74 Percent of Small Business Websites Have No eCommerce

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Jun 9, 2016 by Joshua Sophy

Original Post: http://smallbiztrends.com/2016/06/small-business-ecommerce-trends.html

If you’ve been dawdling capitalizing on the ecommerce movement, you’re not alone as a small business owner.

New data from SurePayroll’s monthly Small Business Scorecard shows that only 26 percent of small businesses have an ecommerce site or even use their website in any way to conduct sales. Considering the push for small businesses to create an ecommerce and/or mobile site as a way to connect with customers, this paltry number is a bit surprising.

Again, 74 percent of small businesses surveyed by SurePayroll don’t have an ecommerce-enabled website.

How could this be? With the ability reach more customers, expand their brand and, of course, generate more sales and make more money, small businesses, you’d figure, would be champing at the bit to get their products or services online.

Well, 42 percent of the small businesses surveyed by SurePayroll say “the Web really isn’t that important to their business.” Twenty-eight percent of the small businesses in the survey said they don’t even have a company website.

So, even though most experts agree on the importance of a website, perhaps it’s the skills required to build an ecommerce site — or a website, in general — that’s keeping small businesses away from the budding sales platform.

Despite the growing number of DIY website builders — many aimed at small businesses — only 17 percent of that target market have tried them.

More than half (actually, 52 percent) of the business owners surveyed by SurePayroll who did have websites said they hired an agency outside the company to do all their website creation. Another 20 percent said they hired a freelancer. So, cost could be a factor in setting up an ecommerce site with many companies.

Just 11 percent of small business owners say they created their own site using their own skills to do so.

Overall, these numbers are a bit surprising and should be a wake-up call for small business owners everywhere, especially the 42 percent of owners who say the Web isn’t an important part of their business.

Ecommerce sales are skyrocketing and consumers are demanding an easier way to search and pay for products and services, be it just online or more specifically, on their smartphones. If you’re not offering this to your customers, there’s a chance they’ll find a competitor that is.

Spending an afternoon or evening checking out those numerous DIY website services that are available to small businesses may be hours very well spent. And if your company hired a freelancer or outside firm to create your site initially — and perhaps their invoice scared you out of calling back for updates — it may be wise to pick up the phone or send an email to find out what’s required to update your site to be mobile — and ecommerce-friendly.

Top Cash Flow Strategies for Small Businesses

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by Dave Schoenbeck June 15, 2016

Running a small business can be very complex and there are many distractions for the owner. Frequently, I see cash flow management become a secondary duty when business is booming and there is a perception that it will continue forever. I also know that pushing your customers for payment is uncomfortable. Unfortunately, employing cash flow controls and strategies are even more important when the times are good. Here are some great accounts receivable cash flow strategies ideas for business owners to use to keep your checking account full.

Review Your Entire AR Process – Most small businesses have a haphazard process. I highly recommend that you draw out a strict timeline and process to use and create a series of increasingly urgent letters that you can email to ensure that you get paid quickly. The squeaky wheel get’s the grease.

Send out Invoices as Soon as the Work is Complete – The faster you get the invoice to the customer, the faster you get paid. Most business owners are usually slow to get invoices out when they are concentrating on the operations of the business.

 

Hire a Part-timer to Manage the Accounts Receivable – If someone is accountable for the timely management of AR, cash flow improves dramatically. If the leader solely owns the execution it always gets deferred.

Run your AR Report Every Week – Run the AR aging report and study what is happening. Pay particular attention to the aging of invoices. Work on the >90 days first, then >60 days, and then >30 days. Once a week, make some calls to the laggards and your cash flow will improve.

Learn your Customer’s Pay Cycle – Many of your clients bill on different cycles. Once you know what they are, you can shoot the gap and make the call just before the bill is due.

Develop Relationships with your Customer’s Account’s Payable Department – This sounds crazy but developing the relationship with the person that can move your invoice to the top of the stack is well worth the effort. I have a client that sends candy bars to their contact. It works.

Use your Sales People to Push for Timely Payment – Usually the strongest client relationship is your sales person and their counterpart at your client. Many sales people don’t like to do this, the effect can be powerful.

Hire a Quality Collection Agency for the Last Resort – There are always a few client’s that force you to use this method. This customer should immediately be put into the never-do-business again column. I have seem some very effective and respectful collection agencies that can collect on old receivables and keep your customer if you decide to do that.

These are my top cash flow strategies for managing your accounts receivables. Your business does quality work and you deserve to get paid on time for it. Please don’t shy away from collecting the cash that you have earned.
Read more at http://www.business2community.com/small-business/top-cash-flow-strategies-small-businesses-01566776#KMvUarfLoEwA761t.99

Original Post: http://www.business2community.com/small-business/top-cash-flow-strategies-small-businesses-01566776#Vfo0etBjDcU7GAcY.97

How to sell a Startup Small Business Loan request to a bank

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June 2016- By Paul Long

As a banker for 19 years it is always amazing to me how people “pitch” there loan idea to me. I have had very formal presentations, I have had phone calls that made no since, I had people with a plan but no understanding of their own business. So this article will give you some tips on how to present your loan to a banker, what they look for, and how to wow them into giving you money.

Who are you pitching to?

The most important thing to realize is who are you pitching too, is it the right person? If you are looking for a $75,000 startup loan, are you presenting this to a loan officer the primarily works on commercial real estate or the banker that works primarily with small businesses like yourself. When you are making the appointment with a banker one of the most important questions to ask of the banker is do you work with this type of loan request, if not is there someone else in your office that does? You want to make your pitch to the right person, you don’t want them to say no just because they are not familiar with startup businesses.

What is the banks specialty? Ask your friends, community members and even the banker. What is the banks specialty when it comes to business lending? Do they offer SBA (Small Business Administration) Financing Programs? I know many banks that don’t want to work with startups or certain industries, don’t be afraid to ask. Both your time and the banker’s time is valuable.

Don’t be too formal

Please do not come with a PowerPoint presentation or formal business plan that is in binder or presentation folder. We do want to see your business but we want to see that you put the effort into the plans data more than the look of it.

Have you ever watched the TV show Shark Tank? If not, you should because those are good examples of how to present. Get to the point, be specific and tell is what you want. Community Banks like to also hear about who you are, what is your background, college education etc. At the end of the day we lend to people, not a business.

Be Reasonable

One of the most common things that I see in business plans is that their projections are not reasonable. If you are a startup business there is no way that you can make a ton of money the first month, then continue that same amount month over month. You need to have a slow start and increase as time goes on. When it comes to expenses you will probably have more up front expenses so be clear about them, also make your variable costs variable and you’re fixed costs fixed. If you are truly projecting that you are going to lose money the first year then state that, that isn’t a bad thing. Most all businesses lose money there first year or so, just be reasonable.

 

Also in your plan make sure to have a breakdown of how you are using the bank funds. If you are starting up a bakery. You should know how much the equipment will cost and how much working capital you will need.

How much can you give me?

When the banker asks you how much you need do not say “I don’t know, how much can you give me?” you will automatically be turndown. What was said in that statement is that I haven’t done my research and you just want the money with no plan. Chances are you also have no money to put in yourself into the project. A bank will not fund 100% of your plan, you need to come to the table with some money to put into the business, the more money the better.  Make this a focal point in your presentation.

How do you plan on repaying the loan?

It is common since that the business that you are starting is how you will repay the loan but what if it fails or you have a hard time making your payment because your projections were wrong. What are the secondary sources of repayment for the loan? Do you have a spouse that works full time at another job? Do you have retirement assets? Do you have a house with equity? Bankers always are thinking of risk and how will it be paid back.  Tell us your backup plan is something fails, it will impress us!

Have your personal financial house in order

Especially for startup businesses we will look to the owner for their guarantee. If you have personal financial issues chances are so will your business. The banker will ask about your personal credit. If you do have some financial issues be upfront about them and even more important is state what you have done since the “issue” and why we should feel better about the situation.

Overall when presenting a startup loan don’t be nervous, get to the point and tell us why you are a low risk.

 

Happy Financing!

 

7 Alternative Lending Options for Small Business Capital

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Jun 13, 2016 by Shubhomita Bose

Original Post: https://smallbiztrends.com/2016/06/small-business-capital.html

Note from Paul Long: These are alternative methods to bank financing and these options do come at at a higher cost to the borrower. Check with your bank first and if they are unable to help and you still need the funds, these are good options. 

Getting financing for a new business venture or a new product is always a challenge for the small business owners.

According to the U.S. Small Business Administration (SBA), about half to two-thirds of small businesses seek financing from a number of sources, including non-banking institutions.

In recent years, a number of alternative lending options have become popular for small businesses interested in accessing extra capital. Check out this list of cash advance small business loan sources.

Small Business Capital Options

Kabbage: Lines of Credit

Kabbage provides working capital online. It offers working capital or small loans payable over six months. The average line of credit is between $2000 and $100,000. Unlike traditional lenders, Kabbage approves loans by looking at real-life data, not just the credit score. It’s worth mentioning that the approval process is quite transparent and takes only a few minutes.

On the flip side, however, you need to pay back your loans within six months.

To be eligible, you need to be in business for one year or more, and make over $50,000 a year in revenue. To date, Kabbage has funded over $1 billion to help small businesses grow.

OnDeck: Short- and Long-Term Loans

Launched in 2007, OnDeck offers short-term loans of up to $250,000 and long-term loans of up to $500,000. The company also provides lines of up to $100,000 in flexible cash.

OnDeck doesn’t require high credit scores and its application process can be completed in about 10 minutes. More importantly, you can receive funding in just 24 hours. Another big plus is the transparency of the loan terms.

On the flipside, however, OnDeck doesn’t offer unsecured loans. So, when a business takes a term loan from OnDeck, a general lien is placed on the business’ assets until the loan is paid off. The business owner also needs to give a personal guarantee for the loan.

To qualify, you must be in business for at least a year, have a 500+ credit score, and annual revenue of more than $100,000 in the past 12 months.

SnapCap: Unsecured Business Loans

SnapCap offers unsecured loans of between $5,000 and $600,000 to small businesses. Unlike traditional lending that requires collateral to obtain financing, an unsecured loan — also known as a merchant loan — uses other factors to judge a loan application. These may include your credit score and sales performance.

SnapCap has a simplified lending process and a turnaround time of 48 hours. The company also offers some of the most competitive short-term loan options available today.

To qualify, you will have to share some information about you and your business. Some of the questions that you should expect to answer include:
• When did you start your business?
• What industry are you in?
• How much revenue did the business generate last year?

Fundation: Working Capital Loans

Fundation offers conventional business loans of up to $500,000. The online application process takes about 10 minutes, followed by an immediate initial credit analysis. The analysis ascertains whether or not you are a good fit for the loan. Once your application is approved, it takes three business days for the funds to reach your account.

The biggest challenge with Fundation is its eligibility criteria. If your business has not been operational for at least two years and doesn’t generate at least $100,000 a year, your application will be automatically rejected.

Your financials will play a major role in determining whether or not your application is approved. In addition to other criteria mentioned above, you should have at least three employees and good personal credit.

RapidAdvance: Merchant Cash Advance

RapidAdvance offers a merchant cash advance program best-suited for businesses that may not want, or cannot qualify for a traditional loan. The funds can be used to expand, renovate or reduce debt.

The company has a simple and short application process. Once you contact them, you will be required to provide some basic information about your business. Based on your inputs, you will receive a preliminary funding amount. If you are fine with the estimate, you will be required to provide more details about your business. The approval process takes about 24 hours and funds are made available within just three days.

The biggest limitation is that RapidAdvance does not work with online businesses. Moreover, it doesn’t offer prepayment discounts, unlike other lenders.

To qualify, your business should have a physical location. You must also be in business for at least three months and process at least $2,500 a month in Visa and MasterCard receivables. It is necessary to have at least one year left on your lease.

Accion: Microloans

Accion has been in the business of lending funds to small business for over 20 years. For businesses that need funds to grow, Accion offers loans in the range of $500-$100,000. The microloans can be used to purchase inventory, upgrade equipment or as operating capital.

It takes about 15 minutes to apply for the small business loan. You just need to provide basic information about your business to get started.

The biggest downside is that you need to provide collateral and equity to be eligible for the loan. Collateral could include real estate, if free and clear.

To qualify, you have to show your ability to repay the debt as well as proof of your income and revenue. You should also be in good standing with creditors and have a credit score of 500 or higher.

Biz2Credit: Online Loan

Biz2Credit is an online marketplace for small business funding. Its proprietary platform, serving more than 1.6 million users, connects borrowers to sources of capital based on each company’s unique profile.

Biz2Credit enables businesses to secure loans from $5,000 to $1 million. The application process is fairly simple. You have to complete a single application to get the best financing options available for your business.

A key highlight of the Biz2Credit platform is that it provides customizable financing programs for businesses that do not have a great credit score.

The only downside is that the funding process may take up to four weeks.

To be eligible, you should be in business for at least two years, be profitable and have a solid credit history. Startup loans are also available to entrepreneurs who are in the early stages of their ventures.

7 Ideas for Marketing to Existing Customers

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Original Post: https://www.sba.gov/blogs/7-ideas-marketing-existing-customers

By Rieva Lesonsky,

When small business owners think about marketing, they usually think about attracting new customers. But existing customers are equally, if not more, important. A survey last year found that marketers spend on average just 21 percent of their marketing budgets on existing customers—even though these customers account for the majority of their revenues.

How can you reach out to your existing customers and convince them to buy more from you? Here are 7 ideas to try.

  1. Gather data on your customers. What do they buy? When? How much do they spend? Are they motivated by discounts, do they willingly pay full price or a combination of both? Look for a customer relationship management (CRM) system that works for your business — and use it. The more data you can collect, the better you will be able to personalize your outreach to existing customers, and the more effective it will be.
  2. Stay top-of-mind. You take out ads to build brand awareness among prospective customers, but how do you keep your business top-of-mind among existing customers so that they return to you next time they need what you sell? Regular communication is key. Send your customers print or email newsletters that serve as an ongoing reminder of your business — with the added bonus of alerting customers to new products, services and offers they may not be aware of.
  3. Make them feel special. Consider hosting special events just for your existing customers. This could be anything from an in-store, after-hours sale for a clothing boutique to a year-end banquet for a B2B business. Receiving an invitation will make customers feel valued. Continue the special feeling at the event by giving them something new customers don’t have access to, such as first crack at a new clothing line, or the chance to sign up for a new service you’re offering.
  4. Follow up after the sale. This tactic works well with B2B customers, service businesses or large purchases, such as home remodeling, landscaping or luxury products. At an appropriate time after the sale — anywhere from two weeks to a month, depending on what you sell — contact the customer to see how they are doing with the product or service. This enables you to answer questions, solve any problems and ideally sell the customer on complementary or related products or services.
  5. Get existing customers involved in developing new products and services.Are you getting ready to launch a new product or service? Invite existing customers to provide their input during the development stage by hosting focus groups, conducting surveys or letting them test the product. Because they will feel personally connected to the product or service, they’re more likely to buy it when you launch.
  6. Start a loyalty program for existing customers. Loyalty programs can work for just about any type of business. The most effective programs use a tiered system where customers start out by receiving smaller rewards for smaller purchases, then graduate to bigger rewards as they spend more. Make sure your rewards system is simple and easy to understand — too much fine print will turn customers off from using it.
  7. Celebrate special days. A customer’s birthday, wedding anniversary or the anniversary of the first time they do business with you are all natural times to reach out to existing customers. Send them a relevant card (email or paper, depending on your customer base) and include a gift or offer substantial enough to be meaningful.

Above all else, make sure you offer your existing customers even better rewards, deals and treatment than you do to new customers. By making them feel special, you’ll build a loyal customer base.

A Simple Cash Flow Spreadsheet Anybody Can Use

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Original Post: https://www.sba.gov/blogs/simple-cash-flow-spreadsheet-anybody-can-use?APRILFINANCIALLITERACYSOCMED
By Tim Berry, Guest Blogger-SBA
Published: March 22, 2016

If there’s just one formal business skill every business owner should have, it’s understanding and forecasting cash flow. It’s not intuitive because it’s not the same as profits; but it’s vital. We spend cash, not profits.

Here’s my recommendation for a relatively simple way to lay out cash flow in a spreadsheet, so you can see it. It doesn’t take a CPA or an MBA to do it … just knowing your own business.

Do Your Numbers

Making Your Estimates

  1. In lines 3 and 4, you forecast the revenue from sales. Yours might be just cash sales, a single line. If you have sales on account, you know it. If you’re not sure (maybe you’re looking at a startup so you don’t have the experience yet), assume you do have sales on account if you sell to other businesses; and probably not if you sell to consumers. Line 4 is your prediction for when the business customers will pay invoices.
  2. The “Start” column reflects the starting balances and starting funding for a startup. With an ongoing business, you might have that balance labeled “Dec” for the ending month of the previous year. In this example, the startup owner borrows $55,000 and gets $25,000 as new investment.
  3. Lines 5 and 6 are important because new money from loans and investments doesn’t show up in your profits, but it’s there.
  4. That whole block of rows 3-6 is a simplification. You know your business. Where else does money come in? Maybe you’re selling assets too? Stay flexible. Take this simple example as just that, an example. Make yours specific to your business.
  5. Rows 9-10 are also simplified. Use as many rows as you want to estimate operating expenses, focusing mainly on fixed costs, rent, utilities, and payroll.
  6. Row 11 is there to make the point that cash flow counts what you spend for inventory and other direct costs of sales, when you spend it – not when it shows up in profit and loss. When a bookstore spends $10,000 in November to buy books to sell, those books might not show up in profits (as cost of goods sold) until December, January, or beyond … but that money leaves your bank in November. So you put it into your cash flow in November. If you don’t sell products, and don’t deal with inventory, then you might have a row for direct costs such as hosting, or customer
  7. Row 12 is there because most businesses pay a lot of expenses at the end of the month, or 30-45 days after received. For example, the ad you place might come through as an invoice that you’ll pay later. Row 12 is for all those things you pay later. And, just in case you’re keeping track, these are expenses, including tax and interest. The projected interest on that $55,000 loan is included there.
  8. Rows 13 and 14 show two items that are often forgotten in cash flow planning. Principal payments on debts, and buying new assets, don’t show up in profit and loss. But they cost money that goes out of your bank account.

Simple Calculations

As you can see in the illustration, row 7 sums the money coming in, row 15 sums the money going out, row 16 shows the cash flow for the month, and row 17 shows the projected cash balance. You can see from the illustration how the cash flow is the change in the cash balance, and the cash balance is the equivalent of checking account balance; it’s how much money you have.

The Key is Using it Right

First, tailor your cash plan to match the actual details of your business. This is a very simple example. Be flexible about adjusting it so it matches your business, and your bookkeeping,

Second, using it correctly requires keeping it up to date. Review it every month. Calculate the differences between what you expected and what actually happened, and make adjustments.

You never guess right. And this is all guessing. What matters is watching carefully and updating so you can react to changes in time.

Like all business planning, the value is in the decision. The business value of cash planning is the decisions it causes.

6 Step Guide- How to Get a Business Loan

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Originial Post: https://www.sba.gov/blogs/6-step-guide-how-get-business-loan

By ngoriel, SBA Official

Published: September 4, 2013  Updated: September 4, 2013

Money is the lifeline of any business, so whether you’re starting a business or running an existing one, securing financing is a major factor, especially for small businesses.  Many budding entrepreneurs find the task daunting and don’t even know where to begin.

Here’s a simple yet practical guide on how to go about preparing to apply for a small business loan.

1.    What criteria do banks look for in making small business loans?

Different banks or lending institutions may have different standards, but in general, in order to consider your application for a small business loan, banks will require:

  • The loan must be for a sound business purpose. For SBA-guaranteed loans, the business must be eligible based on size, use of loan proceeds and the nature of the business (no lending, speculating, passive investment, pyramid sales, gambling, etc.)
  • You and your partner(s) are of good character, have experience and good personal and/or business credit history
  • Ability to pay back the loan- reasonable to strong collateral (personal and business assets) is very important. SBA expects the loan to be fully secured, but we will not decline a request to guaranty a loan if the only unfavorable factor is insufficient collateral. And of course, owners must have personal equity investment in the business/skin in the game.

2.    What information will you need?

Different lenders may require more or fewer documents, but in general, you will need:

  • Personal and business credit history
  • Personal and business financial statements for existing and startup businesses and as well as a projected financial statements
  • Strong, detailed business plan (including personal information such as bios, education, etc.)
  • Cash flow projections for at least a year, and
  • Personal guaranties from all principal owners of the business

3.    How can you set yourself up from the beginning to make the process easier? (i.e. accounting systems, etc.)

Be prepared; be thorough; be truthful.

  • Choose your lending institution carefully. Larger banks tend to shy away from small loans as they are less profitable and take the same amount of underwriting and servicing. That doesn’t mean large banks do not make small loans; it is just more difficult.
  • Approach banks or lending institutions you have worked with or are a customer of
  • Explore community banks and Credit Unions
  • Talk to a lending officer and find out exactly what documentation they require
  • Be thorough, bring everything they ask. Many loan applications are denied or face unnecessary hurdles because of incomplete applications.

Even before you start gathering and organizing the information required by lenders to consider your application, you should educate yourself regarding business loans so you can understand and discuss intelligently with the lending officers when the time comes.

4.    What is the typical size of a small business loan?

Small businesses come in many sizes, from a start-up of a one-person company to hundreds of employees, and their financial needs vary accordingly, so “typical” also varies. That said, in the banking industry the median small business loan is about $130,000 – $140,000 with highest around $250,000. SBA small business loans range from about $5,000 (microloans) to $5 million (largest guaranteed) with the average loan around $371,000.

5.    How can you get financing to start a business since many banks want to fund growth?

Start-ups are probably the most difficult ventures when it comes to securing financing. Many start-up businesses seek financing from family, friends and credit cards.  If the credit is sound, the business plan strong and you have enough personal resources to invest and collateral to guarantee, smaller, community banks and  other community financial institutions and Credit Unions may consider lending you money.

Your best bet by far is SBA assistance. Begin by visiting SBA’s website , where you will find a wealth of information not only on how to secure a small business loan but equally importantly, other services and training opportunities to help you succeed.

6.    Are there associations that can help?

SBA works closely with a large network of partners that leverage SBA resources and are just one phone call away and ready to provide extensive help.

  • SBA District/Branch Offices– at least one in every state
  • SCORE– (approximately 300 chapters nationwide)
  • SBDCs – Small Business Development Centers; (approximately 900 locations nationwide; associated with higher education institutions (colleges and universities)
  • WBCs- Women’s Business Centers (approximately 100 educational centers nationwide)

Top 10 Financial Tools for Small Business Owners

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Originial Post: https://www.sba.gov/blogs/top-10-financial-tools-small-business-owners

By Marco Carbajo, Guest Blogger- SBA

Published: November 10, 2015

Many times financial tools are overlooked as a way to help increase a company’s bottom line. Financial tools have the ability to transform a company’s operations, improve productivity, reduce costs and increase profit margins. It’s essential for small business owners to take advantage of the right tools and resources to more effectively plan for the future and overall success of the business. Here are the top ten financial tools for small business owners.

  1. Accounting Software – Organizing your business expenses in a computerized accounting system rather than paper-based accounting offers numerous benefits. With accounting software such as Intuit QuickBooks™; a business can free up time by simplifying, automating, and tracking its key financial data. This is especially useful when tax season comes around.
  2. Business Plan Software – Whether you aim to present a plan to an investor, creating a plan to get your ideas in order, or planning for growth or expansion, the business plan software you select should be simple to use and help you reach your goals. SBA’s Business Plan Tool provides a step-by-step guide to help you get started.
  3. Financial Analysis – Knowing your numbers is the key to managing a successful business. By keeping tabs on your profit and loss statement, cash flow statement and balance sheet all in one place, you will be able to see where your business stands – and take steps to stay profitable. Explore Score’s library of financial statement templates to get started.
  4. Inventory Management – Every business needs an inventory management system. Whether you’re in wholesale, retail, service or basically any other industry, you have to keep track of your products. You can efficiently track inventory with cloud-based solutions available in the marketplace. Be sure to do your due diligence when choosing the right inventory tracking software for your business.
  5. Invoicing Software – Handling all billing by hand takes a great deal of time, and we all know that time is money. Invoicing software leaves little room for human mistakes, which means fewer missed payments or late payments will fall through the cracks. Just about every small business owner can benefit from switching from paper invoicing to dedicated invoicing software.
  6. Credit Card Processing – Customers expect to be able to pay for products and services using a credit card. Whether it’s a point-of-sale, mobile credit card reader, credit card terminal or online payments; it’s essential to first decide which methods of accepting credit cards for payment is best for your business.
  7. Business Credit Card – “There are plenty of benefits to using a business credit card versus a personal credit card for your small business,” says Alison Cahill-Rouse, a spokeswoman for Capital One. “You’ll also have access to business-specific benefits, such as employee cards and spending controls, and specialty service tailored to meet small businesses’ needs.”
  8. Business Debit Card – For quick, convenient access to your business checking account a business debit card is a must have tool for business owners.  Business debit cards offer the power to make purchases at millions of locations worldwide. The funds are debited from your business checking account with transactions clearly outlined on your monthly checking account statement.
  9. Business Credit Monitoring – It’s crucial for small business owners to keep a close eye on changes to their reports that could affect their company’s ability to obtain credit. Business credit reports and scores are dynamic. They regularly change based on a variety of criteria. Consider enrolling in an affordable monitoring service so you can review your company’s credit file to ensure it’s accurate and up-to-date.
  10. Business Credit Check – Small business owners can protect their company’s cash flow by identifying their most creditworthy customers through business credit checks. Checking a company’s business credit report enables a small business owner to analyze a company’s current credit standing and make well informed credit decisions.

Small business owners are so busy running their companies there’s little time left to keep their financial house in order, too. So, these financial tools are an effective way for small business owners to manage and grow their companies while improving their bottom line.

3 Essential Financial Statements for Your Small Business

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Original Post Link :https://www.sba.gov/blogs/3-essential-financial-statements-your-small-business?%20APRILFINANCIALLITERACYSOCMED

By plester, Former Contributor- SBA Blog

Published: August 4, 2014 Updated: August 4, 2014

Accurately tracking financial data is not only critical for running the day-to-day operations of your small business, but it is also essential when seeking funding from lenders or investors to take your business to the next level. In addition, keeping tabs of your finances can help ensure your products and services are priced right, identify what your margins are, determine your cash flow and make filing taxes easier.

Here are three basic financial statements that are important for your small business:

  1. Balance sheet. This statement provides an overall financial snapshot of your small business. As an equation, it looks like liabilities + owner’s equity = assets. The two sides of the equation must balance out.

There are two types of assets: current and fixed. Current assets include cash or other holdings that can quickly be converted to cash within a year. These may include inventory, prepaid expenses and accounts receivable. Machinery, equipment, land, buildings, furniture and other essentials that you are not planning to sell are considered fixed assets.

Liabilities can be broken down into current or short-term liabilities, such as accounts payable and taxes, and long-term debt such as bank loans or notes payable to stockholders. Owner’s equity includes any invested capital or retained earnings.  If you captured all of your accounting information correctly, both sides of the balance sheet equation should be equal. Download SCORE’s template to start setting up your own balance sheet.

  1. Profit and loss statement. A profit and loss statement, also referred to as an income statement, enables you to project sales and expenses and typically covers a period of a few months to a year.

To determine net profit, subtract total operating expenses from gross profit. (Gross profit – total operating expenses = net profit.) Remember that gross profit is calculated as total sales minus the cost of goods sold. Costs of goods sold include things like raw materials, inventory and payroll taxes. Make sure to also factor in overhead costs such repairs, utilities, insurance and legal fees into your operating expenses to ensure your net profit is accurate. SCORE’s profit and loss statement template (.xls) includes all the necessary calculations to help you forecast net profit.

  1. Cash flow statement. This statement highlights how much money is coming in to (cash inflows) and going out of (cash outflows) your business. Cash inflows include cash sales, accounts receivable collections, loans and other investments. Equipment purchased, expenses paid, inventory and other payments are considered cash outflows.

To calculate your ending cash balance, take the beginning cash balance, add cash inflows and then subtract cash outflows. (Beginning cash balance + cash inflows – cash outflows = ending cash balance.) Download SCORE’s cash flow statement template (.xls) to get started. Explore SCORE’s library of financial statement templates for more helpful documents.

Learn more about preparing financial statements for your small business and check out our free training course on accounting basics. You can find a SCORE chapter, Small Business Development Center SBA resource partner for additional resources, training and mentoring.