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When a Loan Is the Right Move for Your Business

Every business needs adequate funding to survive and grow. Ideally, your operations provide enough cash flow to handle all your funding needs. But for many a small business, cash flow isn’t always enough to satisfy the need for working capital. That’s when it’s time to consider a business loan. Let’s look at a few scenarios in which a business loan is the prudent decision.

Purchasing Equipment

Your business may require expensive or specialized equipment. In addition, you may already own equipment that no longer provides the performance you require. If you feel you are losing sales or profit margin because you lack the right equipment, you owe your business the opportunity to compete using the most appropriate gear. Sometimes, equipment manufacturers or commercial suppliers will offer financing, sometimes not. A business loan used to finance much-needed equipment is a terrific idea.

Expansion

Your product or service is selling like hotcakes, and you know you could grow the business by expanding operations and/or enlarging your selling floor. If you need more or better space, it’s going to cost money. For example, you might benefit by making leasehold improvements to your brick-and-mortar store. Or you might want to open additional stores or move from your current location to something larger and more upscale. You are looking at a number of one-time costs, which is the type of challenge that a business loan can solve. The extra profits you earn through expansion will help you accelerate your loan repayment.

Unexpected Opportunities

It really hurts when a rare opportunity comes your way but you don’t have the capital to take advantage of it. For example, one of your suppliers might have cash flow problems that causes it to offer you inventory at a sharply marked-down price. You need money to purchase the inventory, and perhaps to pay for additional storage space. You know that this will pay off handsomely, so you arrange a business loan to grab the deal before someone else gets it. That’s a smart move.

Fresh Talent

Perhaps you run the type of business where the caliber of your top employees is critical to your success. If you’ve been the typical owner, you’ve had to wear many hats to launch your business and keep it running. You and your staff are overworked, and you can’t afford anyone to burn out, including yourself. In other words, you need to recruit some fresh talent because you know it will increase your revenues and/or reduce your expenses. A business loan can help pay for incentives to hire the right employees. Remember, if you don’t hire the person, your competitor might.

Acquisitions

If you’ve been successful running your business, it’s possible you’ve taken some market share away from the competition. Or perhaps you’ve been eyeing an operating business that complements your own. In many circumstances, a business merger/acquisition is the right way to go. It makes sense to fund an acquisition with debt if it will lead to increased market penetration, greater geographic scope, obtaining key assets, or expanding your business to related markets. You’ll need funding not only to buy the target company, but also to make changes to your own operations to accommodate your revised environment. You may need to increase your marketing budget or add management talent. A business loan is completely justified under these circumstances.

Seasonality

If your business suffers from uneven cash flows due to seasonality, a business loan can provide cash to help you withstand slow business periods. You should be able to repay your loan once the busy season returns. For example, you might need to furlough some employees, but want to continue to offer them health insurance. Or you want to buy inventory during the slow season because it’s cheapest then. Use a business loan to smooth out the seasonal revenue ebbs and flows that would otherwise threaten your company’s survival.

Conclusion

There are many circumstances that justify a loan for your small business. What is never justified is settling for a slow, overpriced loan. IOU Financial offers fast loans with convenient repayment options that won’t disrupt your operations. Our loan rates are extremely competitive, and we can say yes when banks say no. Contact us today to discuss how we can help you fund your business quickly and efficiently.

7 Ways to Avoid Financial Stress When Running a Business

Running your own business requires careful thought and planning. But even with all that, it’s hard to avoid feeling financially stressed from time to time. Handling the stress productively can help your business succeed. But avoiding it in the first place can also make your job far more enjoyable. Here are seven ways to sidestep financial stress before it appears:

  1. Establish good accounting habits:

    You can avoid much financial stress by knowing your exact financial condition every day and tracking your cash flows against your budget. You should purchase either a good accounting system in-house, subscribe to an online accounting package, or hire an accounting service to do your books. You should stay on top of your accounting entries and generate reports frequently to see where you stand. Using this information, you can respond to upcoming cash crunches early and take actions, such as delayed spending, to reduce the problem.

  2. Invoice promptly:

    Always invoice immediately when providing a service or sending goods. Encourage prompt payment with terms like 2/10 net 30. That is, you’ll grant them a 2% discount if they pay in 10 days, but in any event, the full amount is due in 30 days. After sending out invoices, remember to follow up promptly. You can automate your email and SMS service to help you maintain contact with the people who owe you money.

  3. Adopt money-saving ideas:

    For example, consider renting equipment rather than buying it. This can avoid an enormous outlay of cash that you can instead deploy elsewhere. Also, renting equipment relieves you of repair costs should it break down. You can rent office space, or better yet, work from home if possible. If you have staff, see if they are interested in working remotely, as this too can save you (and them) money. Put on your thinking cap and we’re sure you’ll discover dozens of smart ways to spend less money.

  4. Keep it legal:

    One temptation some business owners succumb to when finances get tough is to cut corners and adopt shady practices. Besides being unethical, it will surely elevate your stress level rather than reduce it, and in the long run can lend you in hot water. Keep it honest, and whether you succeed or fail, you’ll know you did so legitimately.

  5. Use an LLC:

    A limited liability company can reduce stress by protecting your personal assets from your business creditors. If you run a sole proprietorship, a creditor or legal opponent can sue you in court and if they win, seize your home, car and other assets to collect the money due them. An LLC shields you from personal liability for your business debts without having to set up a corporation.

  6. Do your own marketing:

    It’s become much easier to manage our own public relations, thanks to the internet and social media. You have the opportunity to effectively engage with people on a personal basis. Social media accounts are free, and you can do online advertising in any amount that is comfortable. Build up your website with good content to improve your position in web searches. Learn the ways of the SEO masters to help build website traffic, increase prospects and convert them to customers.

  7. Use debt wisely:

    Cash flows in a small business are often uneven. This is compounded by any seasonal aspects to your business. The wise use of debt can mitigate these problems by providing injections of cash when you need it. Moreover, a short-term loan can let you take advantage of opportunities that pop up from time to time. For example, you might have a supplier who offers you a great deal on inventory. A loan could allow you to buy up the extra inventory and then use the increased profits to easily repay the loan.

Conclusion

The key to reducing financial stress is to spend less, earn more, husband your cash and rely on credit when you need it. If you are interested in a low cost, convenient business loan, contact us at IOU Financial — we’d love to hear from you.

4 Things Small Businesses Must Include in Their Budgets

Budgeting is to business as oxygen is to life: Without it, you die. The reason budgeting is vital to the health of a small business is that it is your GPS device for telling you where you are supposed to go and where you are actually heading. You use the budget to track business expenses, cash on hand, revenue needed and received, and other items to know whether your business is succeeding. The differences between your projected and actual budget numbers are your early warning system when things start to go wrong — or your confirmation that you are on the right track. Those differences are also a call to address problems by changing what you are doing.

Bottom line, your budget tells you how much money you have, how much you must earn and how much money you will have to spend. Importantly, it also tells you how much you might need to borrow to plug any cash shortfalls and to finance your growth. To know these things, you should include in your budget the items listed below.

Required Budget Items

Your budget might have dozens of line items, but they can all be organized into four groups of items that every budget must track: Sales, costs, profits and cash flows.

Sales and Other Revenues

These figures are the foundation of your budget. You can’t spend money unless you make it, and you don’t want to overestimate how much you’ll make by donning rose-colored glasses. Your estimates should be conservative but realistic — if they turn out to be too conservative, well, that’s a good thing. On the other hand, bloated estimates could leave your business floating belly up.

Estimating your revenues is hardest if you are just starting up your business, because you don’t have any prior-year data. That’s why you did extensive research by talking to other owners in your same field, undertaking market research, and relying on your knowledge from previous jobs.

Be sure to include, if appropriate, estimates for sales allowances and returns, which you subtract from gross sales to calculate net sales.

Total Costs and Expenses

To make money, you must spend money– those are your costs and expenses. You should categorize your costs by type:

  1. Fixed costs: These are costs that remain the same independent of your sales numbers. They include rent, insurance, property taxes, leased furniture and so forth. While these costs are called fixed, they are not carved in granite. “Fixed” just means that it will take a while (up to a year and maybe longer) to change these costs.
  2. Variable costs: These are costs that vary directly with sales volume. They include the costs of merchandise, raw materials, labor, utilities, freight, inventory and alike.
  3. Semi-variable costs: These are costs that can slowly vary with the volume of business. For instance, they include the costs of salaries, marketing, communications and various elements of overhead.

Profits

Profits, or net income, are revenues minus all expenses. Ultimately, your business won’t succeed unless it can generate profits. Your budget should include estimated  interest and income tax expenses when projecting profits. If your budget tells you that it will take years before you might begin making profits, you should re-evaluate your business model and see if you can operate until the profits begin rolling in.

Projected Cash Flows

Lack of profits can slowly poison your business. Lack of cash can stab it in the heart. Your cash flows revolve around collections and disbursements. The timing of both will reveal whether your cash inflows and outflows align. To some extent, you can try to accelerate collections and delay disbursements when revenues fall short or unexpected expenses arise. Your budget will indicate when you might have to inject more cash into your business, either by contributing additional capital or taking out a loan. If the latter is required, contact us at IOU Financial for a quick working capital loan on easy terms and convenient daily repayments.

Budget Templates

You don’t have to build your budget from scratch. We recommend our Business Budget Smart Sheet, which will help you analyze your spending patterns, streamline areas of overspending, gauge the cash flow impact of fixed and variable costs, and much more.

Streamlining Your Bookkeeping Process: Tools for Small Business

Whether you’ve been running your small business for years or are just opening up shop, efficient operations are the key to business success. When it comes to bookkeeping, it’s vital you run a smooth operation that gives you timely, reliable results. Bookkeeping tasks includes setting up accounts, entering transaction data, generating reports and preparing tax returns. It is the key part of your accounting system, including invoicing, bill payment, banking, inventory management and payroll. We’ve assembled here a short prescription for streamlining your bookkeeping process and have included a list of bookkeeping tools to boost your efficiency.

Five Keys to Efficient Bookkeeping

Even minor improvements can have a major impact on your business’ efficiency. Here are five:

  1. Establish or review your system:

    If you are just now organizing your business, you will need to have a detailed bookkeeping system in place from the very start. It starts with basic tasks, such as entering your receivables and payables as soon as you can — don’t let invoices or checks pile up on a desk, as it’s all too easy for something to fall through the cracks. Review your chart of accounts to ensure its properly set up and capturing all the information you need. Establish training materials in case you change bookkeepers, as this will save much time should the need arise.

  2. Maintain your pace:

    As we just touched upon, you should never fall behind on your bookkeeping. Even a delay of a few days can snowball into bigger problems. Errors often occur when you have to play catch-up. For example, your inventory system might fail to reflect orders placed if you haven’t yet entered the data into the system. It’s wise to have at least one “backup” bookkeeper who can step in when the primary one is away.

  3. Contract with a CPA:

    You probably don’t need a full-time CPA on staff, but that shouldn’t stop you from hiring one as a part-time consultant. CPAs can ensure your books are being kept correctly. You’ll probably have the CPA prepare your tax returns and answer any questions that come up. And in a pinch, your CPA can temporarily maintain your books if you need to find a new bookkeeper.

  4. Keep receipts:

    It’s such a cliché, but nonetheless true. If you don’t keep, organize, and record your receipts, your business will likely slow down as you search for purchase information from weeks or months before. Consider digitizing each receipt, and in any event, set up a filing system that ensures you can find a receipt when you need it.

  5. Use the best tools:

    It goes without saying that, in 2019, very few businesses are run using a paper-based accounting system. Since everyone automates, it makes sense to choose the systems and tools that have impressed the experts and other users. Don’t worry, you don’t have to pay thousands to get a basic accounting package. In fact, some good ones are free! Keep reading to see some expert recommendations.

Tools for Efficient Bookkeeping

The most valuable business tool is your accounting system. If you are a small company, consider getting a modular system with separate packages for basic bookkeeping, invoicing, inventory, payroll and so forth. Here are some noteworthy systems to consider:

  1. Wave:

    This is a top-rated free accounting system with more than 1.5 million users around the world. It’s a cloud-based system accessible anywhere you can establish an internet connection. It has impressive functionality, including invoicing, receipt management and banking. The only cost is a processing fee for online payments.

  2. Sage Accounting:

    Perfect for self-employed business owners who need a simple system that can be upgraded as your business grows. Prices start as low as $10/month.

  3. FreshBooks:

    A powerful accounting system that integrates most accounting features and interfaces with popular CRM and customer service apps. Prices start at $19.95 per month.

  4. Others:

    Many other accounting systems also perform well, including QuickBooks Online, Xero, Sage 300 Cloud and Sighted. If you need a payroll package, consider WagePoint, Gusto and SurePayroll. For tracking time and expenses, look at TSheets, Expensify and Neat.

Take the time to get your bookkeeping right from the start and you’ll save countless hours on error correction and rework. Your business will save money and you’ll have one less thing to worry about.

Printing Marketing Collateral on a Budget: Tips, Tricks & More

You own a small business and you need printed marketing collateral. You have some great ideas for your business cards, flyers, brochures, and other materials, but there is just one problem: You are working with a very limited budget. Many business owners have faced this dilemma, so you certainly are not alone. The good news? You don’t have to have a million-dollar budget to create printed marketing materials that are both eye-catching and effective.

Whether you are a restaurant owner in need of new menus, a boutique owner in need of new signs for your displays, or a photographer in need of new postcards for your direct mail marketing campaign, you can save yourself a lot of money on the materials you need by printing them yourself.

Today’s printers—even many of the budget-friendly models—are capable of producing an impressive output. Whether you are working with a top-of-the-line laser printer or you have a simple desktop inkjet printer, you can make your own marketing materials at a fraction of the cost of hiring a pro. Here are a few tips and tricks for printing your own marketing collateral on a budget.

Keep It Simple

When you plan on printing your own marketing materials, it is best to keep them simple. This is especially true when you are designing your own materials without past design experience. If you use too many fonts, colors, or images, you risk creating collateral that is confusing or has a negative impact on your marketing strategy.

Keeping your design simple is the best way to ensure that your marketing collateral will look great and convey a clear message. If you are not confident in your ability to create an eye-catching design, there are plenty of affordable graphic designers on sites like Fiverr. Hiring a freelancer who is just starting out is a great way to get an amazing logo or a design for your marketing materials without spending a fortune.

Use the Right Paper

There are several different types of paper, and it is important to choose something that is well-suited to your project. You should also purchase high-quality paper stock to ensure that your collateral both looks and feels good. The quality of the paper you choose can create a lasting impression. The higher the quality, the better the impression you will make. If you use low-quality paper, you could create a negative perception of your brand, and that is the last thing you want your marketing materials to do.

Buy the Right Printer

The printer you use is just as important as the paper you are printing on if not more important. While you probably already have a printer, it may not be the best one for printing your own marketing collateral. Even if you are working with an extremely limited budget, purchasing a good printer is a worthwhile investment. Keep in mind that some printers do a great job of printing high-resolution photographs and graphics while others are perfect for producing text documents. Think carefully about what your marketing collateral looks like and what you need your printer to do.

For most businesses, an inkjet printer is a must-have when printing marketing collateral. They do a much better job of printing in color than laser printers, and they require a much smaller upfront investment. You may want to consider choosing a printer that uses pigment-based ink rather than dye-based ink. While cheaper, dye-based ink tends to fade faster, so it is not the best choice for creating marketing materials that last. Canon inkjet printers offer exceptional quality at reasonable prices.

Use the Right Ink

Purchasing ink that is designed to fit in your printer is, of course, vital. You may not have realized, though, that there are different types of ink that are intended for different projects. When you are printing marketing materials, your primary goal should be ensuring that each piece comes out looking crisp and perfect. To achieve this goal, you need to use the right ink. For starters, use OEM ink cartridges or remanufactured ink cartridges from a reputable manufacturer. Compatible ink cartridges are often acceptable, too, but you need to be careful when purchasing them. Read reviews and make sure the ones you purchase are sold by a third-party company that you can trust.

Adjust Your Printer Settings

Most printers have several settings that can be adjusted to ensure the best possible quality. Many devices allow you to quickly select between low-quality and high-quality output. While this is a good place to start, there are other settings that you need to pay attention to.

Select the type of paper you are using. This enables your printer to create the best quality output whether you are using plain printer paper, glossy paper, matte paper, etc. Also, select the correct size for the paper you are using. By doing this, you are ensuring that your printer can properly scale your design to fit on the paper you are using.

Do Test Prints

Before you set your printer to print a few hundred flyers, postcards, or any other type of marketing material, be sure to do a test print. While your design may look great on your computer screen, it may look totally different when your printer spits it out. Doing a test print provides an opportunity to find and correct any issues prior to running an entire stack of high-quality paper through your printer and wasting it. When you are working on a limited budget, the last thing you want to do is waste your materials.

Conclusion

Printing your own marketing collateral is a good way to save yourself a bundle and, thanks to the quality of today’s printers, it’s a project that anyone can tackle. With the right ink, printer, and paper, you can create business cards, postcards, flyers, brochures, and other materials that rival the quality of professionally printed documents at a fraction of the cost.

Guest Post: About the Author

Tania Longeau serves as the Head of Services for InkJet Superstore. Tania oversees a team of Operations and Customer Service Reps from the Los Angeles headquarters. Before joining InkJet Superstore, Tania was a team leader and supervisor working for one of the biggest mortgage and real estate companies in the country. She is a happily married mother of one who enjoys spending time with her family and reading in her leisure hours.

Seasonal Business? How to Prep for Your Slow Times

Seasonality is both a blessing and a curse for a small business. The blessing is that you have a great opportunity to capture the bulk of your annual revenues during the busy times. However, the prospect of one or more slack months in which revenue is punk but bills still have to be paid can truly seem like a curse. The saving grace is that seasonality is, by definition, predictable, which gives you a chance to prepare for the slow months. Here are some tips to shepherd your business through the lean times:

Understand your fixed and variable costs:

Naturally, you’ll need to cover your fixed costs, although it might be possible to postpone some of them. Variable costs seldom go to zero during slow seasons, but you do have the opportunity to slash them significantly. Adjust your monthly budget to reflect your reduced spending. If you find your cash won’t cover your expenses, contact IOU Financial for a quick business loan, often is as little as 48 hours. Our loans are easy to pay back without putting an undue strain on your cash flow. Because these loans are short-term, your total interest costs are tightly constrained.

Conserve your cash:

Build up your cash reserves during the busy season so that you can enter the slow months with a cushion. Once the slack season begins, execute your budget imperatives, including labor reductions and furloughs. A good strategy for seasonal businesses is to maintain only a minimal employee count and fill with hourly temps during the busy seasons. You can postpone inventory purchases until the end of the slow months and consider factoring your accounts receivable to speed up cash collections.

See the world:

Your vacation schedule will no doubt coincide with your slow season. This is especially feasible for mom-and-pop businesses. If you own an ice-cream store in Maine, then it makes sense to shutter the store during the winter and head off to warm climes. Your variable costs will be reduced to the greatest extent with this strategy.

Renegotiate with your suppliers:

Speak to your suppliers about your seasonal requirements and work out better credit terms during the slow period. For example, if your normal terms are 2/10 net 30, see about extending the payment due date to 60 or 90 days. If you’ve been a good customer, your suppliers will be more likely to accommodate your request. After all, suppliers want you to succeed, and it makes no sense for them to force you out of business and thereby lose a customer.

Adjust your marketing plans:

If you don’t have the ability to shut your business during the slow season, try bringing in more customers through sales events and promotions. You can program special events like raffles, classes, and bonus loyalty points for the slack periods.

Shore up your social media footprint:

If you have extra time during the slow period, put it to good use by increasing your social presence. Exploit your accounts on Facebook and Twitter to push out information about your special promotions. Start up or re-engage a newsletter and/or email campaign with useful and timely content that elicits readership.

IOU Financial provides affordable small business loans of up to $300,000, funded in as little as 48 hours. You won’t ever be charged upfront fees, and fixed daily or weekly repayments rids you of large, scary monthly payments. If seasonality is your business’ problem, then IOU Financial is your solution. Contact us today to learn more about how we can get you through the slow season in good shape.

3 Ways to be Smart about Business Expenses as a New Business Owner

New business owners become overwhelmed by expenses, taxes, and financial issues in a short time. With so much to do and manage, it is challenging to keep tabs on expenses. But, if you want to stay in business, you must keep your spending in check, stay on top of your tax responsibilities, and prioritize tasks and expenses. Our tips will show you how to do it all.

  1. Hire a Financial Advisor Specializing in Small Businesses

It seems strange to emphasize keeping expenses in check and then suggest hiring a financial advisor, but it is the best way for you to comply with tax laws, make smart purchases and investments, and protect your assets as your business grows. Your best move is to choose a financial advisor who has ample experience in assisting small businesses and who understands the ever-changing tax laws.

If you work from home, you especially need a financial advisor to help you determine whether claiming your home office is the best way to proceed with your taxes. It also is more challenging for small business owners who work from home to keep their personal and business expenses separate, and a financial advisor will ensure you do things by the book to avoid penalties or fees. Your financial advisor also will help you find areas to save costs and prevent you from using too much of your personal money to grow your business.

  1. Create a Budget… and Stick to It

Your financial advisor also will help you create a budget for your small business or your home office. It is critical that you stick to your budget because you don’t want to stretch your new business too thin in the early stages.

In fact, the Bureau of Labor Statistics reports that about 80% of businesses with employees survive their first year in business, 66% survive their second year, and about 50% will survive their fifth year. However, only about 30% survive their tenth year. Why do so many small businesses fail? For many of them, the answer is lack of sufficient capital and cash flow problems. One study shows that 82% of businesses fail due to cashflow problems.

The lessons new business owners must learn are that they need to manage their expenses wisely, and they need to have enough capital to grow. The solution to these common issues is to prioritize your needs by creating and sticking to a budget.

If working from home is the best way to start your business, do so to save overhead costs. You’d be surprised by how much you can accomplish with the perfect workspace in your home and the right technology. You’ll likely be able to get off the ground with reliable, high-speed internet, a laptop or tablet, and a reliable printer and phone. There are even online payment systems that allow remote business owners to receive one-time or recurringclient payments from the comforts of a home office. Reliability and convenience are much more important than spending too much for the latest technology, phones, or gadgets.

  1. Make Priorities

As a new business owner, the bulk of the work will fall to you. Because your time is money when you’re in charge, you need to be as productive as possible and make time for yourself and your family. That may be easier said than done if you work from home, so set your hours based on when you are most productive and make time for your family to strike a work-life balance. The perk of working from home is setting your schedule, so do so wisely.

You’ll also need to prioritize your workday tasks. While answering emails is an important part of your role as a new business owner, other tasks will suffer if you spend too much time checking your inbox and replying to emails that are not urgent.

To spend less time on email, set up an automatic response and take advantage of canned responses. You’ll still respond to customers promptly, but you’ll also be more productive if you schedule time for email throughout your day. It’s also important to prioritize record keeping for tax purposes and to create a system for filing receipts and other documents that will support your business expense claims each quarter.

New business owners succeed when they make smart decisions about expenses. Make it easier on yourself by hiring a financial advisor specializing in small business, creating and sticking to a budget, and making priorities.

Guest post: About the Author

Ms. Fisher has spent more than 20 years as a CPA, and is currently working on a book about financial literacy (due out in 2018). She also runs Financiallywell.info.

Money Habits for Business Owners to Employ in the New Year

2018 should be an exciting year for small businesses, with lower taxes and a bubbling economy. This is no time to take your eye off the ball – you must continue to pay attention to your money habits if you want your business to do its best. Here are seven tips to help strengthen your business financials:

Set your financial goals:

You should have short-term objectives and long-term goals that will keep you motivated every day. Your goals should be timely, realistic, measurable, attainable and specific. That means you should have a plan, preferably written-out, on how you’ll achieve your goals. Prioritize these plans and then track your progress against them, using a spreadsheet or word document.

Set annual and monthly budgets:

Include assets, liabilities, income, expenses and equity. Use the IOU Financial Business Budget Smart Sheet as your starting point. Pick out areas where you want to save money, and periods of seasonal challenges that might require an infusion of working capital. We at IOU Financial can help arrange quick financing when you need it, with easy payback terms, so keep us in mind when you lay out your monthly budgets. Track your actuals against your projections and try to keep it real.

Know your cash flows:

You might need to send money out, in the form of payments to employees, contractors, suppliers, taxes, etc., before the money comes in from customers. That’s why you need a daily rundown of cash flows and have sufficient reserves when revenues are late or debts go bad. That’s another reason to establish a relationship with IOU Financial. Lack of liquidity kills businesses, so stay on top of your cash flows and recognize potential early.

Spend to grow:

Managing your money doesn’t mean you have to be a tightwad. You should spend some of your profits to grow and strengthen your company. Send key employees for training, improve your equipment and facilities, hire marketing professionals and attend business events. The up-front costs will more than repay themselves with new opportunities.

Need vs want:

Owners like to dream about all the things they want to do to make the business bigger and better. Never give up on your dreams, but always address your needs first. You might have to sacrifice the ideal for now in order to attain it later. This will reduce your risk of unplanned spending for things you don’t really need now, freeing up capital for later use.

Use debt wisely:

Debt is a tool, to be used wisely when needed and to be paid off when feasible. Look upon the interest you pay as another cost of doing business, one that allows you to meet your obligations and keep the doors open. When you take out a business loan, come to a lender like IOU Financial that will get you the money quickly without a lot of paperwork. We offer a unique daily repayment method so that you never are faced with a mountainous monthly payment, and you can refinance with us after you repay 40 percent. Always insist on affordable rates, no upfront fees and no prepayment penalties – that’s how we operate and so should you.

Protect your income:

Consider disability insurance that will keep the money coming in if something untoward happens to you. Business owners typically don’t get paid sick leave or worker’s comp, so they need a way to protect against the unforeseen. Disability insurance can help you overcome a temporary disability that would otherwise torpedo your business.

Remember, IOU Financial is here to help you when you need money fast. Add us to your speed-dial list for 2018 (1-866-217-8564) and worry a little less about the future.

Tips for Creating Next Year’s Budget

The new year brings opportunities to make your small business more successful. There’s no better place to start than with your annual budget. It encapsulates your revenue and expense expectations in a single spreadsheet. Here are some handy tips for creating your new budget:

Analyze last year’s budget:

How closely did your estimates match actual experience? You probably under- or over-estimated at least some of your cash flows. Learn from your mistakes to set your numbers more realistically, wishful thinking aside. If your data shows a trend throughout the year, incorporate it into the new budget. Some numbers are harder to estimate – if you have a lot of these, try doing a best-, worst- and average-case version of the budget.

Break it up:

You should break down your annual numbers into monthly ones. This gives you the ability to incorporate seasonal differences that more closely match your cash flows. It also lets you apply actuals and revise numbers based on experience.

Budget in a cash cushion:

A good budget will incorporate a cash cushion to help you survive sudden crunches. Near-cash securities such as T-Bills are a fine place to stash the extra cash. Even if it’s an unusual year that doesn’t see unpleasant surprises, extra cash will certainly come in handy sooner or later.

Seek help:

Do you find setting up and working a budget confusing? Don’t fumble through it. There are many resources available to you to assist. We recommend our Business Budget Smart Sheet, which will help you analyze your spending patterns, streamline areas of overspending, gauge the cash flow impact of fixed and variable costs, and much more. If you need more help, speak with your accountant or tax specialist.

Make adjustments:

Are you selling more units each month and losing money on each sale? Bite the bullet and raise your prices (and slash your expenses). Calculate your new revenues based on higher prices and incorporate into your budget. Do the same when you reduce expenses. For example, you might find it cheaper to subcontract out some of the work that you currently do in-house. Your budget should reflect your best ideas for making a profit.

Create recession contingency budget:

At the time of writing, the U.S. is enjoying a growing economy. What would happen to your business if we suddenly fell into a recession? It will happen sooner or later, and you’d best be prepared by creating a recession budget as a contingency. The recession budget is based on conserving cash in the face of lower demand for your product or service.

Remember, budgets are planning tools, not straightjackets. Remain flexible, and you can always turn to IOU Financial if you find yourself short of cash despite your best planning.

 

Best Apps to Use to Better Manage Your Business Finances

Whatever small business you run, there is a core set of financial and related functions that just about every business must perform. In 2017, that means choosing apps that meet your requirements and are easy to use on your computer and smartphone without breaking the bank. Here are some of the top apps that fit the bill:

1. QuickBooks:

From tiny to midsize, your company needs a program like Quicken to manage its books and records. This is an easy to use accounting package with cash management capabilities. You can manage invoices, expenditures and revenue, generate financial statements, pay bills and salaries, and track your bank/credit card accounts. QuickBooks works with Square and PayPal, and lets you mark the tax status of transaction to facilitate. It’s a snap to set up recurring payment notifications, as is autopay and financial reminders, that automatically update your bank account balances. You can also set up alerts if your bank account is running low. Runners up: Wave and FreshBooks.

2. TurboTax:

From the makers of QuickBooks, TurboTax is an electronic tax preparer at an insanely low price compared to hiring a bookkeeper or tax accountant. Filing taxes couldn’t be simpler, even if you have complex transactions. When teamed up with QuickBooks, your company’s tax returns basically generate themselves. Runners up: Tax Act, H&R Block, TaxSlayer.

3. PayPal:

The granddaddy of payment systems, PayPal links to your credit cards, debit cards and bank accounts to move money around and make payments hassle-free. You can use PayPal in conjunction with a card-reading device to create a portable point-of-sales terminal for online checkout. PayPal charges 2.7 percent per card read (swipe or insert), 2.9 percent plus $0.30 for online invoicing and payments, and 3.5 percent plus $0.15 for sales entered manually. You can get standard merchant services for free, but the professional plan, at $30/month, adds features and flexibility.

4. Square:

A great alternative or adjunct to PayPal, Square is a convenient mobile card reading device and payment service that is a favorite among street vendors, food trucks, and farmers’ markets. It works just as well at your retail shop or beauty salon. Simply attach the Square reader to your phone or tablet and you have your own point-of-sale terminal. Square charges 2.75 percent for each card read. For a one-time charge of $49, you can add contactless collections via mobile wallets (like Apple Pay and Google Pay). The cost for a manually entered transaction is 3.5 percent plus $0.15. The app is free.

5. Skype:

You don’t need fancy equipment to have a video conversation or conference with Skype. You can also share files and text messages conveniently. Skype helps with your finances by allowing you to hold meetings with anyone, anywhere, without having to spend money on travel or fancy conference rooms. You can get basic Skype for free or spend as little $5/month for Skype for Business, and you can integrate Skype to run Microsoft Office for word processing, spreadsheet generation, and slick presentations. Runners up: Pushover for message distribution; Slack for instant messaging; Fuze for videoconferencing; and Addappt for remote control of calendars and address books.

6. Tripit:

If you are a businessperson on the go, Tripit lets you consolidate your travel plans into a single itinerary accessible from any device. All you have to do is forward your travel-related emails to Tripit and it takes care of the rest. Who needs a travel department anyway? Alternative: Expensify lets you track your business travel expenses and place them on your expense report. You can also photograph your receipts and let Expensify extract the expenses automagically. It costs $9 a month for each corporate user.

7. MailChimp:

Control you email advertising campaigns with MailChimp in a very cost-effective way. You can create mailing lists, newsletters, response emails and reports that track how recipients react to your emails. These reports can help you craft more effective email strategies and improve marketing performance while saving a lot of money.