Financing Your Small Business

If there were only two reasons for a business to fail they would be poor financing and poor management or planning. You can’t over-emphasize the importance of financing your business. Financing the business is not a one time activity as some might think. It is necessary whenever the need arises such as when expanding, modernizing etc. At this stage you need to understand the importance of exercising extreme caution and plan the utilization of capital. A wrong decision here can haunt your for the life of your business.

Are You Sure You Want To Raise External Funds?

For start-ups, it’s understandable that you need to raise capital through loans. But what about expansions and upgrades? Make sure that external financing is an absolute must before you apply. It is critical that you organize your finances at transitional stages but only after you make sure that you can’t do it yourself, either permanently or for some time. Equally important are the criteria of risk, the cost of not financing and how well it contributes to specific and overall goals of the company.

FINANCING TYPES

Equity Financing: Equity financing involves selling off of your shares (mostly partially) in return for cash and giving away that portion of ownership and rights to profits. Equity financing can be sought from private investors or venture capitalists. This brings about proper capitalization opening access to debt financing. Equity finance doesn’t need to be returned like loans unless your partner wants to withdraw.

Debt Financing: Debt financing is loan financing against some kind of guarantee of repayment. The guarantee can be collateral, a personal guarantee or a promise. Lenders restrict the use of debt finance to inventory, equipment or real estate. You need to properly structure the debt and the rule of thumb for doing so is giving long term debt for fixed asset loans and short term for working capital. The reason is that fixed assets generate cash flow over their lifetimes and have the benefit of lower interest rates as opposed to working capital loans.

Sources of Finance:

You can choose finance sources depending on your circumstances and the amount required.

1. Family and Friends: Small and short-term working capital requirements can be financed quickly through your own resources or through family and friends. The benefit here is the absence of the interest component (mostly.) This method of raising finances is handy even in early stages of business. You should be mindful, though, that disputes over money are the main reason that close relationships turn sour.

2. US Small Business Administration: This is the most prominent source for debt financing. The SBA doesn’t lend money directly but organizes and guarantees loans through various lenders and sources under its umbrella. Local governments, banks, private lenders, etc. disburse loans immediately to businesses approved by the SBA. SBA loans are available for various business purposes and at the lowest interest rates available.

3. Venture capital: Raising venture capital is organizing financing through selling shares whose value equals the finance you require. Essentially this means selling a portion of the ownership and control rights. It is essential that a proper valuation of your business’s worth is made before the deal is done.

Financing a business shouldn’t be hard provided you have established your credentials as a good manager, have collateral/assets, a convincing cash flow statement, genuine need, a proven track record, good credit history and a robust plan. This should not just save your business from collapsing but also allows it to grow and succeed.

Why In House Financing Is Necessary

Retail Credit is being withheld causing many retailers to try to find a buyer for their retail sales contracts. Higher interest and larger discounts are not enough for the finance companies to purchase the contracts. Credit is not offered, as before, therefore to survive in business, it is necessary to have your own in house finance company. If you don’t have one, then you should seriously consider starting one.

It is a self-supporting protection for your business to succeed. Outside finance organizations have raised their requirements so high for that only a few people can now qualify for credit.

Credit Cards have been a source of financing for smaller amounts. That availability may be eliminated with the new laws soon going into effect. The credit card interest and requirements to get a card are higher, and credit limits may be much smaller. Consumers will be looking for retailers with in house financing.

Take the fear out of financing.

The first step in managing your own financing is to select a software program that will successfully support the monitoring and communication functions of a finance company. Financing is the key to business success.

1. Financing is a very profitable business.
2. You can manage your own credit accounts.
3. Double your profit without increasing your sales.
4. Finance is the largest industry in the world.
5. There is almost no cost in generating the business. You have created all the forms and contracts at the time of the sale.
6. You can make the sale and retain Customers Loyalty.
7. Payments will provide daily cash flow. As you add to your portfolio the cash flow will also increase.
8. Interest is charged every day of the year.

Businesses are losing their availability of outside financing. There is no better time to start your financing than now.

Your finance division or company is the “Life support system” for your businesses. The criteria for purchasing an account has not changed for the companies who do their own financing, therefore they are doing business as usual. Many of these stores have gained volume because they can finance sales that the others lose. Larger down payments will make the contracts stronger

A customer who has purchased over the years, and are suddenly turned down for financing a new purchase, can destroy the customer’s confidence and loyalty.

Start your finance division now and each month as you add more contracts your daily cash flow will become sufficient to support your business. If you re-invest your finance profit it will grow at a much faster rate. At that time your business will be self sustaining and will not depend on others to dictate your success or failure.

Articles have been written on “How to buy a Contract”, setting up a Credit Policy, and How to Collect accounts. Monitoring and communicating with your customer is very important for finance management. Learn how to analyze your accounts for the best return on your investment.

Remember that investing in your own finance division is the best insurance that your company will succeed in business.

An Inside Look at the Importance of a Smile in Sales

If you’re in sales, then you’ve probably heard all sorts of advice, from “don’t oversell” to “focus on solving problems.” However, one of the best pieces of advice that many forget is to smile! After all, your smile is one of the first features people notice about you, and it plays an essential role in the first impression you make. Keep reading to learn all about the importance of a smile in sales (as well as how cosmetic dentistry can help!).

Smile: Your Sale Depends on It!

Knowing your product and knowing your audience are key in sales. However, you don’t get far if your client doesn’t trust you or believe you. That’s why it’s so important to make a good first impression! Here are a few ways a smile can help:

• Smiling is more powerful than you might think – One study found that smiling has the same effect on our brain as $25,000 in cash!

• Smiling communicates your state of mind – Smiling is a non-verbal cue that you are happy to be where you are, that you are confident in your product, and that you are ready and willing to help.

• Smiling creates a ripple effect of positivity – Have you ever seen a friend yawn and done the same? Or seen someone take a sip of water and immediately realized you’re thirsty? Thanks to the mirroring neurons in our brains, we naturally mimic the behavior of those around us.

But What If You Don’t Like Your Smile?

If you don’t like your smile, don’t worry – that’s where cosmetic dentistry comes in. Whether you’re struggling with misaligned, misshapen, cracked, or otherwise imperfect teeth, your smile goals aren’t out of reach. The first step? Scheduling an appointment with a skilled cosmetic dentist. For both my father and myself, providing high-quality, personalized, and judgment-free dentistry is a passion. There’s truly nothing better than seeing someone walk out of our office with a dazzling, confident smile! So, don’t wait to make your dream smile a reality – it could make all of the difference when it comes to your personal and professional life!