4 Tips From Your Personal Finances that Apply to Your Small Business

Business Finances - Small Business Loans - Start-Up Loans - Unsecured Loans

Watching your dreams transform into reality in the form of your new business is quite an amazing thing to experience. However, in the beginning stages, it can be a challenge to launch your business off the ground financially, depending on the capital you already have.

Of course, you may be looking for some great funding options for your business, in the form of a Small Business Loan or a Start-Up Loan. However, before you venture into borrowing investment funds, take a look at your financial situation and make sure you are set up for success in the best way possible. We have some basic tips that you may already be familiar with in regards to your personal finances, but it is important to make certain that you are integrating these principles into your business’ financial strategy.

  • Create a Fantastic Budget

Don’t just create a satisfactory budget, dig deep and really detail out your plan. Managing finances can be incredibly intimidating for a new business owner, but that is why you need a plan, and your budget is just that. Not only will this budget allow you to scrutinize your monthly income and expenditure, but you can also be financially prepared to tackle unforeseen events such as unanticipated expenses or investment opportunities.

You can simultaneously manage your personal and business expenditure by following these steps:

  • Work on your business expenditure: This mainly includes everything from rent, payroll, and office supplies to the interests on loan that you pay off every month.
  • Work on your taxes: You must always determine the tax rate. If not, then you’re likely to find yourself in trouble with the law and of course it’s a situation we will avoid being in at all costs. It is in your best interest to either hire an accountant who knows about the constantly changing laws and rates, or get yourself well-versed with the taxes.
  • Work on your revenue: Once you have figured out the taxes and operating expenses, the remaining amount is considered  “net profit.” From this point, you can make a decision of giving yourself a fixed income, which can be budgeted easily.
  • Enhance Your Credit Rating

Time and time again, we see references to credit ratings and credit scores. There is good reason for all that attention – your credit rating is responsible for whether or not you can receive additional funding for your personal or business finances. With a bad credit rating, you may end up paying high amounts in interest, or worst-case scenario, you will be denied access to business loans. There are a number of ways to enhance your credit rating, mainly including paying bills in a timely manner, and keeping debt as low as possible. You can also reach out to a number of agencies who specialize in raising your credit score.

  • Set Up an Emergency Fund

Once you begin to develop and open your business, you will find that many unforeseen circumstances will arise and demand your immediate attention. Equipment breaks down, contracts fall through, staff become sick… you never know what will be around the bend. That is why you should always plan ahead and prepare for the unexpected. Within your business financial plan, as you would with your own personal finances, you should always have a system in place for setting aside an emergency fund. Whether you use an app to automatically withdraw a small amount from your account, or if you prefer the old fashioned method of stuffing bills in a sock – find a method that is best suited for building that emergency fund.

  • Trim Down the “Debt-to-Income” Ratio

Many consider your debt-to-income ratio as a means of measuring personal finance, where you compare the debt that you already have to your overall revenue. Loan providers will determine your ability to handle and repay funding by this ratio. If you are not sure what your ratio is, you can calculate it by simply dividing the sum total of your recurring debt by the monthly revenue.

The two basic methods of trimming your debt-to-income ratio are; reducing the recurring monthly debt and raising the monthly revenue. Of course, this can also present some challenges, but taking the time to assess your spending will give you the opportunity to search for alternatives in your spending. For instance, if you are in need of an office space, you can look at renting a space instead of buying one. If you are already renting, you can look for more affordable options.  

Business Finances - Small Business Loans - Start-Up Loans - Unsecured Loans

Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.

Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584

Do You Need a College Degree to Start a Business?

Do you need a college degree to start a business - Business startup - Entrepreneurs -  Small Business Loans - Start-Up Loans

So you have this brilliant idea for a business. You may have gone as far as mapping out your business plan, gathering your best networking contacts, and have looked into Small Business Loans. There are many classes to take, YouTube and other online webinars, and maybe you even registered to learn all you could about running a business. I mean, maybe that’s why you’re taking a peek at this blog! The big question remains, “Do I need a college degree to start this business?”.

This debate has been going on for quite a long time, whether entrepreneurs need college degrees to succeed, or whether the time and money spent earning that diploma is better spent launching your business. With college costs and student debt skyrocketing, the newest consideration is whether student debt is preventing would-be entrepreneurs from starting a business.

Drowning in Student Debt

Let’s take a look at the numbers. A recent study shows that a person who graduates with $30,000 in student loans is 11% less likely to start a business than a person who graduates with no student debt.  $30,000 is nearly the average student debt load. As of 2018, 42 million students have a debt amount of $100,000 or less, with most of these borrowers between $10,000 and $25,000. That’s quite a bit of cash!

The best time in your life to start a business has been considered your 20s and 30s. At this point in life, most people do not yet have a mortgage to pay, children to raise, or a spouse to consider in the equation. However, individuals in their 20s and 30s are likely to have looming student debt payments, unlike Generation Xers or baby boomers.

With good solid job opportunities being difficult to find, the young adults today are stuck between a rock and a hard place. Ironically, with more college-level entrepreneurship courses and entrepreneurship degrees than ever, getting a college degree could seem even more helpful for starting a business.

Startup or School?

The choice is different for every person, and highly depends on their circumstances, target industry, personality and so on. If you are looking to become your own boss and deciding whether you should enroll for a degree, consider these factors:

  • What is your Business Concept?

If your sights are set on a business in the professional services industry, you may need to get a specialized degree in your field. However, there are some types of businesses that only require an apprenticeship program and work experience – such as carpenters.

  • What education alternatives do you have?

We live in a very advantageous time, where online education is a click away. From YouTube tutorials to Ted Talks, Lynda and various professional webinars and online workshops, you have many options outside of the traditional college setting – depending on your industry of course.  

  • What other advantages would you get from college?

Don’t be so quick to cross a college education off your list. First examine what opportunities you would glean from college that you wouldn’t have access to otherwise. This includes Professors – amazing resources and networking contacts to have in your book. Peers in similar industries, as networking contacts and moral support. Along with specialized learning materials, the contacts you make in college are some of the best reasons to invest your time and funds into a college.

  • What is your financial situation?

Think about how much money you have available, whether you have capital for either college or a startup and calculate the numbers. Take into account your existing financial obligations and create a picture of your financial state – present and potential. Not only are there loans available for education, but also for Start-Ups and Small Businesses. Maybe in your financial situation, you will find that the best bet for you is a No-Doc Loan? We have many options to help you explore, if that is your case.

  • Is now the best time?

We know that you are excited to start your new business, but don’t be afraid to consider the timing. Some businesses are best launched by a younger person; for others, you need a bit more life experience. Perhaps this is one reason entrepreneurs in their 20s are less likely than older business owners to build high-growth companies, according to a paper Age and High-Growth Entrepreneurship. Would waiting to start your business benefit it in the long run?

Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.

Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584

5 Financial Goals that Every Business Must Have in 2019

5 Financial Business Goals for 2019

At this time of year, businesses are experiencing that “crunch time” where setting the expectations for the new year are important for their roadmap to success. Have you started your planning? Are you a new business owner who is finding it difficult to determine how to structure your financial goals for 2019?

Whether it is personal or business, you should always have financial goals. From savings to investment, finance deals with the idea of having a set of goals to achieve a set target. Financial goals are important both for your short-term needs and long-term aspirations. However, not many realize or understand what these goals should be. Let’s go through some very basic financial goals that will help to improve your financial success in 2019.

1. Big Picture Vs. Details

Essentially, this is micro and the macro. Both of these are important to take into account for your financial strategy and it is important to have goals for them both. These goals help to clarify the direction you are going and reduces confusion. Financial goals can be micro in nature – or very short term. On the other hand, it is important to have macro financial goals that look at long-term objectives of the business – strategy for increasing revenue and margins, as well as cutting costs.

These micro and macro goals should align with your mission statement, and ultimately help to support the growth of your business towards your vision. For example, if the mission statement is to “deliver quality paper products to every household”, the business should be structured in a way that quality paper products are indeed delivered.

2. Control Your Costs

One thing that you are financially in control of as a business, is cost. When your operating expenses are higher than your revenue, you are suffering from a “negative cash flow”. For obvious reasons, the goal should be to find methods that keep you from “burning money” and contribute to a positive cash flow. An excellent habit to form as a business owner is to be constantly evaluating your operating expenses and finding ways to reduce operating expenses. Depending on your business, you can check specifically on unproductive production practices, high cost of shipping, rentals and even employee salaries.

3. Debt Servicing

With any Business Loans that you may have, your business will have debt. It is vital that you service all your debt regularly and pay the amount due every month, quarter or year – as the case may be. If you let interest pile up on debt that has not been repaid, it can quickly become a source of major financial problem. Also, as the case with individual debt, not servicing it on time can impact the credit rating of your business. This is crucial for when it comes time to take out another Business Loan, as good standing will not only improve the chances of receiving new loans, but will also affect your interest rates.

4. Manage Cash Flow

One of the most important goals of your business should be to properly manage your cash flow. For newer business owners, this may be confused with “profit”, but they are quite different. Cash flow is entirely about the amount of money coming into your business versus what is leaving your business in terms of payments. If your business is bringing in more money than is leaving it, you are termed as “cash flow positive”. When you are buying and managing inventory, paying suppliers and employee salaries, these are examples of money leaving your business. Ensure that the proper procedures and inventory management systems are in place to help control your cash flow.

5. Increasing Your Margin

When you are properly managing your cash flow, it is much easier to reach your goal of being profitable as a business. The next step after reining in your cash flow, is to continuously look for ways to increase your margin. This can be accomplished by increasing product or service pricing – though you must first look at your industry market and competitor pricing to see how you are best able to adjust your price points. If you must find other avenues to increase your profit margin, than you can look to negotiate lower costs with suppliers.

Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.

Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584