The Rapid Growth of Non-Bank Lenders
Following the market crash of 2008, the government increased regulations and restrictions on lending practices on the banking industry. It was an attempt to compensate for their failures that contributed to the mortgage crisis and financial collapse. This ultimately, and necessarily so, made obtaining new sources of capital more difficult for both individuals and small businesses.
Are Internet Loans a Good Idea?
Recently we discussed the rapid growth of non-bank lenders (internet loans) in the financial marketplace. Their emergence has resulted from the reluctance of traditional banks to engage in the small loans typically needed by small business owners. This new category of lending is indeed innovative, makes the process simpler and easier, and offers consumers greater flexibility in loan options. But being new also has its drawbacks. Few regulations have been instituted in this category, which means there’s a greater possibility for consumers to fall prey to predatory lending practices.
A Business Valuation: What to Expect
Business valuation involves both a quantitative and qualitative assessment of your company, to determine its price and value on the market. To establish your company’s value, a business valuation analyst/appraiser looks at several factors.
Employee Benefit Plans: Choosing the Best Options for your Business
Open enrollment for company employee benefit plans is underway. But before employees sit down and decide which plan benefits they plan to opt-in or opt-out of, small business owners have the task of creating those plans. Unfortunately, many small business owners “don’t always get to control the design of their plan the way large businesses do,” cautioned Renee Blaine, an HR Consultant and owner of E Squared HR Solutions. Which is why including an HR specialist as part of your company’s financial team provides leverage in negotiating benefit options and designing plans that provide real value for your employees.
Tips to Manage Cash Flow Early in the Year
We’ve talked about cash flow before. It’s the lifeblood of your business, so it’s important to pay attention to it. And whether your company’s cash flow is high or low, there are always strategies to improve it.
How to Create an Accurate Budget: Look Back
Many companies and individuals spend time creating and monitoring a budget. You know how it goes–if you’re a company, you look at your sales, and if you’re a person, you look at your pay stubs. Then you look at your bills. You think about how you want to save money. You wish you could save more, so you decide you’ll tighten your belt. The result? You come up with a budget that could only be followed in a world where nothing ever goes wrong and you never have to deal with surprise expenses like brand new tires for the company car or braces for your kids’ teeth. This is because you’re budgeting based on assumptions and emotions.
Numbers don’t lie, so creating a budget based on hopes and dreams in a perfect world generally does not work. However, when you create an honest budget, it can be the tool that makes hopes and dreams come true, and allows you to run your business successfully.
Understanding and Utilizing Cash Flow
I often hear clients speaking of cash flow, typically when they do not have enough liquid funds coming through or when they are happy because their clients are paying very well. I seldom hear them talk about the reciprocal effects of cash flow for their business and hence for their household as related to their balance sheet.
We are in terrific economic times right now. Banks are lending, builders are building, people’s homes have gone back up in value, credit is being extended for the acquisition of new ‘assets’ (and liabilities, watch out!) and I am reminded of 2005-2007. Gas is cheap – much to the chagrin of my clients in the oil business or related industries, but the average consumer is psyched. Unemployment is low and new jobs are popping up. It is a fun time in our country! This is the perfect time to take advantage of positive cash flow to optimize your future.
When does a Company Need a Business Valuation?
Many business owners never think about the value of their company–until they’re trying to sell it. Obtaining a business valuation is the first step if you intend to sell your company. According to Pam Oliver, owner of Horizon Business Valuations LLC, business valuation is a complex process that touches every aspect of a company.
Your Balance Sheet…Telling the Real Story of your Company’s Health
Robert Kiyosaki, writer of Rich Dad Poor Dad, often comments on the importance of balance sheets as a business management tool. Just like a yearly checkup at the doctor’s, your company’s balance sheets help you determine whether you’re in prime financial health or if you have “financial cancer.”
Most individuals understand their profit & loss/income statement very well, but many people struggle with the balance sheet. Never be embarrassed by your numbers! You may “feel in your gut” how your company is doing, but you also need to listen to the story your financial reports are telling you.