Small Business Accounting Software – Is It Wise To Go On Without It

How much better would your business run if all of the little nuisances of running the day to day operations, mainly the accounting part of it, were more organized and orderly, and not spread out across your computer in folders and spreadsheets?

It’s usually one of the most overlooked aspects of running a business that to-be business owners don’t consider when strategizing opening theirs. So you’re definitely not alone when it comes to the messy headaches that you face on a daily basis trying to keep your financial accounts in order. In fact, if you were to add up the differences in the time that you spend trying to grow your business (which is what you should be focusing on) and the time that you spend on the day to day accounting tasks of running it you’d probably see clearly that you’re losing a lot of precious time. Time that could be put to much better and more efficient use.

The answer to your problem very likely lies in small business accounting software. These are programs that basically streamline your daily financial responsibilities such as bill payments, payroll management, invoice and estimate creation, receiving payments, and much, much more. In fact, it seems to be an endless list, and the more disorganized you become -the further you get behind, which is when a lot of businesses begin to get in trouble financially…and the worst part is that it’s all very avoidable. Easily in fact!

Your best, most proven option for small business accounting software is Intuit’s Quickbooks. Quickbooks have been being used successfully by businesses for over fifteen years now. But this doesn’t mean that what you’re getting is fifteen year old outdated software.

Quite the contrary in fact; Quickbooks makes sure that their customers stay satisfied by making drastic improvements every year on the software. This is both to fix any bugs that might be in the system, to improve the system and make it easier to use, as well as to keep the software up to date with the times. Things change very quickly these days, especially with the internet, and so Quickbooks does a very good job of keeping up with these changes.

It’s important that your small business runs smoothly without squandering your precious time – as the owner – on tedious but essential tasks, as well as keeping your financial accounts highly organized with as little errors as possible.

This becomes crucial in all aspects including paying your employees…as well as keeping track of employees. This is easily accomplished within Quickbooks. Just as well, you need to be sure that all of your outstanding invoices and accounts are being paid in a timely manner. Let’s face it; if you’re not paying your vendors and suppliers, you’re not going to be in business much longer. That is a must to keep organized and up-to-date.

You also want to make sure that your business is running like a well oiled machine and one sure way to do so is to make sure that you’re being paid… and that you’re keeping track of those payments. Whether it’s through thirty, sixty, ninety day billing or even simple point of purchase sales…keeping track of all this is paramount.

Another hugely important aspect is keeping track of your customers and how they make purchases. You’re capable of all of these tasks with Quickbooks. Better yet, you’ll have all of this data in one spot on your computer – under one program – and not scattered throughout file folders in Excel spreadsheets that are so tedious to update that you get disorganized because you would just rather not deal with the headache at all.

It’s the everyday things that you must to do that are the killers, and getting one step behind in one aspect affects the whole picture. Just as importantly, Quickbooks has many functions and applications that simply make your life much easier period.

With Quickbooks you can print checks and customized estimates and invoices in a flash. In fact with the new 2008 version you can go a step further and send them right off directly to your customers or clients using Outlook or Outlook Express. This is a huge time saver in itself.

Whether your business is a mom and pop shop with zero to one employees, or a bit larger with up to twenty, there’s a version of Quickbooks that’s right for you. And the best part is that it’s extremely affordable and will much likely pay off for you in its first month if not the first day.

Small business accounting software is extremely vital to the survival and growth of your business. You might as well use the one that’s the most trusted among small businesses – and one that you know will constantly be improving to make your life easier by the day.

“Private Investors For Startup Small Business Wanted” – Think This Ad Has a Chance in This Economy?

If you are thinking of finding private investors for your startup of a small business, the current recession will make your efforts more difficult.  Many private investors are very wary of investing in new businesses, but there are ways if you have a solid business plan, good credit and find the right investor.

There are many stories of great wealth that was created during hard financial times.  The bad economy has, understandably, greatly reduced the number of people launching new businesses.  There are people that are still willing to invest in small business start ups because the potential return on their investment can be significantly higher than what a risky stock market can produce.

The kind of private investor that will be willing to lend money during a recession is will probably require that the business plan be nearly bullet proof.   Placing an ad like the title to this article is likely to not be very successful. A small business entrepreneur looking for private investors will need to seek out the investor rather than just hoping that they will respond to an ad.

There are many ways to find investors and the type of business that is being started will limit the possibilities.  One of the best places to go for a business loan would be to a small commercial bank.  Oftentimes, small commercial lenders have more wiggle room in lending requirements than larger regional or national banks have.  Getting a loan from a bank, however, will require significant assets pledged as security for the loan.  Small banks will often require that the borrower give a personal guarantee which will increase the financial exposure for the business owner.

There are also lending clubs that can be found that pool the resources of numerous private investors to provide loans to small business owners.  These lending clubs can be found on the internet or through referrals from other business owners or business investment firms. 

There are also venture capital firms and angel investors that will invest in small business start ups, but these investors will want to be involved or at least monitor the start up of the business to make sure that their investment is safe.  The cost of these types of loans can often be high, but the right investors will often be a huge asset as their desire to protect their investment may also increase the business’ chance for success.  Angel investors and venture capitalists are often not shy in offering advice if it will protect their investment.

One of the best ways to get a private investor for a small business start up is to find an investor that will be willing to be a partner.  This partner can be a silent partner or can be involved in the business, but such an agreement should be put together by an attorney so that the business owner can have a buyout option once the business is successful.  Giving up equity in a business start up is often difficult for a budding entrepreneur, but it may be the easiest way to find money to get a new business up and running.

Placing an ad that says “Private Investors For Startup Small Business Wanted” is not likely to be that effective in a difficult economy.  Once a solid business plan has been completed, the future business owner should plan to spend a fair amount of time seeking out investors for the new business.  Selling the plan to the future investor may be the most difficult part of starting the business, but the efforts will hopefully pay off and result in a post recession boom for the business owner and the investor.


Startup Financing For Small Businesses

Startup financing for small business is necessary and hard to acquire.  Financing the startup of a business is a particular challenge during tough economic times, as small business startups need money when money for starting up is hard to find.  During these challenging economic times, it is difficult to obtain startup financing from traditional business financing sources; particularly for small businesses, which are considered a high risk for business failure.

However, fueled by a growing unemployment issue (caused by shrinking businesses and lay-offs), individuals are following their dreams and opening a small business.  If their business idea is perceived to be very strong and if they have a unique product or service with a good strategic plan, they might be able to get traditional business start up loans. If there is a perception of risk, those entrepreneurs need to find an alternative method of raising startup funds.

Traditional business financing includes commercial lending organizations, banks and government financial programs. These organizations provide loan products, operating lines of credit, equipment leasing and asset financing, and more. But, due to current global financial market conditions, it can be challenging to qualify for this startup financing (lending criteria has tightened as most traditional lending institutions want a high level of security and low risk) and it can also be challenging to get cash-strapped lending institutions to disperse business start up loans, asset financing, or operating funds promised.

One alternative to traditional financing is to see if you can interest an Angel investor in providing an investment in your business.  Angel investors typically charge higher interest rates and are in for a short term period; they want an exit strategy within a specified period of time (therefore they will want their money back, with interest, quickly). Angel investors are often interested in the high tech or biotech industries; or other high reward (and also high risk) industries.  To attract Angel investors, your business needs to have strong and fast growth potential, a talented management team, a compelling business plan, and well priced equity. Angel investors usually look for up to 50 percent equity in the business; this is really dependent on the business proposal and the investment amount.  You typically give up some control when you develop a relationship with an angel investor.

Another alternative is to find a strategic partner or to build a strategic alliance that allows your business to reduce its cash and/or startup financing needs. This also means a loss of control over the business; and partnerships can end up like marriages, in divorce.  Yet another alternative startup financing is bootstrapping.  Bootstrapping is financing a business startup or business growth through non-traditional methods. Bootstrapping is about raising funds (for example, to start a new business), without startup capital.  If you plan to startup a business that has a significant investment in capital equipment, consider asset financing.  Asset financing will provide a loan for equipment that you buy to operate your business.

For new business owners, that might mean working several jobs to raise cash.  Or revising your plan to start your business with less money, or fewer products or services.  Consider leasing furniture, computers, sharing office space and administration staff.  Make sure you carefully consider your cash flow needs and do a cash flow projection for at least a two-year period.  Cash flow management is a way of reducing startup financing needs; effectively manage your cash flow by managing receivables, payables, inventory, and short term debt (in other words, increase incoming cash and reduce outgoing cash). 

Some other non-traditional business financing methods might include:

  • use of credit cards;
  • second mortgages on the entrepreneur’s home;
  • equity loans, secured by personal assets; loans from key suppliers;
  • partial pre-payments or progress payments from large customers;
  • and/or loans from family, friends and associates.

For small business owners, obtaining the financing to startup your business or to keep it operating is usually a challenging experience. Before you borrow the money you need for startup, ensure that your business can support that level of debt and can repay on the lender’s debt schedule.  You need to have a strong business plan and be able to present a strong business case to your lenders.  

Financial lenders will assess your knowledge, your capability, and your business proposal. You will likely have to put up personal guarantees for the money you need; this means you have to have assets to back up your guarantees. Unfortunately, not all prospective business owners have the credit rating to qualify with their lending institutions. Business financing and business start up loans are serious endeavors.  You will owe a lot of money and if your business doesn’t succeed, your money and your lenders’ or investors’ money will be gone.

Equipment Leasing For Small Businesses – Seven Steps to Take Before Approaching a Lessor

Your small business is ready to lease some major equipment, say, in the $75,000 and upwards range. But, before even approaching a lessor, take a breath. If you want the process to go quickly and positively, make it easy for the lessor’s credit department. After all, they are the folks you will need to convince. There are steps you can take now to make this process less painful for them… and you.

Understanding How Credit Departments Work

First, realize that credit departments go through checklists in their approval process. The checklist items give the analyst a reasonably complete snapshot of your company and its economic health. Secondly, be aware that, during this time of financial stress, corporate America is even more of a stickler about checklists. Third, analysts love to get all of a company’s information at one time. When information comes in piecemeal, they have to do another review with each new piece of information in order to get the entire financial picture. Finally, while checklists are important, risk analysts also pull on their own experience and intuition when approving credit risks. You will want to put your company’s best foot forward, plus make your own positive, personal impression as an owner.

Taking Steps Now to Ensure Success

Lessors want to know your company is responsible, well-organized, profitable and able to take on additional, necessary debt. If your company is already in reasonable financial shape, taking these seven steps (most of which are on the analyst’s checklist) now will give your business that extra edge.

Here is what you need to do:

  1. Put together a short history of your company. If you have an updated business plan, use that. Topics to address include:
    • Did you start your own business or buy into it?
    • How long have you been in business?
    • What is your market?
    • Who are your competitors?
    • Where do you see your company going? How do you plan to get there?
  2. Either in the short history or separately, include an explanation for the equipment purchase. Topics to address include:
    • Why does your business need this specific piece/brand of equipment? Are you familiar with it? What can it do for your business?
    • Are you replacing existing equipment?
    • Are you upgrading existing equipment?
    • Are you anticipating new business that will require additional equipment?
    • How do you plan to use the equipment?
    • How do you expect to pay for it? If you and your accountant can provide a positive cost benefit analysis, do it. (This will really impress the credit analyst.)
  3. Have three years of audited financial statements prepared as well as a current interim financial statement. These can be cost prohibitive and some lessors may accept reviewed or compiled versions instead; at the very least, have those ready. In rare cases, credit departments may accept company tax returns.
  4. Review your company’s credit history and clean up any issues quickly. Lessors want to ensure you pay your bills on time. Because you are an owner, your personal credit report could be pulled as well, so make sure you are in good shape.
  5. Put together contact information on four or five credit references for your business. Tell the references in advance that you will giving out their information.
  6. Because you own a small company, you may find yourself on the hook as a guarantor. Be sure your personal financial statements are current as they may be requested.
  7. As an owner, you will want to brush up your resume. Credit analysts may ask to see this for a quick idea of your industry experience, as well as a summary of your qualifications, education, training, etc.

In addition, you may be asked to complete a lease application. Having the above information at hand will make that process more efficient. But, if a credit analyst calls you for more information, be quick to respond.

Handling Negative Information

If there are any negative issues (a bankruptcy, bad debt, etc.) that have impacted or may affect your business, prepare an explanation in advance. You will want to indicate how the situation was or will be resolved. Don’t dwell on it, but present it clearly and concisely. Be ready to provide this information with any lease package. Credit analysts will tend to look more favorably on negative information if you present it upfront.

Helping the Credit Analyst Understand Your Business

Depending on the type of lessor, your specific industry, years in business, etc., credit departments might require other information. Again, provide it quickly. They just want to make sure they have a good handle on your company. But, if you have worked your way through the above list, you should be in a great position to quickly put together a professional, attractive, enticing lease package for your prospective lessor. And you have just made it that much easier for a credit analyst to grant approval. They really don’t want to say “no.”

Happy Leasing!

Copyright (c) 2010 Linda R. Prior

Small Businesses Gain Revenue Using Credit Cards

Small Businesses Earn More By Using Credit Cards?

The following is a headline on dated July 16, 2010:

“Small Business Credit Card Use Creates Jobs”

This conclusion comes from a report that they quote at length. This report was conducted for the American Bankers Association by Keybridge Research, an international economics and public policy consulting firm.

The report claims that small business use of credit cards is directly or indirectly responsible for the creation of 1.6 million jobs.

The increase in small-business credit card use from 2003 to 2008 contributed directly to the creation of 592,000 small business jobs and an additional one million direct or induced jobs throughout the US economy.”

Now, most anyone who’s been around the block a time or two knows that research can prove anything, if:

1) you use the right data to prove your point
2) you ignore any data that doesn’t prove your point
3) you get paid enough to get the right results.

The other thing that needs to be done when you read such a report is say, “Who benefits from this?” Could a report done for the American bankers somehow be good for the American bankers who issue the credit cards and earn usury interest rates on them? Could the results be backing up a desired conclusion?

Who’s Zoomin’ Who?

So, who’s zoomin’ who here, to borrow a line from Aretha Franklin. Should small business owners take on exorbitant amounts of short term debt in order to hire people who are long term obligations? Should they be using expensive money to hire employees that will become very expensive assets if the health care bill goes through as it is?

Who will benefit from using credit cards to run their businesses? That’s up to you to decide. And who will benefit the most if you do? You can answer that question too, but it certainly won’t be the small business owner.

Maybe the truth of the matter is that when small businesses go looking for credit, they are running into an ever increasing amount of resistance by the banks to make loans that they consider to be risky. After losing billions in worthless credit default swaps and CDOs backed by worthless mortgages, you wonder how a bank can think that a small business is any more risky than that.

But having been burned by their own stupidity and greed, the banks have now suddenly found religion and don’t want to take any risks anymore. So the business owner is forced to use what ever credit they can find to keep operations running and credit cards, even at their unregulated, criminally high interest rates are a better alternative than closing shop.