself unique. You should know your competitions monthly fee structure, how many properties they manage, number of managers, etc.
4. Marketing Plan - Bottom line: Your plan for how to attract clients. How will you get your company and offer in front of your prospective property owners. How will you utilize the following: (website, SEO (search engine optimization) plan, online marketing, signs, advertisements, associations, relationships, networking, direct mail campaigns, signs, yellow pages, calling for rent by owners, etc.)
By the way, there are methods that are much more effective than others for a start up real estate management company. Be sure to do your proper research before you unnecessarily spend money.
5. Operational Plan - Explain the daily operation of your business; (its location, equipment, people, processes, and surrounding environment.) If you are starting out opening your own prop mgt business, you will want to spend the majority of your free time in marketing techniques.
6. Budget and Financials - Includes your start up expenses, capital expenses and expected monthly recurring expenses. If you are starting out a your business with 0 properties as I did, you will want to start with a minimal budget in mind. Keep your costs as low as possible. What is your expected income based on your predicted growth rate?
Conclusion: Properly developing your property management business plan is the key to your success. Starting a property management business can be very rewarding, however not having the right direction and foresight from the beginning can blind you and your business. Remember; "Failing to properly plan is properly planning to fail."
A Good Business Financial Plan is Your Secret Weapon
Basically it's a document that contains the financial particulars of a company & generally includes the following sections:
- A balance sheet
- A cash flow statement
- An income statement
Your company financial plan is one of the most effective instruments for ascertaining whether a business model is workable. It's 'the plan' encompassing all the present financial issues as well as future predictions for the business. It's what you revert to when things go wrong and when thing go right.
It can be used
AN EFFECTIVE FINANCIAL OUTLINE SHOULD INCLUDE THE FOLLOWING DETAILS...
- Start up costs
- Operational costs
- Cash inflow
- Other relevant information
WHEN IT COMES TO FINANCING A BUSINESS, THERE ARE OPTIONS...
Option #1 - For a small home operated business, you personal savings my be enough to start up a business. You may wish to think about keeping some funds in an emergency account, just in case.
Option #2 - If you're short of cash you could approach family members or close friends and ask them if they can help. But do, think it through thoroughly.
If you're not absolutely sure that the business is a winner, perhaps you're better off not borrowing from your near and dear ones. It's happened many times, good relationships destroyed over money.
Option #3 - You can turn to the banks or credit unions for finance.
Generally this involves a meeting with the bank manager where you can explain your business financial plan and try to convince him that your business idea is a clear winner and there's no doubt that you'll be able to repay the borrowings without a problem.
Option #4 - You may wish to look for investors to finance your business. Attracting backing from a third party will be difficult and to be successful you'll require a rock solid business plan and be able to 'sell' your dream in such a way that it's irresistible.
Being able to read & comprehend complex business documents is a valuable skill to have. We all know that, in business, the paperwork in the most boring part and we can usually discover something more interesting to do.
A detailed business financial plan is possibly THE MOST important document of the many that are required to kick-off a new business venture or to fund growth for an established company.
Understanding business documents is an extremely important issue when running a business but there are more important issues ahead not the least of which is attracting new customers.
How to Pick Small Business Financial Software - 3 Sure-Fire Ways to Pick What's Best For You
Small business financial software plays a vital role in the operations of an organization especially the small enterprises. This is where you get the opportunity to keep the record of all the financial activities that are occurring in your organization. It not only helps you to track the various events that have happened in the business but it also prevent you from any problems or nuances from the government officials that may include both stakeholders and non- stakeholders. The small business financial software assists you in managing, controlling and monitoring your business in an effective and efficient manner. The question that lies is how it is possible to select the software that is right for your small business?
What do you basically need for your Business?
There are numerous small business financial softwares in the market that have multiple features in them. On top of it, the seller's main aim would be to sell the software that has more features and is higher in price and profit. Purchasing such softwares mean you are creating a problem for yourself. Small business financial softwares loaded with added features are complex in nature and takes time to learn. The task in your business needs a software that can simplify and speed up the task in less time. As a result, implementing complex softwares for the task would create more problems than actually solving it. Therefore, it is incumbent on the buyer/small enterprise to determine in advance the nature of the task in order to buy the software accordingly.
Is there a standard solution provided by each financial software?
Huge and credible companies are offering softwares in hundreds and thousands of quantities around the world. They may include Microsoft, Quicken, Peachtree and various other companies. The small business financial softwares provided by these companies are established brands as their solution are recognized across the globe. In addition, these companies have experts and specialists who are ready to offer you their services should you confront any sort of problem in the software. Hence, it is wise to buy software that has credibility in the context of established company with the good after sales service.
Is Small Business Financial Software has upgrade option?
It has been discussed earlier that it is good to buy the simple software so that it is easier to learn the software in less time. However, it is also vital that the small business financial software that you have purchased should have the option of upgrading. This is because the world is changing at a rapid pace. The system incorporated in the business should be flexible enough to accommodate any vital change. Similarly, the software should have the flexibility option to get into other modes if any new task crop up. It gives an advantage to the business by not making huge changes in the software or purchasing entirely new one.
Thus, when buying small business financial software, the above factors need to be kept in mind in order to have the right product for your business.
Small Business Financial Software
Starting a new business takes a lot of effort. Part of that ongoing effort will be tracking the income and expenses generated by the small business. There are many small business financial software products capable of meeting your needs. Deciding on the best solution for your small business is the goal of this article.
It is important to determine the financial accounting needs of your small business when looking for software. Depending upon the type of business that you operate, the following functionality needs to be considered:
- Track Customers and Sales
- Invoice Customers
- Manage Inventory
- Process Credit Cards
- Create Budgets
- Perform Payroll Functions
- Business Tax Reporting
- Paying Bills
Most of your time will be spent entering data into your business accounting software solution. An important consideration is the bank that you do business with. Most provide data feeds, verify that their format can be uploaded into your financial accounting software. This can save you hours of effort.
With hard work and determination, your business will grow over time. Pick an accounting software solution that will grow with the business and meet your needs in the future. This can be accomplished by selecting a product with an upgrade path with more options or a product that you can add modules to later.
Their are accounting solutions that are available online using a web browser or by installing and using on a computer. If you will be out of the office for long periods of time, an online solution may be a better choice.
Depending upon the structure of your business, taxes can take lot of time on an ongoing basis. Does the software help generate tax forms that need to be filed on a monthly or quarterly basis. At the end of year tax time, can you create an extract that can be pulled into your tax software. Or if you use an accountant, does the software allow you to create an accountant copy for the accountant? Tax time is stressful enough, these features can be a great time saver.
As your business grows, it may be necessary to allow additional users to enter information or perform other tasks to bill clients etc. Does the software allow you to restrict the access for users? Some users may need access to all functions while others will only need limited functionality.
Talk to people in a similar business to find out what small business financial software they use to track their business. Ask them about the features that save time, what needs improvement and if any are missing. Most likely you will not find a software solution that is perfect, but you will be able determine the software that best meets your small business needs.
Some final considerations to make:
- Will you need support? Check into the support options of the accounting software and estimate any additional costs that may be incurred.
- Do not pay for features that will not be needed.
Free trials are the best way to check out the financial software. Trials are short and usually limited to 30 or 60 days, go through the list above to determine your needs and come up with a plan to test the functionality to decide on the best small business financial software that meets your needs.
Business Financial Planning - A Helping Hand
If you're a small business owner, then you already know that just about everything you've been taught about your business financial planning is a bunch of garbage. Yes, I called it garbage because it's not designed to help you build wealth...
So here's the truth...
Nearly everything being taught about business financial planning in the marketplace, on TV, and in print is designed for one purpose - to separate you from your money and to get it into their company's control.
Because you own a small business you already understand how to make money, but if you're like so many others - you're not exactly sure what you should be doing in terms of investing for the future, getting a reliable return on your money, or how to structure your overall financial plan in a way that optimizes your cash flow.
So what should you do?
Who should you trust?
Those are both important questions, and I'm going to help you with how to find the answer... but I'm going to warn you in advance that it means that you're going to have to think for yourself.
The first rule of business financial planning is that no one cares about your money or success as much as you do. Period. It's just the same as acknowledging that no one else cares about the success of your business as much as you do.
It's not that they are bad people or bad advisers, it's just that they care more about their own bottom line than they do yours... it's human nature.
That means that you're going to have to be accountable for your own money and you can't just turn it over to a so called "Financial Expert" and trust that they are going to take as good a care of your money as you do... It just doesn't work that way and if you need proof, look at the American public.
The majority of them have put money away in investments and followed the mainstream advice about how to grow wealth, but reality is showing that this hasn't worked for most people and the majority of them are relying on dwindling savings & social security to help them scrape by...
This is what happens to most people when they don't take responsibility of their own success - and it doesn't have to happen to you...
So, now that we've established that you can't delegate growing your wealth, the next question you need to answer is this...
Does it make more sense to invest your time, money, and resources into something that you understand really well, or something that you don't really understand? If you agree that investing in things you understand makes more sense then look at what you've done up to this point...
Do you know where your money is invested?
Do you understand how those investments work?
If not, it may be time to reconsider where you're putting all of your resources.
The next question is similar... Does it make more sense to invest in things where you have control of your money, or to invest in things that are out of your control?
That means "Can you effect the outcome of your investments?" or "If things started to go wrong, could you do anything about it?" or "In the case of an emergency, do you have access to your own money?"
If you agree that no one will take as good a care of your personal finances as you will, then it's clear that investing those hard earned dollars into things where you have control also makes sense.
These are just few considerations when learning business personal finances, but where do you go from here?
The next step is for you to invest in yourself and your understanding of how to build and manage your finances in the same way that you've invested in learning how to make your business successful.
Begin thinking for yourself, take the time to learn the skills involved in how to manage and invest your money properly, and you'll begin to see the world of personal finances for you as a small business owner change for the better.
Art to Manage Business Financial Management and Personal Finance
Both a business and families could go into bankruptcy without ever knowing just how much was stolen! A business should never mind wasting your energy putting up security guards at counters. They may cost you much more in discouraging customers buying than you think. And they fail to stop the shoplifter who counts: the professional.
Real pros scoff at physical safeguards which appear to be obstacles. They have been known to get away with goods from closed glass cases when they concentrated on it! Just be sure that you are not wasting your time trying to stop customer petty pilferage while your "faithful" cash-handler may be putting every other dollar of profit into his or her pocket; all the while smiling right at you!
This is a distinct possibility. Ask any detective or insurance man to tell you how often this occurs. The experienced day-to-day money handler becomes so adept at cheating the register and the employer that he will often turn to interesting sidelines, such as cheating the customer in order to enlarge his total take!
Bear this in mind constantly: most money is lost by American business not through shoplifting, not even through inventory pilferage, but through the combined carelessness and crookedness of the semi-managerial and financial officers of the businesses. Leaving aside the question of carelessness for the moment (though it accounts for almost as much as plain thievery), you simply must not be taken in by the "appearance" of new employees or old.
Don't ever hire anyone because you "like" him. Such a method of hiring is invariably wrong. Check thoroughly into the person's background, looking particularly for proof of honesty. Whatever you do, do not attempt to interpret the day-to-day happenings of the business world in the light of a Pollyanna philosophy that all is well. It certainly is not when it comes to handling money. Dishonesty in money handling and financial management is deep in American life.
This goes for business financial management and personal finance. You must watch where the money flows and goes to keep cash in a positive position.
Bootstrap Business Financial Plan - Starting a Small Business With Bootstrap Financing
Preparing a sound, bootstrap business financial plan is the absolute key ingredient for any budding entrepreneur starting a small business with bootstrap financing. Unlike a traditional business plan, a financial plan for a bootstrapped business contains six essential components.
Components of a Successful Bootstrap Finance Plan
1. Expense Summary
The expense summary contains the start-up costs and ongoing operating expenses needed to get your business up and running.
2. Projected Profit & Loss Summary
Your profit and loss summary is a key tool for determining how long it will take your business to become profitable. It reflects a very simple formula of: revenues minus expenses, equals profit or loss.
3. Sales Forecast Summary
Your sales forecast summary is an estimation of what you believe your sales are likely to be each month. Sales forecasting requires research and a solid knowledge of your industry, niche market and product or service.
Starting a small business with bootstrap financing requires laser targeted forecasting. This is not as difficult as it sounds, it just means you must really invest the time in thoroughly researching your business.
4. Reserve Funding Plan
Establishing a reserve funding plan is essential for weathering the "start-up storms". This is a back up funding plan for keeping your cash flows above dangerous levels. Your bootstrap business financial plan must include a reserve funding plan, in order for your new venture to be successful.
5. Cash Flow Management Plan
This is simply the anticipated inflow (sales) and outflow (expenses) of cash through your business by month. Why it's so tricky is due to the fact that you may have slow sales or no sales when you're just getting started. Or, perhaps your customers are not paying within terms. Even if you have great sales on paper, your cash flow management plan will determine your success to a large degree.
6. Balance Sheet
A balance sheet provides a good overall picture of what your business is actually worth. It takes your assets (physical goods like equipment or property) minus your liabilities (debts owed to creditors) and gives you the equity value of your business.
What makes these components different from what you would prepare for a business plan written for bank financing? Well, the main difference is that this plan is just for you. It is an actual plan that you must follow to achieve success in your business. I have seen far too many instances where a traditional business plan is almost completely ignored, once the bank loan check is cashed.
With over one third of brand new businesses failing in their first year of operation, you owe it to yourself to minimize your start up risk, by being well prepared with a sound financial plan.
Where Does a Bootstrapped Business Plan Fit In?
Where does a bootstrap business financial plan fit in? Well, first you must understand bootstrap financing. Starting a small business without borrowing is the ultimate goal of a bootstrapped business' financing strategy. Many new entrepreneurs just don't realize that you can start up a business, even if you have very little money, poor credit or don't own a home. How is this possible? I know that I'm going against conventional wisdom here, but you really can start up a brand new business without BIG bank loans or a stockpile of cash.
Find the free sources of business start up funding your new business needs to survive and thrive. Start by claiming your free copy of The Bootstrapper's Business Start-up Planner, by visiting my website.
©2009 Kimberly Kelly - All Rights Reserved Worldwide.
Permission to reprint this article is granted strictly on the condition that it be reprinted in its entirety, with all live links and author bio in tact.
Business Financial Reporting - Creating the Foundations of Performance
Building the foundations of a sustainable and profitable business is essential for long term viability of the operation. Having complete and timely information about the business and its performance in the marketplace is essential for managerial decision making about the productive capacities, directions and profitability of the business. These foundations are created by implementing a solid structure of business financial reporting. The accounting process needs to take into account, organise and accurately record all financial dealings of the company. At the end of each financial period, these records are then used by the company's accountant to prepare the necessary statements required. The four most common financial reports include the balance sheet, income report or statement, cash flow analysis and the statement of capital.
The balance sheet itemizes all assets that are owned by the business, along with the total debts owed by the business and the value of equity that is invested and owned by the company. The common equation for the balance sheet is the assets total the liabilities, or total amount being owed, plus the value of equity that is in the business. The balance sheet provides businesses with a snapshot in time of how the company is performing and its current financial position.
The income statement is presented in a flow format, which shows a summary of revenue types and amounts, as well as an overview of expense types and amounts, for a specific period of time. The analysis of the income statement provides the level of net profit or loss of the business, visually representing the difference between the company's revenue and expenses. Income statements are particularly important to those charged with the responsibility of managing the business as they represent the bottom line performance of the business over a set period of time.
The cash flow analysis or statement provides an overview of all the sources of income during a set period, as well as how the money has been used. Important for analysing the business's cash flow, identifying specific causes of any increase or decrease in the level of income and profit, business owners and managers utilise the information presented on the cash flow statement to ascertain the success of previous business initiatives as well as identify potential areas of concern.
Representing changes in the level and total amount of the owner's equity in the business over a period of time, the statement of capital represents the level of net income that is at the discretion of the owners to use as they choose.
Manage Business Debt
During this up and down economy most people are thinking that personal debt is a HUGE problem. I don't discount the fact; but managing business debt can be just as much of a horrendous monster. Personally, I've struggled with debt, good and bad, but recovered. This article is to help businesses in debt jump back up on their feet, get company cash flow under control (a little bit at a time) and on the fast track to financial stability.
Business lines of credit, revolving accounts and lack of cash flow can all lead to financial trouble and if not managed properly can head down the road of maxed credit limits and detrimental financial binds. At the moment I have worked with 3 businesses that are struggling financially but would have been in a better situation if they managed their business debt to work in their favor rather than against them.
A couple rules of thumb for business credit:
Don't mix personal profits/expenses with business profits/expenses.
The fact of the matter is if you can't manage your personal finances, don't think that you'll be able to manage both. Both should be treated as two separate accounts. Mixing them together can cause nothing but headache. Smaller businesses have a tendency to do this. Do you?
Have a trusted individual handle the numbers.
When I started Hue Magazine, I knew I was terrible with numbers, so I needed a money person to manage the finances. This worked out great! All I needed was a report at the end of the month and then I knew exactly what I needed to do in order to keep the business afloat.
Use logical sense when leveraging loans.
Loans should be used to help grow a business or improve a financial situation such as renovations (which build equity), or consolidation (which releases cash flow). It should not be an excuse to have a night on the town, even if you're treating that hard-to-nail-down client.
Watch Late Fees, APR's and Due Dates
Be mindful of the WAD. Late fees are inexcusable because it's like giving away FREE money. I see a lot of business owners run into the "Debt Trap" of not wanting to pay small bills because they feel they don't have the cash flow to cover the cost but continue to pay for dinners on a daily basis without a second thought. Strange.
APR's are vitally important too! If you have two cards one with 12% APR and the other at 0% APR, use the 0% for necessary cost. I say necessary cost because 0% APR to a lot of people translate to "FREE" credit which can bite you in the butt in the end.
Finally, payment dates. These can be disastrous if missed. A once $20 minimum payment can change to a scary $200 minimum if neglected. So be mindful of the dates in which a card payment is due. Remember be mindful of the WAD!
These are just a few rules of thumb from my experience of seeing businesses fall into the "Debt Trap." It is hard during this economic time because a lot of small businesses get in over their heads with cost not realizing that if the right measures are taken many money problems can be avoided.
Doing a little bit at a time can help you see the minor details that many may have missed the first go-around. Ensure that you have someone looking at your finances regularly and do a double check because after you look at numbers for a so long, they all start to look the same.
A general rule of thumb for all finances is to ensure that you are not spending more then you make, minimize expenses and maximize cash flow.
I hope this helps. Good luck small businesses!
Business Financial Reporting
The operations of any business are dependent on timely and accurate financial reporting to ensure the decisions concerning the direction and strategies of the business are accurate. Furthermore, as decisions are made and operations occur, the businesses financial position constantly changes.
Profit planning is a term given to the process of originating a prescribed series of steps to be taken to ensure that a profit will be made. Having accurate information through financial reporting software empowers businesses, both large and small to easily assess their information pertaining to their current financial position, trace changes in the businesses financial position and evaluate the success or otherwise of various product, service, branding and marketing activities that the company undertakes.
In order to have set figures to assess the businesses performance against, benchmarking should be undertaken. This is the practice of setting up standards of reference and then measuring them against performance. To action this, a firms accounting records must accurately reflect the performance and changes occurring in the operations assets, liabilities, income, expenses and equity.
The continued operation of your business also relies on maintaining the proper balance among its investments, revenues, expenses and profits. Because profit margins are so critical to the success of a company, any decline in them should trigger an immediate search for the cause. In addition, any sudden increase in revenue should also be assessed to ascertain what triggered the response and whether the company can replicate the ingredients of such success so it may become a long term strategy.
As businesses are competing in an ever increasing competitive environment, controls over performance are essential in driving the company in the most profitable direction possible. Control is the process of assuring that organizational goals are achieved, which usually involves five key steps: setting up the standards of performance, measuring actual performance, comparing actual performance with planned performance, deciding whether any deviations are excessive, and determining the appropriate corrective action needed to bring actual performance into conformity with planned performance.
Software programs allow business operators to easily add input, access and monitor key figures, while empowering them to have timely and accurate business financial reporting records and analysis to base decisions upon. Additionally, software management tools which have financial reporting functions also enable the efficient processing of information, automatic generation of financial documents such as account statements and invoices, while reducing the costs of a manual accounting system. Furthermore, unlike a manual accounting system, the data entered into the program will automatically be posted to the various ledgers and accounts set up.
Business Financial Plan
If you own or operate a business, it is essential that you have a financial plan. Without proper organization or management of your finances, your business could crumble. To avoid this it is important from the point you are starting up, that you plan the various aspects of your business carefully and appropriately. The financial aspect of any business is sensitive and needs to be treated as such. It is necessary to channel the funds available effectively to ensure growth of the business.
A business financial plan covers various aspects of finance which help in achieving financial growth and the business objectives. The objective of the business is a key element when organizing how to run your company. This objective should be able to reflect what you want to achieve in a practical and realistic way. It should also be clearly defined and detailed on the position the company intends to be in a certain time period.
The plan should be able to show an estimate of profits. There will have to be a financial projection of the sales and the amount it will cost to operate the business. It is also important when you are coming up with a business financial plan that you have control of its implementation. There should be a clear and systematic delegation of financial responsibilities put in place. Since you are dealing with money here, there needs to be a level of sternness that has to be put into effect. There has to be control and accuracy when dealing with finances and this will make it easier for you and the company when it comes to dealing with taxes.
Risk is always a part and parcel of any business venture. Your financial plan should include a risk management aspect. Since you are already planning, you are in essence reducing your business risks. Despite all this, it is impossible to know what the future holds, so it is advisable to always have as much shortcomings as possible covered.
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