Category: Finance & Capital

Article Contributed by John Baird

However long you’ve been trading and whatever stage of development your company is at there is always plenty to be gained from improving the way you organise your finances and financial processes.

Here are 6 ways in which you can look to do precisely that:

1 – Set realistic targets

Having clear goals set as benchmarks to aim for can help to keep motivation levels up in any context and small business operations is no exception. The key here is to set financial targets that are challenging but realistically attainable over a period of time, whether it’s a month, a quarter or an entire year’s worth of operating you have in mind.

2 – Speed up your payment processes

It is easy for small business bosses to be distracted in all manner of ways while going about their work on a daily basis but one issue that really shouldn’t go overlooked is that of payment processes. You’ve worked hard to secure sales and deliver a quality service but unless you have a proactive and reliably swift invoicing policy in place then all that effort can easily come to naught.

3 – Do more of whatever’s working

A key skill as a small business boss is identifying what you’re operation is doing well and where things are not going quite as well as they might be. Your financial accounts are often as good an indicator as any as to where the true strengths of your business really lie. It will be tempting at times to worry more about what you are not doing well as a business but doing more of what delivers profits is generally a more effective policy to pursue.

4 – Create a detailed financial plan

Having a few headline goals as far as your company’s finances are concerned can be a great motivation but a comprehensive financial plan will generally help inform decision-making processes on a day-to-day basis. Whether or not you’re the kind of person who loves pouring over financial figures, any time you spend analysing your accounts and assessing your company’s progress is likely to be time well spent.

5 – Keep learning

From the perspective of small business bosses in any field, gaining a keener understanding and appreciation of financial matters can be a huge advantage and one that makes a real difference. Whatever age or stage of your career you’re at, learning as much as you can about the financial side of running a business can only make you a better entrepreneur and improve the prospects for your company.

We all know that finances matter a great deal in the context of small business operating and even minor improvements in the way you manage your money can be crucial. With that in mind, if you can follow the above tips, you should soon see your company’s bottom line heading firmly in the right direction.

Author bio
John Baird is a personal finance and insolvency expert from Scotland Debt Solutions. He specialises in advising people on how to manage their money and deal with their personal debt problems.

The start of the year is the perfect time to embrace new habits and to set goals. Turning entrepreneurial ambitions into a thriving small business is not just a matter of daring to try, but also knowing how to make the most of a limited budget. Spotcap, the fastest online credit platform, reveals six essential steps for building a small business on a budget.

1. Match exceptional skills to market opportunities

Building a business is about both being passionate as well as realistic. Matching individual skills to current market opportunities is essential to avoid hastily entering the wrong market or career path. Often, individual skills are those that friends and family ask for if they need to get something fixed. Take the time to learn about your potential customers, and build your business plan around their needs and desires. The best market opportunities are often the services that people don’t want to do themselves, e.g. gardening, cleaning and even bookkeeping.

2. Boost your business plan with free expert advice

A strong business plan can set a business on a course for success from the start. Converting your idea into an actual business plan allows you to test drive it. Governmental organizations and administrative bodies provide free expert advice for entrepreneurs. Even the most successful business owners, such as young entrepreneur Evan Spiegel, who developed the mobile app Snapchat, know how beneficial it can be to get a different perspective on things. Even if you are running your business alone, find someone who can study your plan objectively to point out possible weaknesses and highlight areas of strength. It’s always a good idea to talk to people who disagree.

3. Be a soldier of finance

From now on, it’s all about cash. This might sound like a no-brainer, but many of today’s digital heavyweights started off without a monetization strategy in place. Twitter, Facebook and Instagram are just a handful of examples and there are countless other companies out there building up free user bases, hoping that they’ll eventually turn into a lucrative source of money. If you want to start a business on a budget, you have to earn money from day one. Determine your expenses and rank them. Calculate expenses for each step and keep in mind the impact on your business.

4. Embrace alternative funding opportunities

If you are certain that your product will attract broader interest, approach websites like Kickstarter and Indiegogo to set up a crowd funding campaign. Create a campaign which sets a tone of confidence and focus on winning over the people who matter most to your business. Crowdfunding allows a wide pool of investors to approach entrepreneurs with little restrictions. If your business is already established then you can also seek other funding opportunities to make strategic investments. Online business lending platforms often grant access to funding within hours and cater especially to the needs of small business owners.

5. Back to basics

Renting a fabulous office with all the bells and whistles is out of the question. Starting a home-based business should be your go-to move. An overpriced cubicle in an overcrowded co-working space should not stand between you and hard work. Unavoidable expenses should be kept to a minimum. Compare expenses, identify the areas where you can trim costs and seek alternatives. Make adjustments as needed, especially when you notice that you are spending more than your budget permits. Try to optimize payment terms with suppliers and negotiate benefits.

6. Chat it up

To achieve brand awareness, friends and family can support you with word-of-mouth advertising. With little capital to invest in marketing, your business needs to be visible online to receive first client inquiries. Promote your campaigns with social networks, like Facebook, Twitter or LinkedIn, where free publicity is waiting to be grabbed. This gets the ball rolling. Reach out to local journalists, bloggers and other influencers to boost your visibility. Offering free initial consultation meetings is a good way to convince potential customers. In smaller markets, getting on friendly terms with the competition can also be a good step for your business.

About Spotcap:

Spotcap enables small business owners who have been operating for more than one year to grow their business by providing fast and flexible financing. The company has developed a sophisticated and dynamic decision process assessing the real-time performance of businesses to grant short term loans. Spotcap was launched in Madrid in September 2014 and is led by Toby Triebel and Jens Woloszczak in Berlin. The team – currently consisting of 40 credit and online experts – is expanding its operations geographically. Spotcap is backed by Rocket Internet – the world’s leading global internet platform outside of the US and China.

Read more about Spotcap: www.spotcap.com

Article Contributed by Aline Vedder of Spotcap

Good financial management can mean the difference between setting your business on a course for success and watching it become insolvent. Spotcap has compiled a checklist with the most crucial advice for successful financial management.

1. Keep up with your finances

Small businesses often lack a clear overview of their daily, weekly, and monthly numbers and financial trends in their organization. Solid cost accounting is crucial to track your company’s cost and the basis for getting a clear view on your cash position. Understanding your liquidity position is paramount to managing your finances effectively. Spend the necessary time keeping track of your cash position, and if you lack the financial skills, hire an accountant. 

2. Take advantage of government incentives

Most countries offer some form of incentive to attract and foster startups; however, these benefits may vary from country to country. Ireland, for example, has attracted many European companies with grants, a low corporation tax of 12.5%, seed funding, and tax reliefs. Startups should contact their relevant government agency for information on the financial support available to them. It is well worth going through the lengthy registration process for a government grant, because this can be a crucial first source of financing.   

3. Seize different funding opportunities

The reality is that most SMEs will experience financial turbulence at some point and struggle to expand their business. Many studies report that access to financing remains one of the most critical, if not the foremost, constraint faced by SMEs. However, online platforms and financial technology have fundamentally changed the application process for loans. Small business loan platforms, crowdfunding, and angel investors enable entrepreneurship at an early stage. Leverage the opportunities of short-term loans to seize investment opportunities.

4. Keep costs low

You received funding? Congratulations! The work doesn’t stop there; it is important to remain cost-efficient and invest the funds you have strategically. Bill Gurley and Marc Andreessen recently criticized the fast cash burn in the IT industry, which might ultimately lead to another IT bubble. Entrepreneurs should heed their advice and make good use of their funding with good budgeting processes. Having an oversight of your cash position helps you identify where you need to cut costs.

5. Use apps to organise your finances

Apps like Expensify, Chargify, and Indinero are simple, useful tools to help you keep your finances in check. With these Apps, you can convert photos of your receipts into neatly formatted reports, manage online product subscriptions, track your current financial situation, and receive budget suggestions for the future by integrating information from your bank and credit card accounts.

6. Restructure your debt

Approximately 40.000 small businesses close their doors every month in the U.S., mainly due to the enormous burden of debt they have accumulated. Startups that find themselves in financial straits should try to negotiate preferable terms with their creditors and set up a plan to get out of the debt trap. Additionally, companies should constantly be on the lookout for different financing opportunities to reduce the reliance on single sources of debt.

About Spotcap:

Spotcap enables small business owners to grow their business by providing fast and flexible financing. The company has developed a sophisticated and dynamic decision process assessing the real-time performance of businesses to grant short term loans. Spotcap was launched in Madrid in September 2014 and is led by Toby Triebel and Jens Woloszczak in Berlin. The team – currently consisting of 35 credit and online experts – plans to expand its service both geographically and across products. Spotcap is backed by Rocket Internet – the world’s leading global internet platform outside of the US and China. Read more about Spotcap: www.spotcap.com

Article Contributed by Spotcap

Good financial management can mean the difference between setting your business on a course for success and watching it become insolvent. Spotcap, the fastest online credit platform, has compiled a checklist with the most crucial advice for successful financial management.

1. Seize different funding opportunities

The reality is that most SMEs will experience financial turbulence at some point and struggle to expand their business. Many studies report that access to financing remains one of the most critical, if not the foremost, constraint faced by SMEs. However, online platforms and financial technology have fundamentally changed the application process for loans. Small business loan platforms, crowdfunding, and angel investors enable entrepreneurship at an early stage. Leverage the opportunities of short-term loans to seize investment opportunities.

2. Take advantage of government incentives

Most countries offer some form of incentive to attract and foster startups; however, these benefits may vary from country to country. Ireland, for example, has attracted many European companies with grants, a low corporation tax of 12.5%, seed funding, and tax reliefs. Startups should contact their relevant government agency for information on the financial support available to them. It is well worth going through the lengthy registration process for a government grant, because this can be a crucial first source of financing.

3. Keep up with your finances

Small businesses often lack a clear overview of their daily, weekly, and monthly numbers and financial trends in their organization. Solid cost accounting is crucial to track your company’s cost and the basis for getting a clear view on your cash position. Understanding your liquidity position is paramount to managing your finances effectively. Spend the necessary time keeping track of your cash position, and if you lack the financial skills, hire an accountant.

4. Keep costs low

You received funding? Congratulations! The work doesn’t stop there; it is important to remain cost-efficient and invest the funds you have strategically. Bill Gurley and Marc Andreessen recently criticized the fast cash burn in the IT industry, which might ultimately lead to another IT bubble. Entrepreneurs should heed their advice and make good use of their funding with good budgeting processes. Having an oversight of your cash position helps you identify where you need to cut costs.

5. Use apps to organise your finances

Apps like Expensify (www.expensify.com), Chargify (www.chargify.com), and Indinero (www.indinero.com) are simple, useful tools to help you keep your finances in check. With these Apps, you can convert photos of your receipts into neatly formatted reports, manage online product subscriptions, track your current financial situation, and receive budget suggestions for the future by integrating information from your bank and credit card accounts.

6. Restructure your debt

Approximately 40.000 small businesses close their doors every month in the U.S., mainly due to the enormous burden of debt they have accumulated. Startups that find themselves in financial straits should try to negotiate preferable terms with their creditors and set up a plan to get out of the debt trap. Additionally, companies should constantly be on the lookout for different financing opportunities to reduce the reliance on single sources of debt.

About Spotcap:

Spotcap enables small business owners to grow their business by providing fast and flexible financing. The company has developed a sophisticated and dynamic decision process assessing the real-time performance of businesses to grant short term loans. Spotcap was launched in Madrid in September 2014 and is led by Toby Triebel and Jens Woloszczak in Berlin. The team – currently consisting of 35 credit and online experts – plans to expand its service both geographically and across products. Spotcap is backed by Rocket Internet – the world’s leading global internet platform outside of the US and China. Read more about Spotcap: www.spotcap.com

Article Contributed by Conrad Ford

Business overdrafts will always have a role to play in the financial workings of small and start-up companies in every conceivable sector. These days though, banks are far less willing than they once were to open up these facilities to even the most viable and reliable of fledgling companies.

Thankfully, alternative funding options are increasingly being made available in response to the need among small businesses for a greater measure of financial flexibility. Here are 4 such options well worth considering if your company needs to boost its cash flow but cannot access an overdraft facility:

1 – Asset refinancing

If you’ve invested in or managed to acquire equipment of any sort that carries considerable value then cash flow problems can be particularly frustrating and tough to bear. By refinancing these assets, your company can free up cash in the short term by effectively selling their ownership and agreeing to hire them back at a pre-determined price. Quite what assets you might refinance will depend on your line of operations but could include, for example, a fleet of vehicles, an item of heavy machinery or an area of office space.

2 – Factoring and invoice discounting

One asset that is often overlooked by small businesses but which can now be leveraged in a variety of ways to raise cash quickly is a company’s sales book. The processes of invoice factoring and discounting are both growing in prevalence and popularity as a means through which small companies can effectively sell their invoices to third parties and access cash upfront without having to wait for clients to pay in full. The terms involved in these kind of scenarios vary a great deal but the process of selling invoices is already helping hundreds of businesses raise funds quickly when they have an urgent need to do so.

3 – Revenue loans

Banks have become more reluctant to extent lines of credit or loans to small businesses in many different parts of the world in recent years. One solution to emerge in response to that situation in the context of retailing in particular is revenue loans, which are created in a way that means they’re paid back in line with income on a monthly basis. For many small companies, these terms help create a crucial degree of financial flexibility and keep repayments from becoming routinely burdensome.

4 – Crowdfunding

Crowdfunding has been one of the more remarkable small business financing developments to have emerged in recent years and its potential is still far from being fully realised. Already the phenomena, along with peer-to-peer lending, is helping hundreds of small businesses around the world raise funds online in ways that simply weren’t possible only a few years ago. Crowdfunding won’t work for every type of business but there is certainly scope for many thousands more small companies to generate cash through online platforms and based on the strength of their appeal to low-equity investor communities.

Every developed economy needs its small business sector to thrive and access to finance will always play a big hand in making that happen. So even where banks have retreated from the small business and start-up sector, there is plenty of optimism and certainly a growing sense that alternative options are available and on the rise.

About the Author

Conrad Ford is the founder of Funding Options, which provides a range of online tools to help firms and their trusted advisers to manage funding and cash flow.