Small Biz Numbers

Basic Tips to Increase Customer Demand

2011-08-08T18:00:00.000+08:00

I read an article recently which states that financing may not be the problem for small businesses but it’s the drop in demand. Before the comments section in this blog gets filled with arguments, let me clarify. According to the NFIB survey conducted by Gallup, only 12% of their members cited that the problem they are facing is their inability to find credit while 29% said that bad sales was the problem. Credit is still tight and it will continue to be so until we are fully recovered from the recession. As it stands, it’s not going to be anytime soon.

Equity VS. Debt Financing

2011-08-01T18:00:00.012+08:00

Business owners have more choices today on how to improve their startups as compared to decades ago when opening or improving a business meant going to the bank and asking for a loan. One of the ways an existing business can develop their products and services is through equity financing. While most business models don’t appeal to investors primarily because of the risks involved, equity capital should still be considered as one of an entrepreneur’s options.

Equity financing isn’t a loan so you don’t have to worry about repaying it. As long as your business makes a profit, your lenders will be paid. Also the myriad of networks that your lenders are included in may be beneficial to your business as it would increase your credibility and visibility. Like everything else, this type of financing also has some disadvantage and the first one of which is the fact that you won’t have complete ownership of the business so not all decisions would be made by you. If you’re looking for autonomy and control, this type of financing may give you more headaches than others because your lenders would have a say in any business decisions, especially major ones.

However, not all businesses are approved for equity financing because the risk to the potential investor may prove to be too great. So after all the time you have spent networking with various prospective investors, entering contests and what-not, there is still not a guarantee that any investor would gladly give you the money you need.

Debt financing on the other hand is a loan that you need to pay on a fixed term. Sure, it may take you some time to apply for the loan but you might find that this option is preferable especially since you would have complete control over your business, unlike in equity financing. You need to be careful though because over-dependence on your available line of credit may cause you more trouble. Relying too much on your credibility to take out a loan may give you false assumptions that you would still be able to pay up even though your business revenue clearly shows you can’t. If you opt to take out debt financing, you need to ensure that you have the ability to pay your loan back. When the time comes that you need to develop your business by taking out equity financing, investors wouldn’t see you as “high risk”.

Another Credit Card for Small Businesses…From Google?

2011-07-25T18:00:00.000+08:00

As if taking over search engines and the recent foray into social networking aren’t enough, Google had recently announced that this time, they would also be offering Google AdWords credit cards for small businesses. A partnership between the search engine giant and World Financial Capital Bank now offers a beta version of the new AdWords Business Mastercard. According to reports, World Financial Capital Bank is issuing a no-annual fee card with an 8.99 percent interest rate.

6 Tips for Better Cash Flow Management

2011-07-11T18:00:00.002+08:00

A company’s financial health is largely determined by its cash flow. If a business owner neglects to effectively manage the movement of money into and out of the business, there’s always the risk that the business will face insolvency. Any factor that affects the liquidity of a company should be carefully tracked and considered so that the business will not fold because of cash flow problems. Entrepreneurs who have been running their business for some time all have strategies to maintain and improve cash flow. For aspiring entrepreneurs and startups, there are lessons you can learn from trodding a well-worn path and here are some tips to help you pave the way for a more efficient cash flow management.

Looking Into Peer-to-Peer Loans

2011-06-27T17:53:00.004+08:00

By now, everyone has already heard of VC Funding, Angel Funding, Bootstrapping techniques and other financing strategies for aspiring entrepreneurs who wish to open a business. As we are still trying to recover from the economic slump, creative ideas on funding keep on coming and this is good news for small business owners who are constantly trying to improve their businesses.

5 Approaches to Finance Your Biz

2011-06-13T00:00:00.004+08:00

Gone are the days when banks are the seemingly first (and on my opinion, the only) choice to finance a business. I remember when I was younger and my mother who is an Economics graduate who wanted to start a business used to lie awake at night, restless, thinking of all the requirements she had submitted to the loan officer at our local bank and wondering whether she could get that loan. As years pass, entrepreneurs get more creative and businesses seem to crop up. It's not major corporations who are the big players in the industry but small businesses which have been relentlessly trying to break into the mold.
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Do You Make These Small Business Startup Financing Mistakes?

2011-06-06T00:00:00.003+08:00

Looking for a person or a company to finance your startup is tough. What can make it even tougher is that once you get the financing you need, it might cause more danger for you business. Mistakes in handling money can be the reason for the fall of your business. These mistakes can be avoided but only if you know what they are. If for some reason, you have committed any of those mistakes but have detected it as early as now, there can still be hope for your business to survive and thrive despite the rollercoaster economy we have.
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The Pros and Cons of VC Funding

2011-05-27T18:00:00.009+08:00

Entrepreneurs who have been in business long enough are quite familiar with venture capital. For startups or those who are still thinking about getting financed by venture capitalists, you need to understand what it is about and its process. To help you out, here are some of the advantages and disadvantages of getting venture capital financing.

Building A Positive Business Credit Profile

2011-05-05T00:37:00.000+08:00

Starting a new business can be quite a challenge and to top it all off, you have got to work on getting funding for your start up too. If you are new to the business industry and you think that asking loans from banks may be just what you need to get a head start on that dream business of yours, you have got to be ready to stumble and fall a few times before you finally get that loan.
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4 Alternative Ways to Finance Your Business

2011-04-29T23:26:00.000+08:00

Whenever I browse through the latest finance news for small business, I get confused. Why? One minute, I read about how banks are easing up on lending for business owners and the next minute, I come upon a post which says the opposite. What's the real score? Are small businesses really getting the help we deserve or because of the recession, is bank financing really not feasible right now?
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Competitions to Fund Your Startup

2011-04-28T00:52:00.000+08:00

It's hard to get funding, especially for startups. However, there are a lot of options for the dedicated entrepreneur, joining competitions being one of them. It may be nerve-wracking for some, exhilarating for others but one thing's for certain. Even if you don't win, it is a great opportunity to gain presentation experience and feedback. Plus, there are experts who will be available to give advice on business strategies. Also, the publicity associated by just being an entrant is enough to give your business a boost.
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Finance Tracking Apps for the Entrepreneur

2011-04-15T18:00:00.106+08:00

It's stressful managing your business finances on top of your personal one. Managing money can be overwhelming for some especially if your expenses far outweigh your income. At some point, each one of us spends money we don't have that is why credit cards are very helpful.

Even if it's for business, spending way too much can cause financial crisis. The best thing to do is to track your business (not to mention, personal) expenses so that you would know where you are going before bankruptcy becomes inevitable.
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Small Business Issues With Mobile Payments

2011-04-13T18:00:00.000+08:00

It's pretty amazing how far technology takes us. Any business owner who keeps up with the trends can attest that tasks are made simpler by various web apps and other innovative applications. One such trend being looked into is the emergence of mobile payments. Everyone seems glued to their mobile phones these days and with the temptation of its convenience, most business owners feel that this is worth it.

There are several issues however which needs to be dealt with before entrepreneurs can fully be converted believers in whether mobile payments could prove to be necessary or not.

Tax Refund Spending Tips for your Small Business

2011-04-09T03:09:00.000+08:00

Tax season is in! As small business owners, it is important to know how to maximize your tax refund (assuming you have any) to help your business grow. The success of your business lies heavily on the ability of its owner to budget and scrimp when necessary. You could hold off on unnecessary expenses and use your tax refund instead on things that would greatly benefit your business, those that are a necessity and not just for luxury.

We all know that financing a small business is challenging. It's about time that business owners start spending their tax refunds wisely since it would help reduce debt and improve credit.

Improving Your Small Business Cash Flow

2011-04-01T22:05:00.001+08:00

According to an IGF survey, over 38% of small businesses have had problems concerning cash flow. This is not really surprising considering the recession. Cash flow is the lifeblood of small businesses. If problems regarding this factor is severe, it may be the end of your enterprise as you know it.

Efforts to make cash flow substantial for the survival of small businesses are looked into and pursued by small business owners. Let me share some insight I gained from an article I read recently on tips for improving cash flow.

The first is that you should have a forecast of how your cash flow would be like. According to the same article, you need to have an informed forecast. Read more »

Small Business Credit Cards: Is It Necessary?

2011-03-30T23:57:00.006+08:00

Cash flow has always been one of the biggest problems in operating a small business. That's one of the reasons why credit cards are being used by small business owners.

The fact is, since most lenders are still on the conservative side when it comes to financing, the next best thing small business owners can do is lean on are their credit cards. The question is, is it absolutely necessary?

The heavy dependence of small business owners on credit cards could not be helped unless loans are available for cash-strapped entrepreneurs. From buying office supplies to those all-important heavy equipment, one might say that sky is indeed the limit. Read more »

What You Need To Know About Crowd Funding

2010-10-29T06:26:00.006+08:00

If you're looking to fund your own business, you've got a rough road ahead of you. Even with the implementation of the Small Business Jobs Act, the existence of angels or the numerous VCs out in the market, you still have no guarantee that your loan would be approved.

There are also options to bootstrap but if you're the kind of person who does not want to make too big of a risk using your own finances, don't fret. There's still one other option available for you. Crowd funding is becoming very popular nowadays and it's usually because of those I have stated.

What it is
Basically, crowd funding is getting the funds you need by pooling money from those in your network, your clout. Before it started out as a trend to finance businesses, it was used as a way to help charities or to help in disaster relief operations and even electoral campaigns.
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Are You A Qualified Borrower?

2010-10-22T03:27:00.103+08:00

Have you had your loan denied yet again? Well, you're not alone. According to a New York's Federal Reserve Bank study, half of small businesses asking for credit are being denied.

Why? It's because you need to be deemed a qualified borrower in order to get credit approval for your small business.

Even though banks have the principal economic function of granting loans or line of credit, they are being conservative about it because of a high risk in uncollectable debts.

Translation? If banks give out loans to everybody who asks for it and for some reason or other, those borrowers do not pay them, there would be serious financial trouble for the banks. Read more »

Challenges in Expense Reporting

2010-10-20T15:58:00.065+08:00

Expense reporting can be quite a challenge especially for those operating a small business. In fact, because of its unpopularity, it is prone to errors according to the Concur Small Business Survey.
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A Look on Small Business Valuation

2010-10-15T22:08:00.001+08:00

Small business valuation is not only done because you are intending to buy or sell a business. Because of its similarity to business appraisals, valuation would also help entrepreneurs to realize any issues relevant to operating the business by evaluating the operational and marketing strategies. The bottom line here is, you will know the worth of your small business and even though it's not up for sale, you would know how it is doing financially.
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Understanding Subprime Lending

2010-10-13T17:22:00.098+08:00

There are many types of loans available for entrepreneurs. Since banks are uptight about approving loans because of the risks it entails, various alternatives to funding small businesses become widely available. One of them is subprime lending. There are some who think that subprime lending would cause more harm than good to businesses and consumers alike.
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Getting the Best Accounting Software For Your Small Business

2010-10-01T17:44:00.083+08:00

Keeping track of your small business finances can be a challenge and the popularity of various accounting systems can make you dizzy with how you can cope with the latest and the best software to help you manage your business finances better. Before choosing a specific accounting software, you have to know what would drive you to choose a particular kind and check on available accounting software reviews.
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What Small Business Owners Need to Know About Discriminatory Lending

2010-09-29T18:30:00.089+08:00

In an ideal world, everyone should have a fair shot in asking for a loan. We can't deny the fact that loans can spell the difference between growth or deterioration especially in the small business enterprise. However, this is not an ideal world that we live in and there are some practices which may deter business growth and expansion. One such practice is Credit Discriminatory Lending or redlining.

In a nutshell, redlining is when banks and other lending institutions denies credit to individuals and businesses because of ethnic background or neighborhood. This practice goes against the Federal Fair Lending & Credit Practices. That said, there are provisions in the Equal Credit Opportunity Act which every entrepreneur need to know:

1. The lender (i.e: the bank) has an obligation to notify the borrower (aka: you) of the development or progress of your application. The usual processing time is 30 days after the lender receives your application.

2. If in case your loan is denied, you should receive written notification of the reason why it was denied or refused or if there's any change in the terms of your loan.

3. Finally, if the lender has failed to comply, then they would be subjected to punitive and actual damages.

The Small Business Jobs And Credit Act

2010-09-17T19:28:00.044+08:00

It is not a secret that the small business sector generates more jobs despite the fact that the economy is likened to a roller coaster ride, all the nausea without the thrill. Even though small businesses help bring the economy forward, there is still difficulty in getting much-needed capital for growth and expansion. It is a welcome change therefore when just yesterday, Senate had voted to pass the H.R. 5297 or the Small Business Jobs and Credit Act.

This video by Sen. Carl Levin (D) Michigan, discusses more of the bill prior to its passage.

Small Business Analytics and Finance Automation

2010-09-15T17:49:00.117+08:00

There are a number of solutions out there for small business entrepreneurs. A recent development has been announced by Profitably which makes it easier for small businesses to access finance automation packages. This development is about leveraging cloud computation for small businesses to have easier access to data so that you as an entrepreneur would know what drives your growth and manage your business successfully.

There are some entrepreneurs who are still on the traditional side which means that they are using business intelligence as opposed to business analytics. Business intelligence is basically when you use consistent metrics to analyze past performance and use it as a guide to your business plan.

Business analytics is when you use different applications, practices and techniques which are fairly new to gain more information on how your small business is faring in the industry which in turn would give you more advantage on what to do next on your business plan.

Business analytics have metrics which would give you more information on the performance of your business, no matter how small it is. I am in no way saying which applications or companies you should be dealing with. You have to do some research and make the decision which fits your business goals.