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Small Business Accounting Made Easier

If you are a small business owner you know one of the most stressful aspects of running your business is keeping your accounting manageable. You may even be a little hesitant to take major steps to grow your business to it’s full potential because you are intimidated by the thought of accounting for a larger business. But rest assured, maintaining business accounting is possible both now, and as your business grows. What are the best practices to make accounting as easy as possible now, and as your business grows?

First of all, it is an absolute necessity to keep good records. Maintaining good records is more than merely keeping the receipts from all of your transactions. While that is a large part of good record keeping it is necessary to take things a step further to avoid panicking, particularly around tax season. Keep track of all of your expenses. Many business owners choose to make all purchases related to their business with a business credit card. This typically makes finding and keeping receipts in order easier than if the purchases were made with cash.

Accounting will also be easier if you remember to keep your business and personal finances completely separate from the start. If you begin by mingling your finances- using your personal credit card for business purchases or making business deposits into your personal account- you will find that your tax preparation will be a jumbled, frustrating mess. So it is a best practice to start, and keep, things separate from the start.

Many small business owners find that as their business grows they feel more comfortable with hiring a professional to manage their bookkeeping and business accounting. Even if you decide to hire a […]

Comparing Small Business Loans to Crowdfunding

 

There’s a new hot word in business financing: crowdfunding. This source of revenue is quickly becoming one of the most popular ways to secure the funds you need to see your vision to fruition. Traditional business loans are becoming harder to secure, so you must think outside of the box to get the cash you need to open your doors.
Traditional Small Business Financing
It’s important to understand the difference between traditional business financing and crowdfunding before you can determine if you’re as excited about this prospect as many others are. Traditional business financing is offered through banks and other qualified lending institutions. The money is secured by collateral and must be paid back, usually with interest.

For example, assume you are a whiz in the kitchen and have been told for years that you should open a catering business. You finally decide to take the plunge but find that you need more startup cash than you have saved. You go to your bank to secure a loan. The bank will request that you fill out a detailed application and back up any business loans with your own possessions.
Crowdfunding
Crowdfunding is exactly as its name suggests: you get money from a crowd of people. You propose your catering business idea on a website, and people who are interested in supporting it give you money to begin your venture. The amounts can be anywhere from a few dollars to a significant investment; it depends on the donor, and, yes, you just noted the word “donor.”

You don’t have to pay your crowdfunding group back as you would a bank loan. Rather, crowdfunding works like a gift, and the money is yours to keep. In some cases, people may add stipulations […]

Financing Growth With Business Mergers

 

 

Before a business can grow, it must be able to fund said growth. This becomes an issue for many young companies who aren’t able to foot that bill because they simply aren’t yet big enough. Business mergers have been practiced for ages, but more recently have become a useful way for entrepreneurs to increase the size of their company without sinking months worth of working capital into the endeavor. Instead, they join forces with a similar company and combine resources to meet increased demand. In the right situation, everyone’s bills get covered.
Growth Capital by Subtraction
One of the hardest parts of growing a company is covering the new expenses that you incur before your revenue stream expands. Some companies take out a loan in this situation, but that can just end up leaving you with an additional bill. Instead of trying to find extra money, why not cut the cost of growth? Business mergers can connect two companies with similar yet different needs, allowing them to provide for each other and cut costs across the board. If you can combine space, resources and even employees to an extent, overhead will invariably go down. You’ll be able to put resources towards actually growing that otherwise would have gone towards growth prep.
Combining Forces
Make no mistake; business mergers aren’t magical solutions that give you two companies for the price of one. You need to make sure that both parties’ needs are met before companies can join forces. Once you find a compatible merging partner, your business will be positioned to use the resources and even the clientele of the other half. A certain degree of networking is bound to accompany any business coupling. Ideally the two companies aren’t […]

Winning Business Teams: How They are Formed

Working together with other people is one of the key elements of a successful business. The most effective business owners realize that it’s simply not possible to handle everything that comes up in operations by themselves. They need to work hard and intelligently in order to create winning business teams that get the job done right. You can help form this essential best practice in business by developing an action plan, surveying attitudes and impressions and analyzing the skills of your key team members.
Develop a Plan
Before you put your people together, you need to figure out the role and ideal mission of your business teams. Next, you need to generate ideas about the main goal of the team. The most important part of this plan is to communicate the goals, function and purposes of the team to the members involved. It is important to develop strategies that help move the team forward through the different steps of completing each goal. If everyone is on the same page, then they know what they are supposed to be working toward. This can create a cohesive unit that works together toward a common resolution.
Survey Attitudes and Impressions
Another key element in creating winning business teams is how the team works together. Each team member has an impression of the productivity level of the group. Periodically you need to survey your people in order to get a sense of everyone’s level of contribution to the team and attitude about the progress toward the goal. If you find that some people are shouldering all of the responsibility of the team’s duties, and others are not as involved, you can make the necessary adjustments. Each person needs to feel comfortable […]

By |February 8th, 2017|Uncategorized|0 Comments

Read This Before Taking on New Business Partners

 

 

 

Just like you’ll want to date a person before settling into a relationship, you’ll want to get to know your potential business partners before going into business with them. It makes no difference what your motivations are for wanting a partner, there are a few things you’ll want to do before embarking on a professional relationship.
Do a Background Check
Before you sign papers, shake hands or pop bottles of champagne, ask your potential partners for a list of professional references, business associates and former partners. Go to great lengths when it comes to due diligence in regard to your potential business partners. Keep your ears, eyes and instincts open for red flags, and be sure to check the person’s online presence as well.
Bring in a Lawyer
No matter how much you trust a person or how good you might feel about the future of your business relationship, it’s in everyone’s best interests to bring in a lawyer. While legal fees are likely one of the last things you want to have to deal with, they’re a necessary expense. Duties, goals, responsibilities, finances and every other aspect of your business should be put down in writing, looked over by everyone and approved by an experienced lawyer.
Have an Exit Strategy in Place
Because all business deals don’t work out no matter how much time, money and attention you pour into them, you’ll want to make sure you and your business partners have an exit strategy in place before going into business. Before you think you’re dooming your business to failure before you even start, know that an exit strategy makes an abundance of legal and financial issues easier when you take care of them now rather than later. While […]

By |January 11th, 2017|Uncategorized|0 Comments

Gain Visibility In The Commercial Real Estate Market

 

Commercial real estate is a very competitive market. There are only a limited number of properties and clients out there. You want to grab your portion of the market, but it can be tough to get the attention you need to do so. You need to gain more visibility in the market so that people automatically think of you for their property transactions. Luckily, there a couple things that you can do to increase your visibility.
Market Yourself
While properties may draw some clients in, you really need to focus on bringing in clients on your own. You want people to work with you because they want to work specifically with you, not because you are handling a good property. When the client is attracted to you, you are able to build more solid relationships, which leads to being able to sell even the most difficult property.

To market yourself, you need to focus your efforts on getting the word out that you are good at what you do and that you are a trustworthy ally in the commercial real estate market. You can do this by creating a blog where you post articles about topics that would interest clients. Make sure you aren’t just talking about general topics. Write about specific things and really show your expertise. Make your blog exclusive and provide information on topics that nobody else is talking about. This will draw people in and let them know that you are the right person to work with.
Create Custom Marketing
When it comes to your property marketing, you also need to do something that will make you stand out from the crowd. The tried and true methods are fine, but you need to find an […]

By |December 19th, 2016|Uncategorized|0 Comments

How to Secure a Construction Loan

 

Many people try to secure funding for their building projects and are turned away. Loans are competitive across the board, but getting a construction loan can be particularly difficult. Lenders put a tremendous amount of faith into builders when they finance a construction project, so a loan applicant has to earn their trust in order to get approved. With that in mind, it’s important to focus on what you can do to set yourself apart from the other people trying to get access to the same money you’re after.
Be Painfully Specific
It’s not a good practice to leave anything up to the lender’s imagination. If you can’t offer a clear proposal for exactly how the money will be spent and the building will be built, you shouldn’t plan on getting approved for a construction loan. However, if you’re able to detail how the project will be handled, who will be doing what, and when completion can be expected, your loan application will earn much better consideration. Construction is hard work and lenders know this, so you should put forth every effort to prove that they’re sending money to a capable party.
Have Money to Put Down
Lenders often want to see 20 or even 25 percent up front before approving a loan. If at all possible, try to put together some money to prove that you’re invested in the project. It might be worth asking friends and family to subsidize your loan request to show that you’re a serious applicant willing to put your money where your mouth is. If the lender has any reason to believe that you have doubts about your project, its extremely unlikely that they’ll approve your construction loan. Any steps you can […]

By |November 10th, 2016|Uncategorized|0 Comments

Lacking Collateral? Consider Mezzanine Financing

 

In the world of commercial lending, there are several options for obtaining financing for your business. Among them are asset based lending, invoice financing, contract financing and more, based on your company’s assets and pending orders. But what about financing that isn’t based on collateral? When your company needs an infusion of cash to finance a new product line or expansion into a new market, consider mezzanine financing.

This type of financing is ideal in situations where the business owner needs cash quickly and doesn’t have anything to put up as collateral. Lenders are usually investors who do less due diligence before making the loan. However, they will want to see a proven track record, a viable product and a plan for expansion before lending the cash.

Mezzanine loans can be a life-saver for a company, but, as with all good things, there can be a downside. If the business owner is unable to fully repay the loan by the due date, the lender has the right to take equity in the company in lieu of cash repayment. However, it is rare indeed that the company owner loses control of his business to the lender. In fact, having the lender’s business acumen can be a good thing, and oftentimes companies are able to grow under his or her tutelage. It is often possible to buy the lender or investor out at some point in the future as well, which can be the ultimate win-win scenario.

The relative ease of obtaining mezzanine financing may be outweighed by the high cost of this type of business loan. Lenders or investors generally charge extremely high interest rates, and may have strict repayment plans. On the other hand, some lenders may […]

By |October 3rd, 2016|Uncategorized|0 Comments

The Truth About Private Equity Financing

 

 

If you are looking for alternative funding because your traditional lender couldn’t or wouldn’t extend you the capital you need for your business, you might have heard about private equity financing. Although many business experts tout this type of funding as the best alternative, the truth is it has pros and cons just like any business finance opportunity. It’s important to understand both before making a decision.
The Advantages of Private Equity
Private equity offers several distinct benefits over other funding options. Perhaps the most important is the ability to secure large amounts of capital. Some private equity deals are for hundreds of millions. While it isn’t likely your small business needs that much capital, it does show it could be easier to get what you need if you go the route of private funding.

Unlike traditional lenders, which don’t invest their own money into your business and therefore don’t care if it succeeds, private lenders often invest their own wealth into your company. This gives them incentive to help you succeed, meaning you usually have someone helping you in the background.

Finally, private equity often leads to higher returns. Many business owners who choose to go the route of private equity financing find their company’s annual profits grow, some by as much as 50 percent in a year.
The Disadvantages of Private Equity
Private equity financing has its disadvantages. Private lenders invest their own money into your company. Because they do this, it means they usually want a say in how you run things. While some people welcome this type of interaction and consider it a mentorship, others don’t want to share their operation strategies with lenders and especially don’t want to make changes to it based on a […]

By |September 12th, 2016|Uncategorized|0 Comments

Get The Financing You Need For Your Next Rehab Project

 

Unless you are fabulously wealthy, you are going to need financial assistance with every rehab project that you are trying to put together. Luckily, your last name doesn’t have to be Rockefeller or Vanderbilt to get the funding that you’re looking for. There are creative ways to get the real estate deal closed that you might not be aware of. Whichever one you decide to use, be sure to run it by your attorney to make sure that everything is done as per the rules of your state.

You could use your IRA account to fund the deal. Just remember to put all of the money back into the account when the deal is concluded. If there’s no retirement account to draw from, ask your friends and relatives if they would like to become your partner in a real estate transaction. Show them how much of a profit the both of you can make from the rehab project, if they supply the money for the repairs and down payment. You don’t have to limit yourself to just friends and relatives, you can also ask your co-workers and other investors. To get the funding you need, you can also borrow equity. This is when you use the equity in another property that you own by drawing up a promissory note and use it as collateral, since it is now the second mortgage.

An additional option is called “contract for deed”, which is used when the seller doesn’t have a mortgage on the property. In this scenario, you would get the deed to the house by using it as collateral and the seller takes the place of the bank. Since there is no bank involved, you won’t have […]

By |August 12th, 2016|Uncategorized|0 Comments