| Even Small Businesses Need to Understand Financial Planning and Analysis to Grow

Posted in Finance at 9:00 AM by Loftis Consulting

Many business owners mistakenly believe if they open a business customers will automatically come and the business will just grow because of the great service or product that is provided.  This is just not the case. Many factors go into not only building a great business but growing it as well.  One thing that helps large businesses grow is financial planning and analysis (FP&A) which a lot of the smaller businesses lack because of affordability issues or a lack of understanding of FP&A’s role in a company’s success.

What is Financial Planning and Analysis (FP&A)?

FP&A provides the “why” factor in company financial performance.  The financial statements such as the Income Statement tell you the financial results for a period of time but not why the business performed a particular way. This is where analysis of the Income Statement and other financial statements come in.  The FP&A piece is critical to improving business performance.


How Can Financial Planning and Analysis (FP&A) be used in the business?

There are many ways that FP&A can improve performance.  Below are some examples.

  • Inventory Management – Analyze sales of inventory each month to determine the items that are selling best as well as to what slow items to get rid of to free up cash. Can also be used to develop add on services and/or products to increase sales.
  • Department Analysis – Analyze sales and expenses by department to determine profitability by product and department to guide you to achieve higher profits.
  • Make or Buy Analysis – Help to determine if a product should be made in house or purchased for resale to increase profits and/or improve operating efficiencies

Another way FP&A can help your business is through budgeting and forecasting.  A budget is the plan based on some key assumptions at the time the budget was created. A forecast updates the budget based on new information that occurs each month to give the business owner a better picture of how things are going.  FP&A analyzes the differences between actual results and the budget and/or forecast so that real time decisions can be made to keep the business on track.  This step is key for the business to survive in the long-term.

If your business isn’t hitting its targets or does not have a plan in place, give Loftis Consulting a call at (312) 772-6105 to put financial planning and analysis in place for your organization.  To learn more about Loftis Consulting visit us on the web at LoftisConsulting.com.

| The Biggest Technology Risks in Modern Business

Posted in Finance at 9:00 AM by Loftis Consulting

Modern businesses face a ton of unique challenges that the businesses of the previous generation didn’t have to consider. The world is now so tech-driven, not least of all in modern business. It’s not literally impossible to imagine a business that doesn’t use modern technology. We can picture an office without strong Internet connections, printers, or even computers. But we’re not exactly imagining a strong and stable business now, are we?












Companies no longer really have any excuse. The world is too driven by computers and Internet connections for a modern tech business to skimp out on these things. We can’t just match the technology that the average consumer is using. In modern business, our technology has to be even better. We have to stay ahead of the game in order to adequately please customers and investors.

So what are the biggest risks and downsides in today’s tech-oriented businesses? In this article, we’ll be running through some of the bigger problems areas. You may even find some practical advice about lowering risks and costs! Speaking of which, let’s begin with…


The Cost

This is the first problem to become apparent for a startup. We no longer live in the world of Mad Men. We can’t just hire office space, move in the desks, get a load of paper and a few typewriters and get going. We have to invest money – and a lot of money at that – into getting our offices fitted out with the latest tech hardware. It’s hard to imagine there being one employee in a modern office who doesn’t need a computer of some kind, be it a desktop or a laptop.












How much you’re going to spend really depends on what you’re doing. The price is going to be relatively high, whichever route you take. You can’t just give employees computers that aren’t up to the modern scratch. But it doesn’t mean you have to blow all your capital on Alienware computers, either. Determine exactly what it is your company is going to be doing. Are you going to be working mostly with spreadsheets and word processing? Then you can afford to spend a little less when it comes to processing power and graphics capabilities. But if you’re starting a company that deals with animation or video game development, then you can’t cut corners. You need machines that are going to be absolute beasts.

The cost is going to depend heavily on what system you’re actually planning to us. If you want to use Windows, then you’re in luck. PCs are more reliable, more pliable, and more affordable than its main competitor. That, of course, is the Mac. Some companies may find themselves requiring Macs. If you’re in mobile game development, for example, you’ll find it hard to get by without using Mac to develop for iOS devices. Your average Mac costs a phenomenal amount more than a more technologically-advanced PC. If you have the choice, do not believe the myth that Macs make things any easier for business. A popular myth is that creative endeavors are more achievable on a Mac. Do not believe this. Unless your company specifically requires Macs to do the job, avoid the unjustified extra cost.













Office security used to be so much easier, am I right? If your doors were locked and your security guard looked scary enough, you were probably protected from outsiders. As for people on the inside? Well, we may have the advantage in the modern era. With permission settings, it’s probably easier to prevent leaks than it was in paper-oriented offices.

That being said, the issue of security in general has become more costly, more time-consuming, and more important than ever. Modern tech companies are at quite a large amount of risk. As discussed previously, the cost of equipping a modern office is pretty high. Not only does this cause the initial problem of it taking a sizable chunk out of your capital. It also means that your office is now loaded with high-quality and very valuable equipment. And that’s exactly the kind of thing that many criminals want to get their hands on.













So now the risk of losing expensive equipment, as well as the work that is being kept on that expensive equipment, is higher than ever. So we have to really beef up our physical security to compensate. Thankfully, most offices these days already come equipped with the security tech to make this feasible. When you rent office space, you generally don’t have to install things like keycard functionality or alarms yourself. These things should come with the office.

Be sure that you create a culture of security among your employees. Keep them vigilant. If they see anyone unfamiliar in the office, they must know what action to take. Everyone should know how to lock the front doors at night. If everyone has security in mind, then it will be harder for anyone to come in and start taking your stuff!

Of course, we don’t just have the physical side of security matters to consider. Criminals aren’t just trying to physically access your office and equipment. I’m willing to bet that you’ve heard of cybercrime and its mortal enemy cyber security. So much business is done over the Internet these days that it’s become easier for outsiders to access our sensitive information. That is if you’re not adequately prepared. The world of cybercrime seems pretty dizzying at first. There are so many different crimes and criminal methods to consider. There’s hacking, spyware, key logging, rootkits and full-blown viruses. Some people will leave it out of their mind. After all, computers are generally sold with firewalls and antiviruses, right? Shouldn’t that be enough?














Quite often, it isn’t. You need to be on the lookout for more tactics to use in the good fight against cybercrime. Find some virus protection tactics to use. Make sure people can’t access your data by ensuring that your employees only connect work devices to the secured network you use in the office. It may be tempting for them to use local and public Wi-Fi connections if things in the office run a little slow. But unsecured Wi-Fi connections are, well, unsecured. They’re dangerous and could allow someone entry to your work devices if used.


Complexity of Use

One of the drawbacks of technology getting more and more advanced is that sometimes it gets more difficult to use. This isn’t always the case. Thanks to the competition of Apple, many companies want to make their products are user-friendly as possible. But ease of use sometimes means that certain advances fall by the wayside. What this means is that companies who want really good technology – and a lot of it – risk alienating some of their employees.

Of course, if you’re working in a tech company, then you should be able to expect a certain level of tech-literateness from your employees. Many job adverts for modern companies require the applicant to be well-versed in Word and Excel. And if you’re working directly with code, then most employees will probably have a background in coding and computer science. But it’s not just basic use of the hardware you have to worry about.












Often, the best results your company can get is through expensive software. This software isn’t something your average computer user is going to engage with. This makes it less likely that any given applicant will have experience in it. This means it may be best to ensure not every important document is accessible only via software; paper documents in pocket folders are still useful in the modern office! This also means that you need to invest time into giving them training. This will also need to occur if you ever switch the software you’re using. And if you ever decide you want to change the hardware you’re using, then you’ll also need to provide training for that. With all this extra training you may need to consider, you’ll have to be careful about when and how you hire employees.

We’d probably all prefer it if we could trickle in employees one by one as we need them. This is, in fact, how many tech companies do it. If the person who is going to be the line manager for a new employee has time, they will give them the necessary training. But if much training is required and you’re hiring people one by one, then that creates a massive time commitment when it comes to training. This may mean that you’ll have to hire pools of employees; several at once so they can be trained in one go.













Do not assume that everyone is as tech literate as you are. With the software landscape always changing, you need to ensure that your employees stay on top of things. Of course, they also have the actual work to consider. This means you or a hired specialist will have to take on the burden of managing general technology and training. It all needs to be as smooth as possible to minimize disruption to an employee’s work day.

Keep all of these things in mind as you go forward with your tech-minded business. Modern technology has made so many things easier, but that doesn’t mean everything is going to be a breeze!

Part of the role of a Controller or CFO is to ensure the protection of the assets of the business. These assets could me physical such as computer equipment or data such as customer credit card information.  Don’t have a CFO or Controller? Loftis Consulting can help by performing an assessment. Give us a call today at (312) 772-6105.

| 5 Tips for Getting a Business Loan

Posted in Business Financing at 9:00 AM by Loftis Consulting

Most small businesses will need an investment of capital at some point. Whether it’s to put more money into a marketing plan or push your business to go further and make more profit, business loans aren’t a must have. However, getting a business loan depends heavily on how you present yourself and the business. So, when you need money from the bank, here are a few tips on how to get it.


Demonstrate Your Reliability

If you’re an already established business, your bank will need to know they can trust you with their money. This means you’ll have to demonstrate how well your business manages money. It’s important to know your business finances inside out before stepping into that meeting. That way, you’ll be able to show how your business makes a profit and how you plan to stay in business for the foreseeable future. If your business looks like it’s falling apart at the seams and you need the money to survive, it’s unlikely you’ll be able to secure a loan.













Be Specific

This is especially important for businesses just starting out. In order for a new business to get a bank loan, the bank will need to see a business plan. It’s no good just saying your building a manufacturing company when you can say you specialize in custom sheet metal fabrication. The more specific you can be, the more likely you’ll get the money. Businesses that provide a niche product or service are unlikely to have as much competition from other businesses. Therefore, if you have the only business of its kind in your area, you’re likely to get all the custom and high profits.


Why Should You Have the Money?

It may not be a question that you’re asked, but it should certainly be one that you think about answering. The more reason you can give the bank to lend you money, the better your chances. If a bank is on the fence about whether or not to lend, give them as much information as possible. Outline your future prospects so the idea of investing in you becomes attractive. Banks know that you often need money to make money, so demonstrate how you’ll use the money to make a profit.

















Stay Local

If you’re a small town business, don’t go to a national bank. It’s likely that national banks will have better prospects than you, so you may find that your business is overlooked. A local bank will have more time to consider your needs, and they look better if they’re investing in the community. It’s also likely that you’ll know someone in the bank who can put in a good word or is willing to vouch for your reliability.


Keep Your Own Finances in Order

There may be times when banks or lenders look at your personal finances before agreeing to lend. If you’ve got missed payments and piles of debt on your record, they may be swayed against lending. Try and keep your personal finances in order to avoid disappointment.

| 4 Reasons Why You’re Not Making A Profit

Posted in Finance at 1:00 PM by Loftis Consulting












Making a profit isn’t just something that happens overnight, it can take a lot of time and effort to get back what you’ve put out. Here are some reasons why you may not be making a profit.


Wrong Business Venture

Your business idea may sound or look great, but that doesn’t necessarily mean it’s right for you. We all have our different areas of expertise that we strive in more than others, so it’s important to make sure you’re doing something that uses the skills you have; otherwise you’ll find yourself in a tricky position and may not be able to continue.

Sit down and write out all your ideas, and why you like them. Then take into account your experience in that department, the financial costs, and whether you have the right resources to run the business successfully.


You Won’t Sacrifice Your Lifestyle

You can’t expect to build yourself a profitable business that you are able to live off comfortably, all while going out on the weekends, watching all your favorite tv shows in the evenings and working the same 9 to 5 hours as your friends and family – that’s just not going to happen. You are going to have to create a new weekly schedule around your business, as a pose to your wants. This doesn’t mean you can never go out with your friends again – but you need to prioritize in a way that will make you money.


Not Managing Your Accounts Properly

Dealing with numbers is the most obvious thing when it comes to making a profit, and it all begins within your account. If you’re not able to manage correctly and understand what’s going in, and what needs to come out, then you can expect a difficult ride. For example, when you send out an invoice to your customers, and they have paid, that doesn’t necessarily mean that you receive the money straight after – sometimes you can wait up to 90 days for the payment to be cleared. But with debt factoring you can get the payment a lot sooner; covering the gap of waiting.

Little things like this will really make a difference so should be taken into consideration, and if you’re not any good with money, hire in a bookkeeper so you know you’re in good hands.


Bad Customer Service

If you ‘can’t be bothered’ to put in that extra time and effort to give your clients the best customer service possible, then there’s really no point in even owning a business, as this is the key to success! If you don’t have happy customers, how do you ever expect to make any money? It starts with one – if you go out of your way to treat someone with the utmost respect and give them the attention they desire as a consumer – that one person will tell their friends and family, and one of the family members may tell their friends, and so on. So think of the bigger picture at all times. It’s never just one customer; it’s a whole bunch of potentials po

| Ways to Improve Your Business’ Debt-to-Income Ratio to Get a Bank Loan

Posted in Business Financing at 9:00 AM by Loftis Consulting

It makes no sense to begin a loan process if going in you don’t know or understand the key metrics lenders use to determine to who they give credit.  The debt-to-income (DTI) ratio is an important metric used by banks and other lenders as one factor in determining your business’ ability to pay monthly debts in order to extend credit.  The formula is as follows:

DTI = Monthly Debt Payments/Monthly Pre-tax Income

Make sure you include the projected monthly debt payment for the needed loan in your calculation.  The lower the DTI result the better; however, it will vary by industry since some businesses have to take on more debt than others in order to operate such as manufacturing companies versus professional service firms.

Once you have determined your DTI, and if it is too high for a lender to give you a loan then you will need to find ways to improve this metric before applying for the loan.  This will take time and discipline.


Steps in Improving DTI – Expense Control

  1. Review expenses and cut out any expenses that do not go to the heart of the business and any extras. It may be a sacrifice in the short-term but remember the goal is a loan.
  2. Review expenses and remove any one-time non-recurring expenses. You want the bank to focus on normal day-to-day expenses.  Major one-time costs could negatively impact the calculation.
  3. If you know that there are some major expenses coming up delay them until after the loan process has been completed since any major expenses will unfavorably impact DTI.
  4. Recalculate DTI based on steps 1-3. If not where you need it to be think of ways to improve monthly pre-tax income besides expense control such as improved sales.


Steps in Improving DTI – Improve Sales

  1. Review length of time it takes to sell inventory. If it is over your industry average look for ways to move it faster. For super old inventory put it on sale to improve short-term cash flow.
  2. Perform data analytics on customer base in order to target sales better. Loftis Consulting can help analyze your sales data for improved results.
  3. Get rid of slow moving product and increase amounts available to sell for products that sell easily.


Steps in Improving DTI – Other Tips

  1. Lower the loan amount requested if possible. This way you meet the DTI guidelines and if the loan investment will improve sales or make your operations more efficient you can get a future loan as the savings or increases sales are realized.
  2. Shop around for a bank that caters to your industry. An industry-specific banker will likely have more flexibility on the DTI requirement since they understand your business. Most banks want a DTI no higher than 36%.

Need help getting your financials in shape for a loan submission or need assistance with expense management and increasing profits, call Loftis Consulting today for the CFO Services.

| Why You Must Insure Your Business

Posted in Finance at 9:00 AM by Loftis Consulting












Running a business comes with inherent risks: an employee could get injured on the job; a natural disaster could destroy property; or a client could file suit, alleging a contractual breach.

For those and other reasons, it is important to protect your assets, both business and personal. One of the best ways to do that is to make sure you and your business are adequately insured.

Here are our ten top reasons why your business needs insurance.


  1. It’s the Law

According to the SBA, the law requires businesses with employees to provide particular types of insurance: workers’ compensation, unemployment, and disability, depending on the state where the business is located. Failure to carry legally required coverage could result in fines, civil or criminal penalties, exclusion from public contracts and “cease and desist” orders — all of which could cost you far more than the price of an insurance policy.


  1. You Could Get Sued

We live in a litigious society. In the event of a lawsuit or liability claim, without insurance, your business could fold. One accident. One broken contract. One disgruntled employee, and it’s over. Even if you win the suit, you could go out of business due to the cost of legal defense. Rather than worrying about what could happen, liability insurance can give you peace of mind, enabling you to concentrate on what truly matters – running a successful business.  I personally have been sued regarding business property that I own and cannot tell you how much peace of mind and safer I felt regarding my family’s financial future with landlord insurance.


  1. Keeps Your Business Up and Running

What happens to your business in the event of a natural disaster, such as an earthquake or flood? Business insurance covers loss of property – buildings, equipment, etc. – but what about the money you lose during the time your business is closed? That’s where Business Owners Insurance (otherwise known as BOP) plays a critical role. It can help a business survive a serious disaster by protecting against loss of income.

The way it works is that the insurer pays you the income your company would have made while it was out of action (assuming it’s due to a covered loss). BOP also compensates for normal operation expenses (e.g., rent and utilities) that you would have otherwise incurred during that time. Some companies not only choose to insure lost income but include protection to pay employees, for up to 12 months, so this is something to look out for.












  1. Makes You Look Credible

Here’s a reason you may not have thought of: having insurance makes your business look credible. Good business or commercial insurance, which you can get from a company such as http://equifyllc.com/equifyinsuranceservices/, shows your prospective clients and customers that you’re a safe bet, and that if anything goes wrong with the work you do for them, you have a way to compensate.


  1. Protects Your Employees

Your most valuable asset is not the products or services you offer, the equipment you take so much care to maintain or even the brand you struggled for years to build. No, your most valuable asset is your employees, and it pays to protect them in the event of an accident.

The law requires that you carry workers’ comp, but you should also consider offering disability coverage, even if you have to charge your employees for a portion of the cost. Protecting your employees’ interests is also a good way to protect yours against lawsuits or liability claims.


  1. Covers Acts of God

In insurance language, an “Act of God” is any accident or event not caused by human hands. Floods, tornados, hurricanes, and fires caused by lightning all qualify. Two types of property and casualty insurance protect against such loss: all-risk and peril-specific. All-risk policies cover events except for those expressly mentioned. Peril-specific policies list particular risks and cover fire, floods and other specified acts of God.












  1. Guards Human Assets

As the owner, you’re tasked with keeping the business running. But what happens if you stop “running” because of a heart attack, serious accident or some other unfortunate circumstance that takes you out of the picture for weeks, months or even years?

Company-owned life and disability insurance coverage provide payments to cover the loss of income you generate. In the event of your death or disability, it provides funds for the purchase of your interest under a buy-sell agreement. You can also buy such policies, referred to as “key man” or “key person” insurance, to cover the disability or death of a valued employee.


  1. Helps to Attract and Retain Employees

Having insurance isn’t just about protecting your business in the doom and gloom scenarios. It can have the positive benefit of attracting and retaining qualified employees who will show loyalty to you and your company for years. Second to salary, job seekers look for benefits packages that include life, health, disability and long-term care insurance. If you don’t offer these perks, you may lose a good employee to a company that does, or not even attract the right ones in the first place.


  1. Contracts May Require It

When it comes to contracts and insurance, several variables can come into play:

  • If you rent or lease your business facility, you may need to carry insurance, as the landlord’s policy may not cover it.
  • If you borrow money to finance buildings, equipment or operations, the loan agreement will likely contain an insurance requirement.
  • Client contracts may specify that you carry insurance in the event things don’t go as planned.


  1. Because You Cannot Predict the Future

No business owner has a crystal ball hidden in a closet that can predict what might happen in the future. It would be excellent if natural disasters, injuries on the job or lawsuits never even occurred, but no one can guarantee that such things won’t happen. For that reason alone, it is best to be insured.

With the proper business insurance, small business owners can achieve peace of mind and focus their attention on what they do best — operating a productive, profitable and personally rewarding business for years to come.

| Investing in Commercial Real Estate? Avoid These Errors

Posted in Finance at 9:00 AM by Loftis Consulting












Investing in real estate is often said to be where the all the money is. While the reliability and profit margins of real investments is often overstated, there’s no denying that it can be an extremely lucrative area of investment. But what if you’re investing in commercial real estate? In that case, your returns could be even higher.

But it’s not exactly a walk in the park, nor is it all that similar to residential real estate investment. Many people who have found great success in the latter have moved onto commercial real estate, hoping to parlay their winnings and achieve even greater success. They often find themselves surprised by how different the two can be!

So it’s important not to go into this with too many assumptions. There are a lot of mistakes you could potentially make. We’re going to take a quick look at some of the biggest errors you can make in the world of commercial real estate investment.


Not Marketing the Property

There are loads of new businesses being created every day, and a lot of them need an area in which to do their work. So surely people are going to come to offices you’re investing in without you having to put in much effort? Wrong. Not only do you have to consider the fact that rival commercial real estate investors are engaging in marketing that will see their properties listed way ahead of yours; you also have to remember that more people are choosing to run businesses from home than ever. The right marketing can help combat both these problems. These properties are definitely not going to sell themselves!












Neglecting Maintenance

A lot of investors in this area make the mistake of neglecting the maintenance needs of their properties. People tend to know that residential real estate needs a lot of maintenance and repair, but they may also assume that this isn’t that important when it comes to commercial properties, perhaps because people care less about their offices than they do their homes. This is a mistake. Ensure that all the properties receive the maintenance they need. If the building as a whole needs work, then ensure you’re hiring the right experts. A commercial roofing contractor, has the expertise to maintain and fix a roof that technically covers several properties.


Assuming All Prospective Tenants Are Wealthy

When people think about business owners, they often imagine very wealthy people; the kind of people who sit with their feet up on their desk all day, lighting cigars with burning $100 bills. The truth is many of them are people who have only owned their business for a couple of years and have perhaps not even turned much of a profit on their business yet. So if you’re thinking of jacking the rent of your properties up to staggering prices in order to get a healthy piece of all that business wealth, then you should probably rethink your approach. While you should also take care not to let yourself get a hard bargain on the lease, trying to squeeze these business owners is simply not a great strategy.

| How To Kick Those Killer Financial Issues For Good

Posted in Finance at 1:00 PM by Loftis Consulting













Finance is one of those areas of business you either love or hate. On the one hand, it relates the money you make, but on the other, it can be a whole lot of hassle. Every business has their money issues, whether they’re good or bad. Regardless of what those issues are, they can be crushing on both a business level and emotional one. But, there aren’t many financial issues that can’t be resolved. So, if you’re suffering from your finances big time, here are a few ideas on how to get them back on track.


Not Being Paid

In business, we all need to be paid. So, when you find yourself chasing accounts contacts every single day and getting nowhere, you can often feel at your wits end. But, luckily for us all, you don’t have to write that invoice off as a no go – you can see it being paid. Invoice factoring can make that happen. If you’ve not used this service to get your invoices paid before, you might want to compare the best invoice factoring companies and find one that will be suitable for you.



Budgeting is highly important in life and not just business, so whenever you find yourself overspending, you need to reassess your situation. What can you do to claw it back? Do you need to cut out some of your fixed costs? Do you need to work on pushing your income? Either way, when you find yourself constantly going over budget, you’re going to need to work on cutting out some bills until you can start to make a profit again – especially if your business is firmly established and you have been making a profit in the past.


Being Held Back

Sometimes, you can find that your currently financial status is stopping you from growing as a business. If your cash flow is okay, and you’re making money, but you don’t have the kind of capital that you need to expand, you can find it in other ways. Whether you look for investors or even sell some shares, now’s the time to stop letting your finances hold you back from something bigger.


Abused Expense Accounts

Unfortunately, you will find that some people do abuse their expense accounts across many areas of business. When you’re the person doing the spending, you can often think that it’s okay for the company to pick up the check, but sometimes, it just has to stop. If you’re in financial difficulty and those expense accounts are creeping up, it might be time to cut them altogether, the reduce the amount you hand out or even put a monthly or yearly cap on them.


Increasing Rates

And then there are the areas of business finances that keep on creeping up without your control. Some of your supplier rates or even your fixed costs that allow your business to run can increase from time to time. If these increases cut into your profit, you might need to think about doing what you can to brush up on your negotiation skills and keep them where they are for a little while longer.

| The Best Ways to Fund Your Business Expansion Plans

Posted in Business Financing at 9:00 AM by Loftis Consulting

Most business owners have big plans for the business and where they want it to go in the years ahead. That’s perfectly normal, but how are you going to find the money to fund all those plans? It’s easy to come up with plans for a business expansion, but it’s never so easy to actually fund them. It’s a problem that many business owners run up against. However, there are plenty of interesting ways to generate the money you need for your expansion.


Selling Shares

Selling shares is a great idea if you’re willing to relinquish a small amount of control over your company. You can still make sure that you own the majority of the company’s shares, meaning you retain control. Every share you sell will raise a small amount of capital. If you sell enough of them, and your share price is fair and reasonable both for you and you the stock market investors buying them, you could raise a considerable sum. This money can then be used to grow your business and take it in the direction you think is best for its future.











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Invoice Factoring

Does your business have a lot of old invoices that remain unpaid? It’s a problem that is all too common for businesses. However, you can get around this problem by using those invoices as a source of funding for your business. This is called invoice factoring, and it’s something that more and more small businesses are starting to make the most of. There are plenty of external companies that can help you out with this kind of funding. Just do some more research into it, and learn as much as you possibly can about it before making your final decision on the matter.


Appealing to Investors

Another way to get money from investors is to appeal to them directly. This involved presenting your idea and information about your business to a small number of investors. They might be investors who have a particular interest in your market sector. Or they might be venture capitalists looking to see a relatively fast return on their money. You need to be professional, have some strong ideas, and be able to present them in a coherent and appealing way if you want to make a big success of this. It’s not easy, but it can be done if you take the right approach.










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Reinvesting Profits

If your business is looking to expand and branch out, it must already be making money. So, why not start reinvesting some of the profits that the company is currently raking in? Rather than paying yourself more or paying out dividends to investors, you could use that money to take the business further and expand it in the way you want to. Of course, this only works if your business is in profit and managing to more than cover all of its existing costs. But if that’s not the case right now, maybe expansion shouldn’t be at the forefront of your mind anyway.
















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| Don’t Fail To Prepare For These Potential Cash Flow Issues!

Posted in Cash Management at 5:00 PM by Loftis Consulting

New business owners are often taken by surprise by unexpected cash flow issues. Problems of that nature can cause serious concerns for any company. The last thing you need is to discover there isn’t enough money in your accounts to pay your suppliers. When that happens, you have to ask for an extension. Before you know it, you spiral into a financial situation that’s difficult to resolve. With that in mind, we wanted to offer some advice today that you can use. Hopefully, the potential issues mentioned on this page will give you a heads up. If you prepare for these events and keep extra cash in your accounts, you can weather the storm. So, pay attention, and put this information to good use as your business grows.












Credit Card Chargebacks

Chargebacks occur when someone calls their credit card company and asks them to reverse a transaction. That can happen when one of your customers isn’t happy with their purchase. It can also happen when someone just wants to play games and cause trouble. It’s a major issue for you because it means money can leave your accounts without notice. The credit card companies won’t contact you in mind instances. They will just send the cash back to the original account. Chargebacks are a real pain for business owners just starting out. For that reason, it makes sense for you to keep all funds in your bank for at least a couple of weeks after each sale. That way, you won’t miss the money too much if it disappears. Don’t rely on that income until you’re 100% satisfied the customer received their item and you avoided any problems.













Employee Injuries

Like it or not, someone could become injured when working for your company. When that happens, they will often make a claim for compensation. The money is designed to cover their loss of earnings and any medical bills. The process can become costly because you will have to pay for legal representation. You will also lose the worker until they recover, and that means your team is one man down. To limit the number of times that happens, you must place emphasis on adequate health and safety precautions. You should manage to avoid all workplace injuries if you get things right. As you’re just starting out, you might require some assistance. Thankfully, there are professionals you can pay to come to your office or warehouse and perform assessments. They will then offer advice on the best course of action.


Fines from the Government

Depending on the nature of your operation, you might have to pay government fines at some point. That is especially the case if your processes are deemed to harm the environment. There’s a big push towards green technology these days. So, maybe you should consider changing the way you work? Whatever you decide, make sure you research the potential fines you could encounter ahead of time. That way, you can ensure there is always enough money in your accounts to cover them. Of course, the best thing to do involves avoiding the penalties altogether. So, now is the time to perform as much research as possible. Regardless of your business model, there are always ways in which you can protect your interests. Even if you have to spend money upfront, it’s better than getting into trouble with the authorities.













Other Legal Issues

There are a million and one different legal problems that could affect your company. Considering that, you need to build a relationship with an experienced lawyer. If you do that, they will often let you pay for their assistance in monthly installments. That should stop the expense from affecting your cash flow too much. At least you will know how much you have to pay at the end of each month. There might come a time when another business owner claims you’ve infringed on his copyright. Court cases of that nature can take a long time to reach their conclusions. So, you need a reasonable specialist who won’t expect the payment upfront. Of course, you still need to keep a close eye on how many hours that person works on your case.

Now you know about some of the most common cash flow issues, we hope they won’t take you by surprise. There are lots of other things that could affect your operation. However, the instances mentioned on this page are by far the most likely. With that in mind, learn from the advice, and keep as much cash in your accounts this year. Failure to do that could mean you end up back at square one. That would be a shame after all the effort you’ve made thus far.

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