(BPT) - If there’s one thing that keeps small business owners up at night, it’s cash flow problems. Without solid cash flow, businesses can lose employees and suppliers, and watch as their normal business operations fall apart. When small businesses run into these issues, they often struggle to find a way out, making cash flow problems feel like quicksand. Thankfully, it is possible to pull yourself to safety. Here are just some of the ways small business owners can adapt their business practices and overcome the nightmare of poor cash flow.
Rethink your invoices
If you’re not sending invoices out as soon as possible, start right now. It’s simply the only way to get paid. But beyond that, you may consider changing your invoice policies to encourage timely payments from your customers. You can offer a small discount if they pay before the agreed-upon term, charge a late penalty or consider invoice factoring or financing. Whatever you do, keep on top of your invoices because they’re ultimately the key to solving any cash flow problem.
Take stock of your tech
Your technology investments were supposed to improve operations and drive efficiencies to save you money. But did they? Consider taking stock of your existing technology infrastructure. You may find hidden, costly issues that hinder your ability to maintain solid cash flow. For example, if you invested in an ecommerce site but it has poor UX design and doesn’t accept popular payment options like PayPal and Apple Pay, you’re leaving money on the table.
If you’re not a tech expert, it’s critical you have a technology partner that you can count on to give sound advice. Dell Small Business advisors can provide insight into the latest advancements and help guide your decisions to improve both your operations and your cash flow.
Upgrade your accounting software
If you’re using outdated accounting software, you may be turning a blind eye to potential cash flow problems. Newer accounting systems come with advanced monitoring capabilities, can automate invoices and generate cash flow reports. These reports provide insights into your cash inflow and outflow, so you can quickly identify and resolve cash flow problems. The best method to take charge of your company’s financial health is to have the best information available, and the simplest way to do that is with powerful accounting software.
Making long-term investments may be reckless for small businesses tight on cash. But there are other ways to make your money work for you while maintaining liquidity. For example, you can direct your accounts receivable payments to a high-interest savings account so you start earning interest immediately after your invoices are paid. You can then move money to an interest-earning checking account to pay for your regular expenses. You can also use money market accounts or certificates of deposit (CDs) to improve your cash position. The important thing is to change your investment mindset and find ways to maximize every dollar coming in and going out.
Optimism is an essential characteristic of any entrepreneur. But if you’re letting that optimism get in the way of sound business practices, you’re only setting yourself up for failure. For example, buying more inventory on the simple belief that you’ll hit your sales targets during the back-to-school season is a fool’s errand. Stop playing the “hope” game and go back to your data. Set realistic targets and expectations and build your cash flow strategy around that.
While cash flow issues can certainly be alarming, they can also be temporary. By taking these steps and developing a thoughtful approach to your inflow and outflow, you can resolve cash flow problems and strengthen the financial health of your business.
Most large businesses have an IT team that is responsible for protecting data and networking the computers used by employees. In many cases, the IT department can be ignored or isn't given enough attention from upper management. If you manage or own a business, there are a few things that you need to know to get the most out of your IT team.
How Much to Budget
Depending on the industry, good IT can cost a bit of money because the technology likely affects your customers. Technology is a key driving force in every business market, which makes IT teams more in demand. IT teams can also cost more because they're responsible for accommodating the re-occurring wave of change while embracing technology as a partner rather than a commodity. Companies that sell technology as a product will likely have lower costs than those that sell products like tacos or buildings. Investing more money in IT may be a sacrifice but can have a positive impact on each department and aspect of the business.
If you make the mistake of getting hooked on buzzwords as a business, then you will quickly find yourself bloated with useless hardware and incompatible software, which can make your IT team confused and ineffective. Do you know the difference between ITIL and ITSM? Using confusing acronyms can only lead to issues and complications that occur down the road.
Many businesses fail to have an IT plan or strategy, which is critical to the operation of their business with the type of software that is used. Many businesses often assume that technology can compensate for mistakes that are often made, but it is actually a force multiplier for the business. It can save money, attract more business, and boost the productivity of your team. You'll need to work closely with your IT team to develop a strategy and research the top software that can be utilized. Work with a professional that can help you to identify that IT structure that is needed to support the business and also plan for the future.
Businesses that understand the importance of their IT team often succeed because they utilize what the department has to offer. With the right software used and a plan created, you'll likely obtain more success in the industry.
How businesses access working capital has shifted, as traditional methods haven’t kept pace with the speed of business. Where can entrepreneurs turn for funding? These three alternative options may be worth considering.
(BPT) - How businesses access working capital has shifted, as traditional methods haven’t kept pace with the speed of business.
Growth is one of the biggest indicators of small business success. According to the Small Business Administration (SBA), more than 500,000 businesses have between 20 and 99 employees as of 2014. These established businesses are in the upper end of growth but have not yet met the threshold of being a medium business. In fact, 39 percent of growing companies — between three to five years old and seeking more than $100,000 — consider accessibility to capital their greatest concern. It’s during this stage businesses typically are faced with growth challenges.
Where can they turn for funding? These three alternative options may be worth considering.
1. Lines of credit
Lines of credit, provided by online lending platforms like Kabbage, offer established businesses in all industries the flexibility and convenience of accessible capital.
With Kabbage there are no fees to apply for a line of credit or annual costs to access funding. Small businesses don’t pay a thing to see for how much their business can qualify. Kabbage offers access to lines of credit up to $250,000, helping small to mid-market businesses access funding for operational costs and strategic investments like cash flow needs, purchasing specialized equipment, business expansions and launching high-growth marketing projects. There are also no obligations in how much a business is required to take. Businesses can take the amount they need from the line of credit when they need it, with no hidden fees or pre-payment penalties.
Lines of credit are faster and more flexible than traditional loans. In fact, Kabbage offers a loan application that can be finished in minutes — even through a mobile app — eliminating the time usually spent waiting in lines or filling out numerous forms.
2. Merchant cash advances
Some established businesses turn to a merchant cash advance (MCA) due to lower credit ratings, not having enough assets to provide as collateral, short-term financing needs or the flexible repayment terms.
Essentially, an MCA is an advance on future credit card payments. The cash advance is decided upon by the funding company, with the specific amount being paid back in full plus fees and interest.
With merchant cash advances, borrowers pay a set percentage of their credit card sales and make payments every time they receive credit card payments from clients.
3. Invoice factoring
Invoice factoring is another funding option established businesses use in lieu of bank loans. Factoring is the process of selling accounts receivables to a financing company for immediate cash.
Factoring helps businesses receive cash much faster than waiting for clients to pay their invoices. The financing company, known as the “factor,” pays the business the majority of the invoice upfront. Once the business receives payment from the client, they send those funds to the factor. The factor then pays the remaining percentage to the business.
Factors are more concerned with the financial health of the business’s clients rather than the business itself. These companies collect directly from a company’s clients and customers, sometimes requiring payment history validation from the business. A benefit of factoring is not assuming debt for money received; however, if clients are not creditworthy, you may not receive funding.
To maximize this growth, consider looking online at www.kabbage.com/yes to learn about and find new options that fit your business. Merchant cash advances, invoice factoring, and lines of credit are three alternative solutions that help growing businesses go beyond traditional financing methods.
Sell your home fast with these 3 often-overlooked home-staging tricks
(BPT) - If you'll be selling your home this spring or summer, your Realtor will probably talk to you about staging the house to maximize its appeal to buyers. Staging is a simple process that can have a big impact on how quickly your home sells and, Realtors say, how much buyers are willing to pay for it.
If you've decided to stage your home for a speedier, more profitable sale this season, keep in mind these three often-overlooked tricks to make your home look, feel and smell great:
"Aromas significantly impact emotions, so making your house smell good is a great way to appeal to potential buyers on a very elemental level," says Charlynn Avery, aromatherapist and educator for Aura Cacia, an essential oil brand "But be careful to not overwhelm with scents that are too 'perfumey' or synthetic, as those could cause adverse reactions in people who suffer from allergies. Instead, opt for natural freshening scents like lemon or purifying scents like eucalyptus."
Avery suggests warming water on the stove with a few drops of your favorite essential oil such as cinnamon, clove, vanilla or orange. It's a quick, low-cost way to create a welcoming aroma in your home. Deodorize carpets with a mixture of 18 drops of essential oil and 1 cup of baking soda. Or, you can easily create your own air freshener by mixing your favorite essential oils and distilled water in a spray bottle. For longer-lasting, comforting aroma, try this recipe for aroma crystals:
Vanilla amber aroma crystals
Mix salt and oils, pour into a decorative dish or bowl and set out on a table. Placing the crystals in a warm sunny window or near a heat register will help diffuse the delicious aroma throughout the room. Stir in additional essential oils to boost the scent as needed.
Declutter even where you don't think it counts
Your real estate agent will likely tell you to declutter - removing extra items from kitchen countertops and from tables throughout the home, packing away family photos and excess knick-knacks. All those things are important, but what happens when a potential buyer opens the hallway closet, or goes into the walk-in closet in your master bedroom?
It's important to declutter everywhere, not just the spots you immediately see when you walk into a house. Serious buyers will open drawers, cabinets and closets and if those spots are stuffed full, they'll look smaller, less impressive and unappealing.
Likewise, clean out your garage; it's hard for a buyer to appreciate the expansiveness of your two-car garage if that's where you've stored all the boxes of stuff you removed from the house. If you have a lot of stuff to pack away, consider renting a storage unit for a few months.
Clean as if your life depended on it
Kitchens and bathrooms sell homes, but even a hint of dirt in either room can wipe out a buyer's good impression of your home. A deep clean is essential in these rooms, and will create a positive effect on multiple levels; your home will look and smell clean, fresh and newer.
In the bathroom, be sure bathtubs and showers are meticulously clean. Descale showerheads and glass shower doors, clean and polish metal drain grates as well as fixtures. Clean grout, mirrors and every crevice. Add a few drops of lemon or sweet orange essential oils to sink and shower drains to keep them smelling fresh.
In the kitchen, in addition to clean countertops, floors and appliance exteriors, make sure the inside of ovens, refrigerators and dishwashers are also clean. Since kitchen appliances usually come with the house, buyers may look inside them. Change the filter in your kitchen hood and make sure the light over the stove is working. Finally, while clean windows are important throughout the house, they're essential in a kitchen where buyers want to envision themselves in a bright, welcoming environment.
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