Finance Info 2009-11-20T20:12:29Z Finance and business information to help build your bottom line. tag:businessknowledgesource.com,2009:/finance/6 Movable Type Copyright (c) 2009, DF Finding investors 2009-11-20T20:12:29Z 2009-11-20T19:15:00Z tag:businessknowledgesource.com,2009:/finance/6.29166 2009-11-20T19:15:00Z Every business large or small finds themselves at a time where the need arises for more capital for development. While small businesses owners especially struggle with this dilemma every business owner at one time or another begins to consider... DF don@greatresults.com Investors handshake37193873.jpg
Every business large or small finds themselves at a time where the need arises for more capital for development. While small businesses owners especially struggle with this dilemma every business owner at one time or another begins to consider their options. Many times the idea of finding an investor seems like a good idea but finding an investor is not like finding a clam on the beach; the search is more similar to finding the pearl. So if you are business owner considering looking for a way to raise some capital here are some tips for finding an investor-

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  • Know who you are looking for. You should keep in mind that your chances of connecting with the investor you need will be much better if you keep a profile of the "typical" investor in mind. According to studies that typical investor fits the following categories-
    1. Has an annual income that exceeds $100,000
    2. Is between 40 to 60 years old
    3. Will have a net worth in excess of $1,000,000
    4. Has had previous successful entrepreneurial experience
    5. Is someone who expects to hold on the investment for up to five to seven years (although some investors wish to "cash out" after only a few years)
    6. Is someone who enjoys advising the entrepreneur and likes to be part of the action
    7. Will invest up to $150,000 but may participate in a syndicate of other investors bringing the total investment to multiples of individual investments
    8. Will refer deals to other private investors even if he or she has chosen not to invest
    9. Is someone who likes to invest in an industry with which the investor is familiar
    10. Will source deals through referrals.

    You should understand that successful investors will look for companies with growth and export potential. They are people who understand that it may take several years before their investment will pay off - although they also expect to be well compensated for their risk.


    • Look for investors close to home. Because so many investors like to play an active role in the business they invest in, they prefer to invest in businesses that are close to home. Most likely your biggest investor will want to be able to see your business up close and personal.

    • Network, network, network. You should keep in mind that you may need to be referred to an investor. They are generally not hanging out on the street waiting to talk to whoever comes by. So to find an investor you need to get to know the right person (the one who can refer you to the investor you are looking for), which means immersing yourself in your local business and social community. It can also be helpful to focus on business owners - as these are the people who might be or become investors themselves or know a potential investor. Savvy business owners will join business and trade organizations and regularly attend the meetings. Also joining civic and community organizations can be great for networking, along with attending trade fairs and events. Whatever you do get your face and your name out there and meet as many people as possible.

    • Remember that most investors do not fly solo. While there are some investors who invest entirely on their own, many will operate as part of an informal network or syndicate where they can pool their resources and share the risks. Consider checking with business alliances or economic development councils where you live since there may be an active group of potential investors in your community.

    While finding an investor is not a particularly easy task, the effort can really pay off when you find the right investor who is willing to invest in your business. Besides providing the capital your business needs, the advice and know-how of an investor can be a vital key to shaping your company's success.

    ]]>     Financing your business through private placement 2009-11-19T19:12:26Z 2009-11-19T19:10:00Z tag:businessknowledgesource.com,2009:/finance/6.29165 2009-11-19T19:10:00Z The one constant in the life of any business (especially startups or small businesses) will be the need for a cash infusion to jump start sales, expand into new markets, or continue to sustain growth. While there are a... DF don@greatresults.com Finance mansayingbequiet10038816.jpg
    The one constant in the life of any business (especially startups or small businesses) will be the need for a cash infusion to jump start sales, expand into new markets, or continue to sustain growth. While there are a multitude of financing sources of funding available to business owners, each source will have its limitations and requirements. For example, commercial bank loans are often intended for businesses that have been around and have shown a steady stream of profitability. They are much more difficult for smaller business to access since lenders see these companies as having a much higher risk. The good news is that for these situations there are options. One of the best options is private placement. Private placements can be an attractive alternative for growing companies.

    ]]> Private placement is also known as private investment capital. This is money that is invested in your company usually from private investors in the form of stocks and sometimes bonds. One of the benefits in the United States is that private placement often does not need to be registered with the Securities Exchange Commission. Regulation D is the most popular form of non-public private placement. Financial records show that several hundred billion dollars are issued in the private placement market each year. Interestingly, the majority of those dollars came from pension funds, investment pools, banks and insurance companies amounting to just over 2,000 deals. However you should keep in mind that private placement does exist for the small business owner and is often less expensive and easier than taking your company public.

    There are many benefits to private placement. Here are just a few of them:

    • Private placement has a high degree of flexibility. With the amount of financing ranging from $100,000 dollars to 10-20 million dollars with combinations of debt, equity, or debt and equity capital this makes this option workable for almost every business.

    • Private placement investors are often more patient. Many investors are willing to wait for a return on their investment. While venture capitalists are seeking almost immediate payoffs investors are often seeking 10 to 20% return on investments over a longer term of 5 to 10 years.

    • Private placement has a much lower costs. This is a much more cost effective method than approaching venture capitalists or selling the stock to the public as an IPO (Initial Public Offering). Businesses can generate the needed cash flow without incurring significant debt to do so.

    • Private placement is faster. This method of financing is a much quicker form of raising money than usual venture capital markets. This is especially good for small businesses that need the cash flow quickly and cannot afford to wait out lengthy stock negotiations.

    While every business can possibly benefit from private placement there are businesses that are more ideal than others. The ideal small business candidate for private placement is a company in the third stage of finance and is looking for growth or expansion funding. Small business owners might think private placement only applies to start-ups when your company has completed product development, conducted a market-feasibility study and business planning but start-up funding often comes from angel investors.

    The money from private placements will come from accredited investors as it is defined by the SEC Rule 501 under Regulation D as:

    • An individual who is earning $200K per year.

    • A household that has an income of $300K per year or having a net worth over $1M.

    • Or a venture funds, some banks and other institutions.

    You can connect with bankers, attorneys, and accountants who can network your small business with a private investor. Private placement can offer a viable form of business financing without the constraints of taking a company public and conceding control.

    ]]>     Equipment leasing, is it an option for you? 2009-11-18T19:13:38Z 2009-11-18T19:05:00Z tag:businessknowledgesource.com,2009:/finance/6.29164 2009-11-18T19:05:00Z Running a business can be a very difficult thing to do especially when the economy is unpredictable, but there are still things that you can do to make sure your business is successful. Sometimes when purchasing something outright isn't... DF don@greatresults.com Finance organizedoffice16487189.jpg
    Running a business can be a very difficult thing to do especially when the economy is unpredictable, but there are still things that you can do to make sure your business is successful. Sometimes when purchasing something outright isn't an option, leasing can be a good alternative. Leasing equipment for running your business can be a viable option if you don't have a lot of cash on hand for purchasing it on your own.

    ]]> People all over the world are looking for options to save money on the operation of their business and have learned that leasing is something they can do to save money while keeping the business afloat. Leasing equipment is often thought of as something that can only be used by a large business that needs to constantly be revitalizing their equipment and processes. But the reality of the matter is that leasing equipment can be a good option for a business of any size. Even very small or new businesses can take advantage of leasing equipment rather than just purchasing it. It is an especially good decision for newer or cash strapped businesses because equipment can be very costly at first and is normally paid for in one shot. Leasing equipment offers more flexibility than just a purchase and also allows for the use of the machinery and equipment to be paid over time.

    Leasing can also be great for medium sized business that are in expansion mode and are growing. Growth can actually be a very difficult time for a business especially because new offices are being opened up and new production facilities are also being acquired. This expansion and addition of new employees and facilities requires more equipment and also a great deal of cash if you plan on just buying these things. But this isn't always an option, so leasing the equipment can be one of the best ways to get the needed materials while keeping some cash on hand. Largo corporations also benefit from leasing equipment and use it to keep up production even when they are under a lot of pressure to cut costs.

    When there isn't enough money to buy something outright, or when the financing isn't available, then a lease option can be another great way to have the necessary equipment without the dramatic depreciation of it. The best thing that that leasing has to offer is options. Many people find that leasing equipment can actually be a good alternative even over an extended period of time. Leasing to buy can be a great way to still end up owning the equipment if you want to keep it after you've used it for a while. A lease option is also known as rent to own. This basically offers someone the chance to rent or lease equipment and the opportunity to buy the equipment later applying the money you have already paid to the purchase of the equipment. This is great because it allows you to try out the equipment before you make the final decision to purchase. This is especially helpful when you realize that you either don't need the equipment or that it is not an exact match to your needs. If you realize that the equipment doesn't meet your needs, then you are not obligated to keep it.

    Leasing equipment can be a very good option for many people but the decision always needs to be based on real numbers and figures and not just on what the competition is using or what the hottest new trend is. Be sure that you make the best decision for your business and that will add the most to the bottom line.

    ]]>     Common business finance problems 2009-11-17T19:12:31Z 2009-11-17T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29163 2009-11-17T19:00:00Z It is unfortunate, but many businesses will fail because of several common business finance problems. One way that a business can protect itself against this type of failure is by knowing and understanding these common business finance problems. This... DF don@greatresults.com Finance overworkedwoman23649135.jpg
    It is unfortunate, but many businesses will fail because of several common business finance problems. One way that a business can protect itself against this type of failure is by knowing and understanding these common business finance problems. This article discusses several of the common business finance problems that many businesses experience.

    ]]> Extending too much credit

    Another common business finance problem is extending too much credit. It is easy for a business to be trusting to their good and friend customers. A business owner may feel that allowing their customers to purchase things on credit will encourage them to buy more and will keep their customers happy. While this is the case in many of the customer credit cases, extending too much credit can be a very big finance problem for a business.

    A business needs cash flow to survive. If the majority of their customers are purchasing things on credit and not paying their invoices off, the business will soon run out of cash flow.

    It can also be a problem for the business when they are too lax on the terms of the credit they are giving their customers. It might be a good idea for a business to set up stricter rules. For example charging late fees for overdue payments might be a great way to encourage customers to pay their invoices on time. Charging interest on late payments, or giving discounts to customers who pay their invoices early are also great ways to get customers to pay off their invoices.

    No cash flow

    One of the most common business finance problems is the lack of cash flow in the business. A successful business needs cash flow. There are supplies to purchase, inventory to stock, employees to pay, etc. If the business does not have the money it takes to purchase and pay for these things, they will not be able to stay in business.

    To make sure that they have cash flow, a business may need to take out a loan from a bank, or they could use invoice factoring, or get another type of financing. There are several options for business owners to choose from to ensure that their business has cash flow.

    Too much debt

    A common business finance problem is that a business owner goes into debt, too much debt. It is important that a business owner does not take out more money in loans or other forms of business financing than they really need. The business owner should make a very detailed plan for the money that they will be getting from financing and make sure that they only get what they really need to run the business. Far too many businesses borrow too much money without planning and end up not being able to pay their bills.

    Business expenses cost too much

    Many business owners are very interested in their business' finances at the beginning, and then as soon as their business is running well, they may overlook things in the years that follow. Having business expenses that cost too much is a very common business finance problem. It is important and essential that a business owner pays attention to their expenses. They should take time at the end of each month to see what their business expenses are adding up to.

    Are there changes that can be made in the way things are done? Could these changes help the business save on business expenses each month? It is also likely that there are less expensive options for business venders for the supplies etc that the business uses. Many businesses could save a lot of money if they would just take the time to shop around for new venders ever so often.

    ]]>     Business finance software options 2009-11-16T19:12:54Z 2009-11-16T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29162 2009-11-16T19:00:00Z It is essential that any successful business manages their finances well. One way that a business can manage their finances is through the use of business finance software. There are many different business finance software options available to business... DF don@greatresults.com Finance CD30442476.jpg
    It is essential that any successful business manages their finances well. One way that a business can manage their finances is through the use of business finance software. There are many different business finance software options available to business owners who are interested in managing their finances well. Since there are so many different options for business finance software, it is important that a business becomes familiar with the options. This article discusses several of the business finance software options that are available.

    ]]> CODA

    While there are a lot of business finance software options for small businesses, CODA provides a great option to the businesses that are on the medium to large side of business organizations. This business finance software helps a company make their entire finance process easier and quicker. It helps a business be able to better handle the different financial transactions, finance analysis, and finance processes.

    Quicken

    Quicken Home and Business finance software is a great choice of software for the smaller businesses, especially a business owner who owns a home business. This business finance software can help a person keep their business finances and their personal finances separate. The newest version of this business finance software helps the business owner keep track of all of their bills so that they will never miss paying a bill because they forgot. It also helps the business owner to save money and shop smarter by helping them get coupons and other discounts on the things that they often purchase.

    Strativia

    Strativia Simple Financial Software has a couple of great business finance software options available. Strativia's Small Business Pro financial software can help a small business better keep track of their finances. This software is easy to use and offers a variety of finance management tools. For example it allows a small business to do a balance sheet, to do invoicing, and this software even has a general ledger. A business owner can easily and quickly track their payables and receivables, their expenses, as well as keep track of their bank transactions with the business finance software.

    Strativia also offers the financial software Bookkeeper. It is less expensive than Strativia's Small Business Pro finance software. Bookkeeper helps a business owner control their inventory, do purchase orders, invoicing, billing, payroll, and even credit card processing. This finance software makes dealing with business finances easier and faster.

    QuickBooks

    QuickBooks is another great option for the smaller businesses looking to use some great business finance software. This finance software helps a business keep their finances organized and in one place and it can help them to spot problems with their business' finances. QuickBooks business finance software helps business' see how much money they have and where it goes. QuickBooks is easy to use but will help a business keep better track of their finances.

    There is a large variety of business finance software available to all businesses. Because there is such a large variety, it is important that a company does their research about each of the business finance software they are interested in using for their company. A business owner should find a business finance software that works best for the needs of their company. For example, a small business finance software program would probably not work very well for a larger business. And a small business probably does not need to spend the money on a business finance software program that has a lot of business finance tools that their business does not need.

    ]]>     Best products for tracking business finance 2009-11-15T19:12:23Z 2009-11-15T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29161 2009-11-15T19:00:00Z There are a lot of numbers to keep track of when it comes to dealing with a business' finances. It can be difficult to keep all of these numbers straight let alone track of business finances without the use... DF don@greatresults.com Finance computer32730956.jpg
    There are a lot of numbers to keep track of when it comes to dealing with a business' finances. It can be difficult to keep all of these numbers straight let alone track of business finances without the use of some type of product. There are many different options for business finances software that can help a business track their finances. This article discusses several of the best products available.

    ]]> Strativa-Simple Financial Software

    Strativa offers a couple different small business finance software that can help a business track their finances. Strativa's Small Business Pro is a terrific option for any business owner to help them track their business' finances. It offers its customers a balance sheet, a general ledger, invoicing, etc. The set up involved in this product is simple and a business can quickly set up their account information.

    Strativa's Small Business Pro tracks payables, receivables, and expenses for the business, and it even merges the business' bank transactions with their accounting records. A business can download Strativa's Small Business Pro right from their website for just $89.95, or they can order it and receive the CD-ROM for the same price.

    Strativa also offers Bookkeeper which is another terrific way for a small business to track their business' finances. Bookkeeper allows a business to manage their expenses and their sales. It helps them with payroll and credit processing, billing, inventory control, invoicing, and purchasing orders. Strativa's Bookkeeper helps a business to pay bills, collect payments, and easily handle their business' daily accounting. The cost for the Bookkeeper CD-ROM or the download is just $29.95.

    QuickBooks

    QuickBooks is another great financing product to help small business owners track their business' finances. Using this software a business owner can track their business' sales and expenses, they can pay bills, print checks, and create invoices. Since the finances are all in one place, QuickBooks makes getting the business' finances tax ready very simple.

    NetSuite

    NetSuite is a great choice for finance software for a bigger business. It can help a business make better decisions concerning their finances and help them to grow faster. NetSuite accounting software allows the business' data to be pulled up in any of the business' departments. This allows the employees to quickly identify and solve any problems that may arise. Data and reports will be easier for the business owner and their employee to get a hold of so no time is wasted trying to track down expenses and other business finances. NetSuite accounting software can be found online.

    Quicken

    Quicken Home and Business 2009 allows a business owner to track their business expenses, pay their business' bills on time, and see how the business is doing at the end of each month. This finance software is best for a smaller, home based business. It can help a business owner differentiate between their business finances and their home finances, especially if any of them intermingle through bill pay etc. A business owner can either download Quicken Home and Business straight from Quicken's website, or they can order the CD-ROM. Either way the cost of the Quicken finance software is $69.99.

    Myfinancialsoftware.com

    Myfinancialsoftware.com offers business owners a more comprehensive option for financial software to help them track their business finance. There is both a traditional business finance software offered, as well as an internet business finance software available. Either software choice allows for an easier way for a business owner to keep track of their business expenses, their sales, their business' cash flow, a balance sheet, and an income statement. The cost of either financial software from myfinancialsoftware.com is $9.95.

    ]]>     Best business finance software for under $1000 2009-11-14T19:12:36Z 2009-11-14T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29160 2009-11-14T19:00:00Z For this reason, most small businesses will use accounting software to help them keep track of their finances. This is especially true for companies who are just starting out and don't think they can afford an accountant. Failing to... DF don@greatresults.com Finance homeoffice37476494.jpg
    For this reason, most small businesses will use accounting software to help them keep track of their finances. This is especially true for companies who are just starting out and don't think they can afford an accountant. Failing to keep accurate track of finances and accounts payable could result in poor credit scores and financial difficulties for the business.

    ]]> QuickBooks
    QuickBooks is one of the most popular business financial software. QuickBooks is an excellent choice, and has a lot of different help types, both on and offline, so you have support if you get stuck. There are many features that your business will enjoy, and because QuickBooks is scalable, so even as your business grows, you can upgrade to the more advanced versions without having to learn a whole new program.

    Peachtree Accounting
    This software is designed specifically for small and home business owners and is worth looking into if you need a wide variety of features from a recognized name. Some of the things you can do with Peachtree include manage your accounts receivable, accounts payable, inventory, payroll, job costing, fixed assets, and general ledger. Other features designed specifically for small or home-based businesses include such things as Internet postage, credit card service, direct deposit, and ability to manage contacts.

    Microsoft Money Deluxe and Business versions
    As equally popular as Quicken, Microsoft Money also provides a number of features for those looking to manage the day to day operations and accounting of their small business. It is a little cheaper than Quicken, and has a number of features specifically for business accounting. These include including the ability to create customized invoices, estimate tax payments, compare financial data, balance your checkbook, track cash flow, and pay your bills. You can also find different versions on Microsoft's website, depending on your needs.

    Other things to consider
    When looking for business finance software, you should look at other factors in addition to price, including:

    Handling finances for a business is much more complicated than handling funds for a household. There are taxes, payroll, fees, accounts payable, and ongoing expenses that can quickly become complicated and difficult

    • Know what you need. There are thousands of types of software made specifically for businesses, but they do not all have the same features. Make certain you know exactly what you need before you start shopping around. Try it out before you buy it. Not all financial software is made alike, so make sure it actually has the features you need before you purchase it. Ask the salesperson to show or send you a demo. If the salesperson has difficulty navigating the software, or if you try it out and find that it is too complicated to set up or use, keep looking.
    • Consider other costs and factors. You may get a good deal on business finance software only to find that it requires expensive updates every six months, or that you will be charged for tech support. In addition, make sure the software has a tech support number that is easy to reach and doesn't require hours on hold.

    Business finance software is important for keeping track of your finances, but you don't have to break the bank.

    ]]>     Best banks for business finance 2009-11-13T19:12:38Z 2009-11-13T19:05:00Z tag:businessknowledgesource.com,2009:/finance/6.29159 2009-11-13T19:05:00Z There are a lot of banks for a business owner to choose from when they are in need of business financing. But what are some of the best banks for business finance? This article discusses several of the best... DF don@greatresults.com Banks building37765995.jpg
    There are a lot of banks for a business owner to choose from when they are in need of business financing. But what are some of the best banks for business finance? This article discusses several of the best banks for business finance.

    ]]> Bank of America

    Bank of America is a good choice for business finance for several reasons. Bank of America offers several different business checking accounts. Since businesses come in many different sizes it is great that Bank of America offers several different types of business checking accounts to accommodate different sizes of businesses. Bank of America offers a Business Advantage, Business Checking, Business Interest Checking, and Business Analyzed Checking account. A business owner can compare the differences of these checking accounts on Bank of America's website.

    Bank of America also offers Business Check Cards. A business owner is able to deposits at an of the Bank of America Banking Centers and at many of Bank of America's ATMs. Business owners who use a Business Check Card from Bank of America can also make cash withdrawals and business purchases using the card. Since purchases that are made with this card are itemized each month, a business can easily track their spending.

    Bank of America also offers business lines of credit, business loans, business leases, and SBA financing. They offer many different types of loans, leases, and lines of credit to help out a variety of business owners. With business lines of credit a business owner can get a business credit card or a premium creditline depending on what they need and what they qualify for. Bank of America offers Real Estate, Equipment, Vehicle, and Secured business loans. And SBA loans can be a great option for small businesses who may not qualify for other types of credit.

    Chase

    Chase offers a variety of business checking accounts for business owners. For example, they offer Chase BusinessClassic, Chace Advanced Business, Chase BusinessPlus, and Chase Non-Profit Business Classic checking accounts. Each checking account offers different things, so a business owner should take time to research to find out which Chase business checking account would work best for their business.

    A great feature that Chase offers their business members is online banking. A business owner can pay any bills, do employees' direct deposit, etc, all electronically. This is a great time-saving feature. Chase also offers a variety of business lending options. They have business lines of credit, and overdraft line of credit, and business credit cards. Chase has Term loans, Real Estate financing, and Small Business Administration loans and lines of credit. Chase also offers True leases, TRAC leases, and Conditional Sales Agreements (CSA) to business owners.

    Camden Nation Bank

    Camden Nation Bank offers business owners business checking accounts, savings accounts, CDs, IRAs, business lending, and 24 hour, seven day a week banking. Camden National Bank has Business Checking I and Business Checking II, Attorney Financial Suite, Non-Profit Business NOW Account, One Business Solution, and Free Business Vantage Checking accounts. A business owner can quickly and easily compare the different checking accounts that Camden Nation Bank offers by using the checking account comparison chart that is located on Camden Nation Bank's website.

    Camden Nation Bank also offers a variety of lending options to their business members. They offer business loans, Commercial Real Estate Loans, Lines of Credit, Letters of Credit, Merchant Services, Leasing, Business Credit Cards, Business Overdraft Protection, and Government Guaranteed Loan Programs. Business owners will still need to qualify to utilize these types of lending options.

    ]]>     AR financing 2009-11-12T19:12:33Z 2009-11-12T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29158 2009-11-12T19:00:00Z Small business owners face a constant struggle of attaining capital to finance the growth of their business or meet cash flow shortages. When regular small business financing such as loans and credit are limited, some business owners will then... DF don@greatresults.com Finance cashflow19162760.jpg
    Small business owners face a constant struggle of attaining capital to finance the growth of their business or meet cash flow shortages. When regular small business financing such as loans and credit are limited, some business owners will then turn to accounts receivable financing. But the biggest question may be is accounts receivable financing right for your business?

    ]]> Accounts receivable financing is defined as the selling of outstanding invoices or receivables at a discount to a finance or factoring company that then assumes the risk on the receivables and provides quick cash to your business. It is important to keep in mind that the amount of value assigned to the account depends on the age of a receivable. For example: a more current invoice will pay more than one that is older. Also business owners should understand that any accounts receivable over 90 days typically are not financed. Accounts receivable financing may also be known as accounts receivable factoring or accounts receivable funding.

    Small to mid-size companies can benefit substantially from the ability to quickly and economically turn their Accounts Receivable into cash or working capital. Accounts Receivable financing is based on business and personal credit scores. It is important to realize that you must have your personal and business finances in order to subscribe to a Accounts Receivable Financing Program.

    There are several benefits to Accounts Receivable Financing. Some of these are:

    • The business can pass off collections. Outsourcing your accounts receivable management to another company can then free up your resources to focus on other more productive activities such as selling.

    • You can free up working capital. Many businesses have the majority of capital tied up in their inventory. Accounts receivable funding can allow a company to free up capital tied up in inventory to be used for other reasons.

    • It is a source of quick financing. It is important to note that Accounts receivable factoring will not require a business plan or tax statements. This is a quick form of cash often used for businesses that are experiencing a cash crunch.

    While these are some of the benefits to factoring your accounts receivable, business owners should also understand that there are potential drawbacks to using this method to finance your small business. One of the biggest downsides to accounts receivable financing is the cost. While a 5% discount fee and other charges might not seem high this month, over the course of a year the costs can greatly exceed the interest on bank credit or a loan. Rates can vary widely among companies so it is crucial to shop for the best deal and contract.

    Business owners who are considering this method of financing for their small business should consider the following questions:

    • Is the money needed necessary for the businesses survival, or moreover to take advantage of an opportunity?

    • Does this financing strategy match with your business plan? If you have no business plan it is crucial to put together a plan prior to taking on additional money.

    • Is your small business ready for more money and expansion?

    • As the business owner have you explored all possible sources of small business financing?

    • What are the current economic and industry conditions in your area? Is this a favorable time to finance?

    While taking the accounts receivable funding plunge can be the difference between company survival and bankruptcy savvy business owners will carefully consider all options. It is important to keep in mind that the factoring industry is not as regulated as banking. You should spend the necessary time to investigate the companies you are considering working with. Also be sure to inspect contracts and negotiate discount rates. The bottom line is that using accounts receivable financing can buy time to eventually qualify for a regular credit line from your bank.

    ]]>     Analyzing Your Business Finance 2009-11-11T19:12:59Z 2009-11-11T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29157 2009-11-11T19:00:00Z It is a good idea for business owners to take time to analyze their business finances. Business owners who take the time to do this may be able to find additional ways to make money or may be able... DF don@greatresults.com Finance books30364900.jpg
    It is a good idea for business owners to take time to analyze their business finances. Business owners who take the time to do this may be able to find additional ways to make money or may be able to find money that is already there. They can also spot potential financial problems before they get out of hand. But many business owners may not know much about business finance and so they may not know what to look for. This article discusses analyzing a business' finances to help a business owner know what to look at and what to look for when they analyze their business finances.

    ]]> Analyzing business financial statements

    A business owner should look at their business' financial statements when they are analyzing their business finances. Business financial statements include statements such as balance sheets, income statements, statements that state changes in financial positions, and any statements that who changes in the business owner's equity. These financial statements can provide a business owner with information on how their business is doing financially and what they can do to plan for the future of their business.

    When a business owner analyzes these financial statements they are able to see any financial trends that the business has. Sometimes there trends are not a good thing and if they are caught early they can save a business before the problem grows out of control. Analyzing these financial statements also allows a business owner to monitor their business' cash flow so that they can identify any needs their business may have early on. And an analysis of financial statements can help a business owner be able to compare their performance with the financial goals and plans they have had for their business.

    Analyzing business ratios

    Analyzing business rations allow a business owner to analyze financial statements in bigger picture than just viewing a number. Comparing numbers to other numbers gives a business owner a better idea of what is going on with their business' finances over time. There are many different ratios that a business owner can look at and analyze in their business. For example, a business owner can analyze solvency ratios, profitability ratios, efficiency ratios, and liquidity ratios.

    Examples of solvency ratios include ratios such as debt to equity, coverage of fixed costs, interest coverage, and debt to assets. Many of the common profitability ratios that a business owner should analyze are return on assets, return on equity, operating profit percentage, net profit margin, and gross profit margin ratios. Fixed asset turnover, ratios for accounts receivable, ratios for inventory, and total asset turnover are all examples of efficiency ratios. And current and quick ratios are liquidity ratios, or working capital.

    Analyzing cost/volume/profit

    When a business owner analyzes cost/volume/profit, they are analyzing the real cost of them providing the good or service that they provide and the best operation level for their business. Analyzing cost/volume/profit can help a business owner see the relationship that is between their fixed and their variable costs, their volume, and the profits their business makes.

    A business owner can get information from this analysis that will tell them how much they need to sell to just break even depending on the different costs and price options. They can also compare the different products, services, or lines they offer to see which is most profitable. And it can help them learn more about operation leverage. This will show them their fixed costs that allow the business to make more money when their sales are up, but also makes them lose more money when their sales go down.

    ]]>     What does a bank look at during their risk assessment process 2009-11-10T19:12:24Z 2009-11-10T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29001 2009-11-10T19:00:00Z There is a lot of money available at a variety of banks for businesses to use to help them get or stay in business. But just because the money is there does not mean that anyone who starts or... DF don@greatresults.com Banks spying30342635.jpg
    There is a lot of money available at a variety of banks for businesses to use to help them get or stay in business. But just because the money is there does not mean that anyone who starts or owns a business can get the money to use for their business. When a person is applying for a business loan, there is a process that they will have to go through so that they can get the money that they need. One part of the business loan process is the risk assessment process.

    ]]> A bank needs to have a risk assessment process during their loan process to protect themselves. They need more assurance, than just a business owner's word, that they will get their money back. The risk assessment process provides a bank with that assurance. Though a risk assessment will not guarantee the money, it does help them better decide if it is more than likely that the business will pay back the money. Risk assessments also help the bank know how much they should lend to the business owner as well as the interest rate that will be on the loan. This article discusses what a bank actually looks at during their risk assessment process.

    Credit history or credit report

    When a person is applying for a business loan the bank will look at their credit history or their credit report during the risk assessment. A business' credit history or credit report shows the history of the business' past loans. For example a credit report will show if the company has been able to repay their past loans on time. It will show if they have had any late payments or if they have had to file bankruptcy.

    Credit score

    A person's and a business' credit score is computed from the credit history. If the person or business has a poor credit score it means that they do not have a good credit history. It is possible that they have paid their payments late or maybe they do not have much credit history at all.

    When a credit score is in the 500's it is possible that the business will not get a very good loan if they get a loan at in the first place. This means that the loan may not be for a very large amount of money and/or it will have a high interest rate. The higher a person's or business' credit score is, the better chance the person or business has to get a business loan. Also, when the credit score is higher the person or business will get more money and have a better interest rate on their loan.

    Income

    The income of the person and their business is also an important factor during the risk assessment process when they are applying for a business loan at the bank. The higher a business' income the higher their chance of getting a loan, especially for the amount they need. The reason that banks like the person or business to have a pretty good sized income is so they know that if they have the money they are more likely to pay back the loan they got from the bank.

    When a person is first setting up a business, and they need a loan to do so, they need to have a good business plan. The reason that the person needs a good business plan is to prove to the bank that they have a plan to get income. The bank wants to see that the business will have the money to be able to pay back the loan that they get from the bank.

    ]]>     What does a bank look at during their risk assessment process 2009-11-10T19:12:26Z 2009-11-10T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.29002 2009-11-10T19:00:00Z There is a lot of money available at a variety of banks for businesses to use to help them get or stay in business. But just because the money is there does not mean that anyone who starts or... DF don@greatresults.com Banks spying30342635.jpg
    There is a lot of money available at a variety of banks for businesses to use to help them get or stay in business. But just because the money is there does not mean that anyone who starts or owns a business can get the money to use for their business. When a person is applying for a business loan, there is a process that they will have to go through so that they can get the money that they need. One part of the business loan process is the risk assessment process.

    ]]> A bank needs to have a risk assessment process during their loan process to protect themselves. They need more assurance, than just a business owner's word, that they will get their money back. The risk assessment process provides a bank with that assurance. Though a risk assessment will not guarantee the money, it does help them better decide if it is more than likely that the business will pay back the money. Risk assessments also help the bank know how much they should lend to the business owner as well as the interest rate that will be on the loan. This article discusses what a bank actually looks at during their risk assessment process.

    Credit history or credit report

    When a person is applying for a business loan the bank will look at their credit history or their credit report during the risk assessment. A business' credit history or credit report shows the history of the business' past loans. For example a credit report will show if the company has been able to repay their past loans on time. It will show if they have had any late payments or if they have had to file bankruptcy.

    Credit score

    A person's and a business' credit score is computed from the credit history. If the person or business has a poor credit score it means that they do not have a good credit history. It is possible that they have paid their payments late or maybe they do not have much credit history at all.

    When a credit score is in the 500's it is possible that the business will not get a very good loan if they get a loan at in the first place. This means that the loan may not be for a very large amount of money and/or it will have a high interest rate. The higher a person's or business' credit score is, the better chance the person or business has to get a business loan. Also, when the credit score is higher the person or business will get more money and have a better interest rate on their loan.

    Income

    The income of the person and their business is also an important factor during the risk assessment process when they are applying for a business loan at the bank. The higher a business' income the higher their chance of getting a loan, especially for the amount they need. The reason that banks like the person or business to have a pretty good sized income is so they know that if they have the money they are more likely to pay back the loan they got from the bank.

    When a person is first setting up a business, and they need a loan to do so, they need to have a good business plan. The reason that the person needs a good business plan is to prove to the bank that they have a plan to get income. The bank wants to see that the business will have the money to be able to pay back the loan that they get from the bank.

    ]]>     Unsecured business lines of credit 2009-11-09T20:12:19Z 2009-11-09T19:20:00Z tag:businessknowledgesource.com,2009:/finance/6.29000 2009-11-09T19:20:00Z Any business, whether it is a big or small business, needs to have a cash flow. If a business is running short on cash, they may not be able to continue to stay in business. While there is more... DF don@greatresults.com Finance spying35812910.jpg
    Any business, whether it is a big or small business, needs to have a cash flow. If a business is running short on cash, they may not be able to continue to stay in business. While there is more than one option for a business to get this cash flow, an unsecured business line of credit is one of the best options available for businesses. Unsecured business lines of credit open a lot of opportunities for businesses without require them to provide collateral when getting the loan. This article discusses unsecured business lines of credit.

    ]]> What is required to get an unsecured business line of credit

    Unsecured business lines of credit can be a difficult loan for businesses to get. There are certain things that are required for a business to get an unsecured business line of credit. The business is usually required by the lender to have been in business for at least one year. The business will also need a credit score that is above 680.

    For a business to ensure that they will one day be eligible for an unsecured business line of credit, they should make sure that they have a good credit history. A business can ensure that they have a good credit history by taking out business loans from lenders who will report the business' credit status and the business should make sure that they pay back the loan on time.

    What unsecured business lines of credit can be used for

    A business can use unsecured business lines of credit to help them pay for their business' equipment and business supplies. An unsecured business line of credit is easier for a business to use to buy the equipment and supplies for their business because they do not have to deal with the whole process of regular loans from a bank.

    A business can also use unsecured business lines of credit to help them pay off any high interest debt they may have accrued when they have used credit cards. And if the business is temporarily experiencing a lack of cash flow, an unsecured business line of credit can help them with that. Unsecured business lines of credit can also open up other business opportunities to the business that would not be available if they did not have the money.

    Why unsecured business lines of credit are good

    Unsecured business lines of credit can be a good thing for some businesses because they can help a business to pay down any high interest debt they may have, especially on debt such as credit card debt. Generally unsecured business lines of credit will have a lower interest rate than the business' credit cards with really high interest rates. There are other types of loans that have high interest rates that an unsecured business loan can help a business pay off these loans with a lower interest rate.

    An Unsecured business line of credit can also be good for a business because the business does not need to provide any collateral, it is not personal debt, an unsecured business line of credit does not require equity, and the business can be approved for the unsecured business line of credit in less than 24 hrs and can get the money a few days after they are approved.

    How unsecured business lines of credit work

    If a business is approved for an unsecured business line of credit they will receive checks that the business will be able draw on their line of credit when they need the money. Usually these lines of credit are revolving lines of credit. This means that the business uses just what they need from the loan and the business will only be charged interest on the money that they use from the unsecured business line of credit.

    ]]>     Tracking business finance 2009-11-08T19:12:29Z 2009-11-08T19:00:00Z tag:businessknowledgesource.com,2009:/finance/6.28999 2009-11-08T19:00:00Z Thousands of businesses start up every year. Most of these businesses cannot survive the first year. Most businesses fail in this early stage because of poor business finance. Business finance encompasses a wide range of business characteristics. After all,... DF don@greatresults.com Finance handicapped16011891.jpg
    Thousands of businesses start up every year. Most of these businesses cannot survive the first year. Most businesses fail in this early stage because of poor business finance. Business finance encompasses a wide range of business characteristics. After all, a business is only a business if it makes money. Money is the key to small business success. But, not only do you have to find out what your customers want and are willing to pay, but also you also have to come up with a strategy for how you are going to manage the money that you do make. It can take years for a business to make enough money to be able to turn a profit. Until then, you will need to have a way of tracking your business finances so that you can reinvest, pay off debts, and make your business grow until it can sustain itself.

    ]]> Many characteristics of business finance need to be tracked in order to have financial prosperity in the long term. Understanding how financial reporting and cash flow are used in determining success or failure of a business is essential. By evaluating strategic cost management, inventory control, pricing and product mix analysis, and cash management and having a way by which these aspects of business finance can be tracked, you can better anticipate and plan for your business's harder financial times.

    Tracking business finance should be one of the most important aspects of small business management. There is no way to know if your product is priced too high, too low, if you are re-paying your loans or falling further into debt or if you are even achieving your goals as a business owner if you are not tracking your business finances. Many small business owners neglect the importance of tracking business finance because they have not had formal training in accounting and other business mathematical fields of study. The truth of the matter is that you need not have a degree in business finance to find the means by which you can track the cash flow in and out of your company. In fact, there are hundreds, if not thousands, of software developers out there whose job it is to design financial management software specifically tailored to the needs of your business. All that you need to do is to meet with these software specialists and create a business finance management program that is right for your situation.

    Tracking business finance reaches beyond what some people would consider the business end of a company. In other words, tracking a business's finances is more involved than just crunching numbers and coming up with financial projections. Sometimes you need to track other areas of a business in order to get the whole picture when it comes to the health of your company's financial branch. Tracking business finance involves such things as analyzing financial statements and planning not only for the future of the business itself, but also for the financial structure of the business. In your business finance tracking you will also want to forecast budgets and consider the costs of going global. Even if your goals of expansion are modest, you will need to track how your business is growing and if it is meeting the goals that were set forth in the vision of the company. Tracking business finance stretches in its influence to include the company's leadership and vision. Business finances should be tracked as they are used in investing, organizing the company, used in sales and marketing, etc. Tracking and controlling costs is an important part of the process, but clearly numerical transactions are not always as apparent when tracking business finance.

    ]]>     Software Analysis Programs 2009-11-06T19:13:13Z 2009-11-06T19:10:00Z tag:businessknowledgesource.com,2009:/finance/6.28998 2009-11-06T19:10:00Z Having the proper accounting software in place for your business can be a very important thing for your business and can greatly improve your chances of successfully running a financially sound operation. Money is a constant in the business... DF don@greatresults.com Finance laptop30361256.jpg
    Having the proper accounting software in place for your business can be a very important thing for your business and can greatly improve your chances of successfully running a financially sound operation. Money is a constant in the business world and those who manage it the best and make the best decisions with money are those who continue to make it grow for their business. Here is some more about financial software analysis programs to help you keep an upper hand on your business finances.

    ]]> One of the most important rules of developing and running a successful business dictates that you have a very good understanding of how money works and flows in the business process. Having this understanding will help you to make the best financial decisions for your business and put you in a position to take advantage of the financial markets when possible. All large businesses have an accounting department and a team of people who are dedicated to making sure the business financials are working properly and will give the business the operating cash they need. Smaller businesses may have an accounting department or just one accountant who is responsible for the finances of the business. If you are just getting started, this person may be you, so having at least a basic working knowledge of proper accounting principles is very important to running your business well.

    If you don't already have some basic financial management skills, you should take a course from the local college if possible and learn anything you can about accounting. Don't be embarrassed that you don't understand the rules of accounting and financial management, but take the time to learn. This is very important and understanding how the finances work will help you to run your business better. But one thing that you don't have to do on your own is manage all the finances. There are many different programs out there to help you keep track of all the income and expenses of your business. Having a good financial analysis and management program can greatly improve your chances of success even if you only have a basic understanding of financials.

    There are many different analysis and tracking programs available and finding the right one for you will require some research and maybe even some trial and error. But once you find the right software program to help you with your finances, you will find that keeping track of them is much easier than you may have thought. Many people aren't sure how much money they should be willing to spend on a financial analysis software program. A good way to gauge how much money to spend is how much hiring or using a real person to do the job would be. This doesn't mean that you need to dedicate a year's salary to the program, but you'll want to get it and have enough resources left over to have someone double check everything in the program as well. Many programs offer this feature.

    It is important to do proper research about the software before you make the buying decision. You will need to be using it regularly, so having a user interface that is easy to understand for you is important. Many software companies will offer a trial version of their software to let you try it out before you make the purchase decision. When you are deciding what kind of software you need, be sure and think about what features you will actually use for your business and exclude those that you won't need. You should also look into something that will be able to expand as your needs do and accommodate your growing needs.

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