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10 Innovative Ways Your Business Can Save Money

Business owners are always trying to maximize profits and save wherever they can to ensure success. Here are some of our favorite creative ways to save some cash:

Website:

Build your own website. Many small businesses spend a ton on having a website built and maintained. Guess what? You can do it yourself using website builder software. Check out the offerings from Wix, Squarespace, GoDaddy and others. You’d be surprised at the sophisticate product you can turn out at a fraction of the cost.

Advertising:

Ads can get expensive. Consider enlisting other small businesses to participate in communal advertising, in which you share suppliers, mailing lists and distribution channels. It’s best to work with other companies having a solid reputation and offering complementary products or services.

Spread the word:

Community events are terrific venues to show off your expertise in your given industry. You’ll get free exposure for your business and yourself. You never know, it might lead to paid speaking gigs!

Convert living space:

Commercial offices are so 2010! The IRS has made it easier to declare part of your home as your office and earn valuable tax deductions. Renting office space is expensive, and for many businesses, unnecessary. This is especially true if your business involves e-commerce, where customers will never see your workplace.

Think used:

If you do need office equipment and furnishings, think used! You can get used desks, chairs, filing cabinets and so forth for a fraction of their costs when new. Remember, shiny new furniture is no match for a healthy bank account.

Use freelancers:

It’s cheaper to use freelancers when needed, because you don’t have to pay employees who might sometimes be idle, and you don’t have to worry about the costs of payroll, withholding, benefits, profit-sharing, etc. In addition, using an experienced freelancer saves you the cost of onboarding and training an employee.

Barter:

You might offer something that can be bartered, allowing you to obtain products and services without spending cash. For example, if you’re a freelance CPA, you might obtain legal work from a lawyer client in exchange for tax preparation work.

Borrow wisely:

Entrepreneurs often waste time applying for bank loans only to find out a month later that they’ve been turned down. Sure, bank loans offer good interest rates, but only to the most credit-worthy clients and only after taking a month to make a loan decision. If you’re in a fast-moving business, you can’t afford to waste a month on a business opportunity that might evaporate in a week. When you borrow from IOU Financial, you’ll get your money in a day or two, putting you in a position to open the door when opportunity knocks.

Demand discounts:

Has it occurred to you to demand discounts from your regular suppliers? You’ve given them your business, now they can provide you with a thank-you by offering a discount on future orders. You just might find them very flexible when you hint at taking your business elsewhere.

Don’t buy, rent:

Do you occasionally need heavy equipment, vehicles and other items available from your local rental store? By renting, you avoid large capital outlays and money spent on equipment maintenance and repair. Rental expenses can be deducted when they are incurred, whereas equipment purchases may take years to depreciate. Renting makes a lot of sense for a variety of small businesses.

f you have tried all of these strategies, but are still finding it difficult to sustain your business during the holiday time, turn to IOU Financial. We make it a priority to support small and medium-sized companies with easy loans up to $300,000. You can get funded in as little as 24-48 hours.

How to Tell if It’s Time to See a Financial Advisor for My Business

An American College survey of business owners found that 60 percent of respondents have not met with a financial advisor, and few had developed contingency plans for future events that could affect their businesses. A financial advisor has the expertise and experience to help you maximize the effectiveness of your capital investment in your business, and meeting with one can be quite beneficial.

While it’s a good idea to use a financial advisor from the beginning, you might have put it off. Here are five ways to tell that now is the time to see a business financial advisor:

Cash flow problem:

A financial advisor can help when you suddenly find your business facing an unexpected cash crunch. The advisor will help you work out your options for plugging the cash gap in the short run and preventing it in the future. One alternative is to acquire a working capital loan, such as the ones we provide at IOU Financial. Short-term loans provide the liquidity you need to continue operations, and the cost is quite modest compared to the consequences of not paying your bills on time.

Buildup of owner’s equity:

Good news can also trigger the need for a business advisor. One happy scenario is that your business is doing better than expected and your owner’s equity account is growing must larger than anticipated. You’ll want to speak to an advisor to see how to put that extra cash to work in a tax-friendly way. Sure, you could simply withdraw it, but that will create a personal tax liability. An advisor can help you look at different alternatives to grow your business, such as extending your geographical reach or expanding/enriching your product mix. You might want to hire additional employees or move to a better location – these alternatives require careful planning that a business advisor can provide.

Sudden opportunity:

Sometimes, opportunity knocks and you’re not quite ready. For example, a key competitor might approach you with an offer to let you buy it out. Or a sudden deal becomes available that would let you significantly increase your inventory at a highly-discounted cost. A financial advisor can help you work out how to take advantage of the opportunity in the most efficient way. Once again, a short-term loan might be the answer. IOU Financial can lend you up to $300,000 to grow your business at an affordable cost. Opportunities don’t come along that often. Be prepared to seize them, and to do so in the most efficient manner.

Thinking about retirement:

A business financial advisor should be brought in well before your retirement date to help work out how to sell the business and how to best use the proceeds of the sale. For example, it would be nice to minimize the tax impact of a big payout. A financial advisor can show you alternatives like trusts, charitable contributions and tax-sheltered accounts. It might require you to restructure your company before you sell it in order to reap the best after-tax benefit from its sale.

You’re feeling overwhelmed:

Maybe you know your business more than you understand finance. As your company grows, you might find yourself paralyzed by financial ignorance. Hire a business financial advisor to break the logjam and get you moving in a positive direction. Don’t mismanage your success. Don’t be afraid to get help before your sweet business turns sour.

Overcoming Accounting Challenges for Small Business Owners

Becoming a business owner can be a dream come true, offering freedom and flexibility away from the rush and bluster of a traditional 9 to 5 work week. It can also be an extremely frightening proposition depending on where your expertise lies.

And for most people, their expertise is not in finances. Taxes, cash flow, and payroll deadlines can cause stress for many owners and make it difficult to understand where the business stands. For small businesses, these factors play an even larger role in the health of the business than larger enterprises. Starting a small business requires a certain amount of guidance and resources. There are several accounting challenges that will have serious and costly consequences if a business owner doesn’t fully understand their role.

Understanding Federal and State Labor Laws

Before they ever hire their first employee, a business owner needs to know their place with local and state governments. There are also standards that must be met that ensure payment standards, vacation and benefits for your employees, severance pay, payroll deductions and plenty more.

Any small business owner will face these, so it is crucial to understand your role, what you will be required to – and ethically should – provide employees, and what effect it will have on your budget. Ignorance will not save you from state and federal laws, so be sure to become familiar with what your responsibilities are. The United States’ Small Business Administration is a great place to begin learning your responsibilities on each level of government jurisdiction.

Complying with Reporting Deadlines

Issuing paychecks and paying payroll taxes is just half of the requirements in payroll accounting. There are federal and state requirements concerning the reporting of quarterly payroll taxes. There needs to be a clear understanding of which taxes are reported on specific reports and whether these taxes are at the state or federal level. The Internal Revenue Service does a good job of keeping these dates clear on their website.

If a business acts as a collection agent for sales or use tax, there are also laws requiring the remitting and reporting of these taxes. The local state tax department will be the best source for answering questions about deadline dates and methods of reporting.

Cash Flow Management

The ebbs and flows of cash management can be a headache for any accountant – and especially so for a small business owner. Staying on top of cash flow requires meticulous documentation, recording all receipts and disbursements regardless of size.

Banks are very good at keeping up with these things; it is their job, after all. When in doubt, record all the expenses and sales your business earns and consult with the bank that handles your accounts. Depending on the complexity of your business’ cash flow, it might even be worth consulting a financial advisor to properly plan goals and become more knowledgeable about your cash flow.

Meeting Payroll Deadlines

Paying employees on time must be a high priority of any business, large or small. There are federal and state laws that dictate when an employee must receive their pay, so cash flow management must set aside funds for payroll.

Along with the actual disbursement of paychecks, there are also crucial deadlines for remitting payroll taxes. These deadlines can be both on the federal and state level, so each category of taxes must be dealt with in a timely manner. Most payroll taxes require submission electronically; luckily, there are software systems – such as Sage Peachtree, Quickbooks, and more – available to automate this process for you as well as record your expenses.

Qualified Employees

Finally, you need employees who you can rely upon. That means planning a payroll budget that measures how much help you’ll need, what skills they’ll require, as well as a fair market assessment of what those skills are worth.

As a small business owner, it can be difficult to know what that fair market price for employment would be. Those metrics will rely on the market that you are in as well as the general value of those skills. A salary too low may experience much more turnover than you’d prefer as well. Fit Small Business lists several free tools that will allow you to fairly assess what a competitive salary in your field looks like.

A small business’ finances can be a difficult aspect of business to manage. But with proper documentation, automation, and research, you can tackle each of these issues and flourish as your own boss.

If you need help affording a payroll and/ or accounting system or require financial assistance to pay off your business taxes, turn to IOU Financial. Our hassle-free small business loans of up to $300,000 can be in your bank account in under 48 hours! Contact us today!

Guest post: Alex Briggs is a contributing writer for Rising Path Accounting.

3 Ways to Strengthen Your Business Credit Score

Similar to a high FICO score, it is important to have a strong business credit score. In order to qualify for loans or get approved for trade credit, you must prove that your company is a safe bet for investors, banks and private lenders.

A low business credit score signifies that your business carries a significant amount of risk to lend funds to, which will result in either a denial of a loan or unfavorable rates and terms based on the level of risk. Additionally, you can qualify for lower insurance rates with a higher credit score.

How is Your Business Credit Score Calculated?

Your business score is calculated by credit-reporting agencies that utilize an algorithm based on various factors. Although your score can fluctuate slightly depending on the agency and its scoring model, similar factors are taken into account when determining your score.

Your business’ creditworthiness is rated on a scale from 0 to 100 based on the accounts in your company’s name. It is important to note, however, that business lenders may consider your personal FICO scores in their decision-making process.

How to Strengthen Your Business Credit Score

In order to improve your business’ creditworthiness, you must strengthen your business credit score. There are three effective ways to do so, which include:

Monitor Your Credit Report

The first and most effective way of strengthening your credit score is regularly monitoring your credit report. No system is created perfectly, and errors are common between lenders and credit reporting agencies.

If you don’t monitor your credit report, you will not be aware of discrepancies that can significantly plummet your business credit score. Get in the habit of requesting annual credit reports from the three credit reporting agencies, Experian, TransUnion and Equifax, which will alert you to issues that you must address to improve your score.

Pay Bills on Time

It is no easy task to manage your personal and business expenses, which is why you may not have enough funds every month to pay all of your bills on time. There are sources that may advise you to lag behind on payments, later agreeing with collection agencies on repaying lower amounts just to settle your debts.

While this may benefit you in the short term, not paying your bills on time can significantly affect your business credit score. Not only will you be obligated to pay a late fee and possible interest on the outstanding balance, a payment that is over 30 days late will be reported to credit agencies, possibly lowering your business credit scores. One source states that “payment history information typically accounts for nearly 35 percent of your credit score, making it one of the single most important factors in calculating your score.“

Paying bills on time will boost your credit score; in fact, paying bills ahead of the due date will play an even bigger role in strengthening your score!

Raise Your Credit Limit

Your business credit score is calculated by factoring in your credit utilization ratio, which considers available credit in relation to debt. It is advisable to keep the ratio under 30% to have a high credit score.

Although you may not be able to limit the amount of debt your company has, you can improve the credit utilization ratio by increasing your credit limit. While many credit cards will do so automatically after a certain period of time, you can make proactive efforts by contacting lenders and requesting an increase in your credit limit to better your business credit score.

Increase your credit limit in order to raise your business credit score by securing a small business loan from IOU Financial! Contact us to inquire about a small business loan of up to $300,000 in just 24-48 hours!

Small Business Tips: Increasing Your Financial Literacy

Having a great idea and running with it is not enough to operate a successful business. A business owner must wear many hats when operating their company, but managing and understanding their finances doesn’t always come easily.

Relying on a business manager or an accountant is a beneficial way to verify that you are conducting your finances by the book, but many small business owners do not have the budgets to afford these specialists. In fact, “40 percent of small business owners say they are financially illiterate – yet 81 percent handle their business’ finances themselves,” according to an Intuit study as reported by one source.

Whether you will hire out or want to tackle your business finances yourself, it is necessary to have a basic understanding of your financial situation if you truly want to be in charge of your business. With a little effort, it is not difficult to increase your financial literacy with these tips:

Know What is Required to Run a Business

Bloomberg reported that 80 percent of businesses fail in the first 18 months, states a source. Much of that failure is due to the fact that business owners are not skilled in properly handling their finances. There is a lot of financial planning and management required to operate a company, such as “budget, accounting and taxes, calculating price points, and projecting revenues and success rates well into the future to ensure continued success.”

Some owners get into trouble because they don’t plan ahead, and don’t save for unexpected expenses, such as hiring additional staff,  surprise incidents that may arise, or the simple costs of doing business they may not have been aware of. Others don’t know payroll and tax rules, and receive heavy fines for paying late or not at all.

As a small business owner, it is imperative to understand all of the financial requirements to run a business!

If Borrowing Money, Do Your Research

It can be tempting to borrow money from a bank or an investor to start or grow your business, and this can help you get off the ground. Before you jump into the world of lenders,  take time to evaluate your own expenses and savings and calculate what you can afford, or if it would be possible to provide your own seed capital, a process called “bootstrapping.”

Although using your own funds can involve some risk, paying high interest rates can be harmful in the long run if your cashflow can’t afford it. If you do choose to borrow, make sure to compare the terms and interest rates that lenders and investors are offering, as well as research their credibility and history.

Learn Proper Financial Planning

Financial planning is essential to secure your company’s long-lasting success. Startups require substantial seed capital to cover expenses for the first few years. Few startups are profitable right away, as all the money is typically reinvested in business growth for hiring staff, marketing and inventory.

You must have a comprehensive understanding of your monthly expenses and profit. Small business owners who hire accountants typically cannot understand complicated accounting reports, so it would be advantageous to track expenses, profits and bank account balances themselves to stay on track, according to personal finance expert, Andrea Travillian. Truly understanding your monthly expenses will help you save for them rather than spend your profits as they come in, leaving you in a lurch when the time to pay bills comes around.

Save a portion of your monthly profits to pay for taxes; business owners who do not get in the habit of doing so can be pushed to declare bankruptcy when a significant amount is due from the IRS that they did not budget for.

If you need financial assistance to take a course to improve your financial literacy, hire a corporate accountant or pay business taxes, IOU Financial is ready to help! We provide small business loans of up to $300,000 in 24-48 hours!

What to Look for in a Financial Advisor

Considering that Americans have accumulated more debt now than ever before, working with a financial advisor can be a great decision in planning financial expenses. A financial advisor can help with putting together a budget to avoid overspending, choosing the right investment strategy or prepare for taxes that come with running a small family business.

There’s no reason to stay in the dark when it comes to money and getting the best results requires the right financial advisor. But how do you find the right financial advisor?

Do They Understand Your Needs?

There is no one-size-fits-all approach to finances. There are solid strategies that will benefit most people – for example, paying down debt is almost always a good choice. But every individual has their own financial goals and needs. A 45-year-old father of two will need very different financial advice than a 23-year-old single professional who just finished school.

Look for a financial advisor who demonstrates an understanding of your situation. That way, they can offer advice tailored to you.

Does Their Education, Expertise and Certifications Align with Your Own Goals?

Although financial advisors can cover a broad range of topics, if you’re looking for a specific type of financial advice, then you’ll want to look for an advisor whose qualifications match that area.

Maybe you’re trying to pay off student loan debt, getting your first mortgage or applying for a small business loan. These are all detail-heavy processes and you’ll get the best advice from a financial advisor who specializes in these processes. Evaluate the certifications a potential advisor has to see if they’re the right choice for your current and future goals.

Does Their Compensation Plan Incentivize Your Success?

You obviously pay for their service, but you might not be the only one paying a financial advisor.

There are many firms that offer their advisors product-based incentives; those advisors make a commission for selling the firm’s products to customers. Although this doesn’t necessarily make them bad financial advisors, it can create a conflict of interest and alter the advice they might suggest to you.

Don’t be afraid to ask a financial advisor about their compensation plan. Be careful with those that make money from sales; you’ll might end up wondering whether they’re recommending a product because it’s right for you or because it will make them money.

Can They Teach You?

Financial literacy is a gigantic problem for most Americans and very little is being done to solve the problem. What’s more troublesome is that the average person has more financial responsibilities than ever before. There are all kinds of ways borrow money including banks, credit unions and online lenders. It makes it easier than ever to accrue debt. Retirement no longer comes from pensions, Social Security may not be around in the future and people live longer than ever.

That makes it even more important to save money consistently and avoid debt. A financial advisor who can educate you on personal or business finances will help you save more and borrow less.

Do They Truly Seem to Care?

You don’t want your meetings with a financial advisor to feel like college lectures, but unfortunately, they often do. The advisor sees you as one of many clients, your money is just numbers added to a statement and they’ll simply go through the motions with you.

You might learn something from that type of advisor, but you’ll certainly have better results with an advisor who engages with you. Look for a financial advisor who inquiries about your current situation, your financial history, your goals and all the other important details about your life. When an advisor gets to know you as a human being, they can help you make the best financial decisions because they know your wants and needs in life.

There are plenty of excellent financial advisors out there and working with one could be the best decision you make to take control of your finances and improve your future. Be patient as you look for a financial advisor and keep those five questions in mind to ensure that the person you choose is the right fit and has your best interests at heart.

Guest post: Heather Lomax is a contributing writer from Financial Licensing Advisors. She regularly contributes articles to a variety of investment and finance blogs.

How to Build and Keep Your Business’ Good Credit Score

More than likely, you depended on your personal credit when you launched your small business. However, a growing business must tap higher amounts of capital, and a good business credit score will prove helpful in this regard.

Business Credit Score

Your business credit, also known as trade or commercial credit, is based on the likelihood that your enterprise will repay its debts. Like personal scores, your business credit score is calculated using several inputs, including your payment history, bankruptcies, collections and your credit utilization ratio – your outstanding credit balance divided by your available credit. In addition, your business credit score might include considerations about your company’s size and your industry. Keep in mind that your business credit report can be requested without your permission, and you’ll have to pay to get a copy of your business credit report.

Creating a Good Credit Score

It makes sense to establish your business credit score as soon as possible, because you don’t want to look desperate if you suddenly need credit. You’ll find many lenders require a company to operate for two years, although an IOU Financial loan needs only one year of history. If you’re operating, you should be building your business score. Here’s how to do it:

Obtain Federal Employer Identification Number:

This will help separate your business from your personal finances. You should also get a business checking account and a business phone number. For optimal protection of your personal assets, consider establishing your business as a limited liability company or a corporation.

Get a DUNS number:

Dun & Bradstreet is a corporate credit reporting agency that issues a universal identification number, the DUNS number, that is recognized around the globe. A DUNS number opens doors to some corporate and government contracts, as well as loans from the Small Business Administration. More to the point, D&B will create and track your business credit profile when you get a DUNS number, leading to an accurate credit score.

Establish credit accounts:

Obtain one or more business credit/debit/charge cards, including a gas card if your business has vehicles. Also, open credit accounts with your suppliers, including office supply stores.

Use your credit responsibly:

Pay your bills on time, and even ahead of schedule. Nothing helps your credit score like an unblemished repayment record. If money is tight, you can get a commercial loan and pay off your other debts. One of the biggest challenges a small business faces is making the monthly loan payment. IOU Financial has a better idea – daily or weekly automatic payments that you’ll barely notice.

Don’t be delinquent, renegotiate:

If you’re having trouble paying your credit accounts, don’t miss payments. Instead, reach out to your suppliers for looser terms. Many will agree rather than risk default.

Mind your credit utilization ratio:

A ratio below 20 percent is great. It means that you have the means to handle a sudden need for money without scrambling to obtain additional credit. It also indicates you are operating your business well. Make it a priority: Calculate your CRU and get it down below 20 percent.

Check your credit report:

Get an updated business credit report every three months and check for mistakes. One derogatory mistake can sink you credit score, so clean them up as soon as you identify them.

It’s wonderful to have a good credit score, but bear in mind that IOU Financial doesn’t require it to lend you money. If you’ve owned and operated your own business for at least a year, clear $100,000 in annual revenue, average a daily bank balance of at least $3,000, and make at least 10 bank deposits a month (for retail/e-tail companies), IOU Financial will do everything possible to approve your loan request, even if your credit score is less than good.

Why Your Accountant (CPA) or Capital Adviser Should Work with an Online Lender to Help your Business Access Capital

As a small business owner, you may have witnessed how much harder it has become for you to access capital in the form of small non-collateral loans. After your bank says no, you may be looking for help to identify a competitive and disciplined online business lender that you can get funding from.

The banks have completely exited the “lending small” space as regulation has made it unprofitable and has forced them to seek higher loan amounts they can underwrite for a profit.  The government response to the credit crisis, essentially Dodd-Frank, has tightened reserve requirements on banks and added new layers of regulation over U.S. financial firms.

For all the good that Dodd-Frank did to protect consumers, it also facilitated the demise of thousands of small banks. In 1984, the U.S. had 14,400 banks, but that number shrank to 5,083 by 2016. Most of the lost banks were small, and many had to merge with bigger competitors. The result is that it is harder for your small business to get modest loans of up to $300,000, because many banks nowadays focus on larger and more profitable business loans above $500,000 – high overhead costs tied to regulatory costs, limited human resources, make small loans unprofitable for most banks.

Despite, or rather because of, the retrenchment in conventional business lending since 2008, online business lenders have been trying to fill the void. And many CPAs and tax advisers should be able to help, and even be excited to save you time in looking for a small non-collateral loan that works for your small business.

 Think of it from their point of view:

  • The loan application and documentation burden imposed by conventional banks requires a fair amount of work. Financial statements, projections, multiple year tax returns, and the myriad other forms that banks require to underwrite a business loan can consume a lot of a CPA’s time and energy.
  • By contrast, your CPA or capital adviser can help you apply for an online loan quickly and with minimum effort. All that is really needed is a minimum of 3 months’ worth of your business bank statements (easily downloaded from most banks), most recent tax returns, a copy of your driver’s license and a voided check. None of the audited financials, or fancy business plans so precious to banks are needed by IOU Financial. If you mention to your accountant a need for short term working capital, all s/he has to screen for is monthly bank deposits of at least $10,000, an average daily bank account balance of $3,000, 10 or more deposits per month, and 80% ownership in the business with at least one year in operation.
  • Banks have high loan-rejection rates, due to constraints placed on them by regulations, unprofitable nature of smaller loans, timid loan committees and over-reliance on credit scores. Online business loans, like those offered by IOU Financial, sidestep these problems because they welcome smaller loans and value cash flows as much as credit scores. In other words, online lenders don’t waste your CPA’s or their clients’ time… your time.
  • Speaking of time, online lenders can approve a loan request in a few hours and fund the borrower within 24 hours. A CPA or capital adviser who is helping a business owner respond to rapidly shifting cash flows knows that waiting weeks for a bank to decide a loan is completely unresponsive to the business’ needs.
  • Bank loans don’t tend to be flexible, but your CPA knows that a small business relies on flexible funding to survive and prosper. IOU Financial allows a borrower to re-borrow once 40 percent of the original loan is repaid.
  • CPAs are paid, among other reasons, to keep a sharp eye on expenses. They are therefore gratified to learn that IOU Financial loans costs much less than merchant cash advances.
  • CPAs help owners manage cash flow so that the business never gets caught short. The fixed, daily or weekly, automatic repayments of IOU Financial loans means that cash outflow is spread equally over the month instead of accumulating into a large monthly payback that can weaken the business’ cash reserves. Budgeting is easier and impact upon inventory purchasing is minimal.
  • Your CPA can work with IOU Financial to ensure the request loan does not put unnecessary strain on the business cash-flow. Sometimes, borrowing less is a good idea as it gives time to the business owner to work through debt repayment and get used to the loan; your CPA and IOU Financial can work together to find the right loan for your business.

Unless owners have special skills and plenty of time on their hands to deal with fastidious bank loan procedures, a business’ accounting and tax prep are best left to professionals like CPAs. Don’t make them bill you for the extra hours it takes to get a bank loan. Save money through a business loan of up to $300,000 from IOU Financial.

Ask your CPA or Capital Adviser to give us a call and will be happy to answer questions and make sure our capital can help your business grow. Call Christophe Choquart at  678 809 6685 to discuss how an IOU Financial loan may be right for your business.

How to Budget for Your Business Despite Your Irregular Cash Flow

Uncertainty is the name of the game for many small businesses. You might not know how your orders will flow next month, whether demand for your product or service will change, or whether you’ll be hit by some unanticipated expense. Your business might be highly seasonal or might depend on external factors beyond your control. These contingencies can make for volatile cash flows that demand attention lest they deplete your working capital and possibly drive you out of business.

Budgeting for irregular cash flows is therefore a task at the heart of keeping your business alive and growing. Your suppliers will have only limited patience if you are forced to delay payments. The inability to purchase the planned amount of raw goods or inventory directly affects revenues, simply because you’ll have less product to sell. If you need to lay off workers and managers, you can expect a steep drop in morale and holes in your operations.

With stakes like these, it’s good to know that there are several steps you can take to smooth over irregular cash flows:

Prepare three budgets:

You’ll want to budget for the most likely scenario, but also for better-than-expected and worst-case ones. Unless you have reason for optimism, pay the most attention to the worst-case scenario and make sure you budget anticipates a drastic cut in sales or rise in expenses. Should events prove more benevolent, you’ll be fine. If things turn considerably worse than you choose to imagine, you might be more willing to pull the plug and cut your losses.

Line up sources of capital:

Establish business relationships with lenders. Don’t rely on banks, because they are famously fair-weather friends – when it rains, the bankers confiscate the umbrellas. Instead, work with a commercial lender that will stand by you through good times and bad. You will need a source of cash that can move quickly and provide friendly repayment terms. For instance, IOU Financial offers daily repayment instead of monthly, which means you don’t have to fear a mountainous outflow every 30 days.

Structure your company for flexibility:

If you operate in a volatile environment, it probably makes sense to use contractors and consultants rather than employees. This gives you the ability to quickly change staffing levels without disrupting peoples’ lives. You also sidestep issues concerning unemployment insurance, tax withholding, employee health insurance, retirement plans, etc. Choose suppliers and vendors who are willing to commit up front to extended repayment terms.

Share information:

The best practice today is to share your production data with your suppliers, who can then react faster to your changing needs. To the extent that you can make your suppliers your partners, you have the best chance of weathering bad times without facing lawsuits for nonpayment.

Factor in factoring:

When facing a cash crunch, consider factoring your accounts receivables. This will provide a fast cash infusion, but will cut your net income. Factoring can be useful, but is often more expensive in the long run than is simply borrowing at a fixed interest rate. You can also raise money by wholesaling inventory and selling off equipment, as long as this doesn’t permanently damage your revenues.

Find investors:

It’s not easy for small businesses to find outside investors, but if you can identify a willing angel investor or venture capitalist, you might be able to arrange a sale of equity. While this will bring in fresh money, it will also dilute your ownership. You might not be thrilled by having new partners in a business you created from scratch.

These options are useful, but the fastest and most convenient method to ride out volatile cash flows is to arrange a business loan with a reasonable interest rate and convenient repayment terms. If you agree, contact IOU Financial today and have funds deposited into your bank account in as quickly as one day.

When Should I Hire a Virtual Assistant For My Small Business?

Your business is growing and that once small start up has turned into a solid, reputable, and stable small business. While you grow your business, you may also find yourself considering the idea of hiring a virtual assistant: someone to tackle the day-to-day scheduling of work tasks or business meetings, and handling administrative duties to help you take your business to the next level.  You may even ask yourself where, when, or how to go about hiring a virtual assistant. In this post we will tackle the 4 key factors to consider when you’re considering bringing on a virtual assistant. Let’s jump in!

You’re ready to hire a virtual assistant:

When you lose track of keeping track

One of the simplest yet most important factors to consider when hiring a virtual assistant is knowing the right timing. If you find it hard to stay on top of simple day-to-day tasks, and you find your attention is being pulled away from the important roles you have, it may be time to bring an assistant on board. When your systems such as Evernote, Slack, Trello Boards and beyond start becoming overwhelming to keep organized by yourself, an assistant may be the solution. When you see it’s hard to keep track of things, don’t lose track anymore-bring on an assistant. 

When you have the business down to a science

When your business starts becoming a well-oiled machine and the products, services, and business model you run can be set to “cruise control,” you may be able to bring on an assistant. Your business is now solid, so bringing on an assistant may free up some of your mental energy and allow you to tackle the next steps for growth. Think about building a house: If your foundation is solid and in place, you can start tackling the framing of the walls. Allow an assistant to keep things running while you move on to framing up your next big project.

When finances make sense

Before you dive into hiring an assistant, be sure to consider the cost to do so. Virtual assistants are not minimum wage jobs, they can be costly if you’re hiring top talent. Make sure your business can justify and support an assistant. The intention is to bring in more business by hiring an assistant, so ensure the financial pros/cons are considered. You may not be able to pay a full year salary today, but can you justify the initial cost by allowing it to add revenue elsewhere?

When it feels right

There is something to be said for “trusting your gut” when you run a small business. It was that very gut that lead you to start the business in the first place right? Do not leave out the internal thought process for bringing on an assistant. Ask yourself if it feels like the right time, seems like the moment to enter that phase, and do “the cards just fall in place” leading to the perfect fit for your company? If your gut is saying go for it, then it should be worth the thought.

By now you have considered hiring a virtual assistant for your company and ruling out the various pros/cons for when and if that moment is right. Hiring a virtual assistant can be a vital asset to any small business, however the timing, need, and role in your company all need to be considered. By reflecting on the top 4 factors when hiring a virtual assistant, one can better prepare themselves for striking at the right place and the right time.

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