Month: April 2018

Small businesses often need to rely on investors or other outside sources of money to continue to fund their vision and grow. Here are some things to keep in mind when applying for and presenting to potential investors:

#1 Show your passion for your project

Rather than focusing on profits or money, investors like to see that the leader of the business genuinely believes in the mission of the group. Investors trust that those who care about the success of the company not because of the money but because of the work itself will be able to pull through conflicts and rough times that may arise in the future.

#2 The people on your team are important

Investors understand that the company is only as strong as its weakest link. It is important to have a team behind you that consists of strong and capable individuals. Finding people with deep industry knowledge will be key in convincing investors that your company has the potential to be profitable.

#3 Keep involved with your finances

While it is recommended that small businesses hire professionals, such as an accountant, to manage their finances it is also important that the owner does not ignore these finances. By updating yourself monthly on your company’s financial standing, you will have a better understanding of what to speak about when meeting with a potential investor.

#4 Don’t be afraid of zero

Instead of seeing a zero on a financial statement as something to hide, see it as a potential place to grow. Often times, it is easier to gain from zero than it is from a small positive number.

#5 Choose investors wisely

When deciding which investors to work with or seek out, keep in the mind that the most important thing to your business is your mission. Find an investor who can align themselves with your purpose rather than your profits. This will create a better relationship between you and the investor and will help your business succeed.

As a small business it can be difficult to get people with the means to support your endeavors onto your side. By following these key items you can increase your chances of obtaining the funding you need to help your company grow!

For more tips and tricks on helping you grow your business, follow Budget Mastermind on LinkedIn or @budgetmastermnd on Twitter!

Budget Mastermind provides business finance solutions to help grow businesses. If interested in our services, visit our website at www.budgetmastermind.com

Starting a business can be a tough task to embark. Owners have several things to worry about and keep track of through this transition, including the company’s finances. Here are a few tips to help keep away from future financial troubles.

#1 Draft and maintain a budget

It is important to see a budget as a roadmap to the future spending of the company. While it doesn’t need to followed down to the tee, it should be taken seriously in order to guarantee that the company has sufficient funds to last. For the budget to be efficient in planning, it should be realistic and account for extra expenses.

#2 Separate business and personal

When starting out it feels simplest to combine business expenses into personal ones, however, as the company grows this will cause organizational issues. By keeping two separate accounts, it will be easier to keep track of how much you are spending on the business and will help a future accountant do his or her job.

#3 Keep track of debt

Most businesses have to take on some amount of debt in order to finance their ventures. It is important to manage this debt, however, and pay it back as soon as possible. Owners should research the different types of credit that can be extended to them or hire a financial consultant to advise them on what is best for their course.

Keeping track of your finances is important to any small business looking to stay afloat for the long run. Be sure to use these tips to make sure you are making the most out of your earning!

For more tips and tricks on helping you grow your business, follow Budget Mastermind on LinkedIn or @budgetmastermnd on Twitter!

Budget Mastermind provides business finance solutions to help grow businesses. If interested in our services, visit our website at www.budgetmastermind.com.

Quantifying your success is a great way to see how your small business is doing in an objective fashion. Two metrics in particular are significant in determining if your company is operating efficiently enough to continue to grow and prosper.

Customer Retention Rate

The first is the customer retention rate, which refers to the number of repeat customers of the company as opposed to one time customers. One way to calculate this is using the following formula:

(Number of total customers – number of new customers)/(original number of customers)

The goal is to keep the retention rate as high as possible, which implies that your business is satisfactory and significant to your customers.

Customer Acquisition Rate

The next metric is the customer acquisition rate, which is how much money a business is spending to acquire new customers. To calculate this, you simply add up marketing and sales costs and divide this by the number of new customers.

It is important to keep your customer acquisition rate as low as possible in order to ensure that you are not losing too much money in order to gain a small number of customers.

Both the customer retention rate and the customer acquisition rate should be used as general benchmarks for your company to measure its efficiency. Different industries have different standards, and so it is important to research the values for typical firm in your industry. These metrics can be used to potentially apply for bank loans or can be shown to investors to advertise the success of your business.

Inflation is often considered a tax because of its detrimental effects on the purchasing power of currency. Small businesses find themselves unfairly targeted by changes in inflation because even small fluctuations can have a large impact on their daily operations.

Inflation Effects

Inflation affects businesses in several ways. First off, it increases the prices of raw materials and the price of labor. Additionally, it decreases demand of products because of increasing prices. Small businesses are particularly affected by a decrease in demand because they are generally price takers, and find it more difficult to push higher prices onto their customers. In some cases, they may even find themselves absorbing the extra costs themselves.

Inflation also plays a role in lending costs. Inflation actually helps those who have already taken out loans, as the worth of each pound that needs to be paid back has gone down. On the flip side, because interest rates will have risen, taking out a new loan will be more expensive.

How to Prepare

Inflation is unpredictable and is out of the control of the everyday business owner. Because of this, it is hard to be completely protected from its effects. Following the financial news and keeping updated on government policies are two ways to stay informed to help predict future inflation. Additionally, maintaining a flexible financial budget and leaving reserves will help to lessen the impact.

Inflation can have detrimental effects on small businesses because they are sensitive to volatility. The best you can do to is to keep up to date on the current state of the economy and remain adaptable in budgeting and planning.

For more tips and tricks on helping you grow your business, follow Budget Mastermind on LinkedIn or @budgetmastermnd on Twitter!

Budget Mastermind provides business finance solutions to help grow businesses. If interested in our services, visit our website at www.budgetmastermind.com.

Your credit score is an important way for lenders to easily judge your credibility as a borrower and plays a large role in their ultimate lending decision. The higher the credit score, the more likely you will be able to open a line of credit at the best rate possible. Here are some tips on managing your score to successfully grow your business:

#1 Be sure to pay all bills in a timely manner and stay within your limits. Although seemingly simple, it is easy to fall behind on payments or overborrow. It may seem beneficial at the moment however these decisions will have lasting effects on future borrowing opportunities.

#2 Keep updated on your credit report and ensure that all the information is correct. Even items such as address can potentially affect your score. It is important that any false statements be amended.

#3 Register to vote at the address listed on your credit report, as lenders use this information to confirm what has been listed. If the information does not match, your application could be determined unsuitable.

#4 Be purposeful in credit applications. Lenders have access to previous applications, and if they see several in a short period of time they will be suspicious or question your capability of receiving a loan.

It is important to remember that credit scores are ever changing and therefore can be potentially damaged or improved by every day decisions. By staying informed and being cognizant of factors that play a role in your score, you can ensure a better borrowing experience.

For more tips and tricks on helping you grow your business, follow Budget Mastermind on LinkedIn or @budgetmastermnd on Twitter!

Budget Mastermind provides business finance solutions to help grow businesses. If interested in our services, visit our website at www.budgetmastermind.com.