February 2nd, 2012
We have all heard it said many times that CASH IS KING! Well in these uncertain economic times it seems more difficult than usual to get an audience with the ‘king’. My specialty is helping those in business to get a handle on their cash flow challenges. I thought it might be helpful to offer a few hints on improving your cash flow.
1) The foundation of good cash flow practices lies in the ability of the business owner to manage their expenses. You need to consider every expense very carefully. Ask yourself, “Will this really enhance or add value to my business? Do we really need it?” If the answer is, “yes”, then you should ask for a discount, possible try to barter, or negotiate terms on the purchase. Remember, every dollar counts!
2) This is still in line with managing your expenses… budget! You need to make a list of your monthly bills and expenditures. Include on the list the due date of each payment and ensure that you keep to that schedule. This will help in two ways: 1) you can easily track your payments and budget accordingly and 2) helps prevent late fees or overdraft charges, which would add to your liabilities.
3) Review your invoicing/collection strategy to see any areas for improvement. You might consider billing from a ‘due upon receipt’ perspective. You may find that invoicing on a weekly basis, as opposed to monthly, can improve your cash flow. A courtesy phone call is often just enough to speed up a payment. Nothing harsh; “Hello, I just wanted to touch base with you and ensure you had received your invoice.” Something this simple can often move the dialogue along and, in turn, the payment.
4) If you accept credit cards that often improves your cash flow. Some programs feature a payment link right on the emailed invoice. This enables your client/customer to open the invoice, click the link, and have the convenience of paying the invoice and getting it of their ‘to do’ list. In the event you do need to follow up on a slow pay, you then have the added benefit of, “Hey, I can take your credit card payment over the phone, if that would make it easier for you.”
5) Factoring your invoices can certainly help with the cash flow. Many small businesses serve larger businesses that routinely take 60 – 90 days to pay. A medium to small business doesn’t have the luxury of reserves that keep cash flowing during that payment period. Factoring can instantly improve your cash flow, providing money for monthly expenses, payroll, vendor discounts, and generally making it easier to stay on top of your monthly budget.
Tags: alternate financial products, cash is king, Factoring, Success in small business
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January 23rd, 2012
Your company’s online reputation is becoming increasingly visible and, as a result, more important than ever in 2012. You have to be vigilant in monitoring and maintaining your online reputation. You do not want to lose clients because of a negative post that appears about your company. It’s important that you take control of what’s being said about your business online. You should regularly and consistently spend time posting positive content about what you do.
Tags: Grow your business, Success in small business
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January 11th, 2012
Among the top stories in the headlines for 2011 has been the realization/appreciation for the small business owner and what they do to help support our economy. In an effort to support small business there has been a rise in lending to growing companies. As the credit crunch tightened lending options for small businesses, more small banks and non-banking institutions stepped in to assist. One of the fastest growing and easiest to work with financers is the accounts receivable factoring lender.
Accounts receivable financers, otherwise known as factors, purchase a company’s accounts receivables, at a discount, in order to provide them with working capital. Factoring provides financing to the business owner in the form of a cash advance (usually 75% – 85% of the purchase price of the invoices).
This form of non-traditional financing works well for small businesses due to the fact that many small business owners have little or no credit history, or need money more quickly than what normal bank processing can accommodate.
It is imperative for the small business owner to keep cash flowing. Whether for making payroll, purchasing supplies, or whatever the day-to-day cash flow need is, a small business must keep cash flowing. It is in the best interest of a business owner, no matter the size of the business, to grow their business without adding debt. Having an accounts receivable financer on the small business owner’s team can only enhance cash flow and provide liquidity that will help the business grow. We at American Funding Solutions provide working capital for growing businesses and are excited to partner with and support small business owners in their efforts to grow their businesses.
Tags: alternate financial products, Factoring, Grow your business, Success in small business
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December 22nd, 2011
With the ongoing financial challenges of the current economic climate, it is fairly obvious that entrepreneurs need to be financially savvy as well as creative in how they drive their businesses. The banking industry is tightening up their credit score standards and alternatives once available to the small business owner are no longer viable options.
Due to increased regulatory pressures, as well as an increasing number of foreclosures and related banking woes, fewer banks are in a position to assist small business owners in their quest for financial options to keep the cash flowing for the business owner. There is help in the form of accounts receivable financing for the small to medium sized business.
Accounts receivable financing, and other alternative financing options, are available through American Funding Solutions. We are a factoring business and we differ from a bank in many respects. A banker extends credit based on the financial condition and cash flow of the borrower. The borrower is expected to keep up with regular (usually monthly) payments to the bank… whether business is good or slow. Therefore, it is often required that the borrower meet certain financial requirements, including, but not limited to, a long, successful history of business with an acceptable cash flow history. These requirements are difficult for start-ups and certainly may prove difficult during the recent economic challenges we have been facing.
On the other hand, a factoring company does not require the client to demonstrate a proven history of profitability. As a rule, factoring companies are more interested in the credit history/financial strength of the client’s customers. If those that the client provides goods or services for are financially strong, then the factor can offer financing in the form of accounts receivable purchasing.
In other words, the factoring company views an invoice as an asset. The goods/services are delivered to the customer, the invoice is verified, and the advance is funded. Often times the transaction can be completed in a couple of days and the business owner can have the necessary cash to meet payroll, purchase supplies, pay rent, whatever is needed to keep the business’ cash flowing.
Factors often work hand in hand with banks. A business may have a working relationship with a banking institution and find that they suddenly have a need for additional working capital. Whether it is due to the sudden onset of the need or the fact that the client has a need that exceeds an existing line of credit, the banker can put the client in touch with a factor that can assist with a type of bridge financing that alleviates the crisis.
Factoring receivables is a great financing tool often utilized by small businesses. It provides a flexible, readily available financial tool to increase liquidity. We at American Funding Solutions are in business to provide working capital to growing businesses and we would like to help you sustain your business’ growth.
Tags: Factoring, Grow your business, Older Invoices - Factoring Can Help!!, small business, Success in small business, sucess in small businesses, without debt
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September 12th, 2011
A friend of mine was talking about how her daughter’s soccer coach was telling the girls that the things they work on in their sport, and any sport, do a lot to help them prepare for life. My friend said that she and her daughter were talking about that theory as they drove home from practice. They did find, after some brainstorming, that there are some applications to the business world.
1. Practice – When we practice and work on developing our business skills we are certain to improve. Under this umbrella, also comes learning new skills. In today’s fast paced work place we are teetering on the verge of being left behind if we don’t stay up with new products, advances in technology, and /or keeping up with information that impacts our skill sets. Stay sharp or risk handing your clients/customers to your competition.
2. Listen to the coach – Do you provide your clients/customers the chance to give you feedback? Often we hear from the client or customer that is unhappy, but are you making it easy for those that use your goods or services to tell you ways you are getting it right, or areas in which you can improve? All feedback has a place and the potential of moving you forward.
3. Warm up – Most coaches request that the athlete be at the field an hour to 45 minutes ahead of game time. This time is to allow the athlete to ‘get their game face on’ and to prepare them mentally and physically for the contest that is coming. Do you roll in to work just in time to punch the time clock? Do you get there on time, but then get sucked into the email chasm, find you need to catch up with co-workers, or just need time to organize your plan of attack for the day? If you arrived earlier you could probably take care of getting your ‘game face on’ and reviewing your game plan so that you can hit the field running when the whistle blows.
4. Passing – It is crucial that you play to your strengths. Often times we are surrounded by those that have different strengths and it is essential that we work together to make the team successful. Be aware that sometimes the best maneuver is to pass the ball to someone who has strength in an area that may be your weakness. Crossing that ball in front of the net , so the girl with the outstanding header can knock it in, is the best way to score. I would much rather have an assist than miss a business opportunity.
5. Check the score – Finally, keep an eye on your profitability. The numbers are the best measure on how successful you are.
Tags: Grow your business, small business, Success in small business
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August 29th, 2011
When considering if factoring is right for your business, a question that often arises is if there is a specific criteria for determining invoices that are eligible for purchase from the factoring provider. That is a pretty easy question to answer… common sense is a good guide for this one. If the goods were delivered to/received by your customer and/or the services were performed, then those invoices are eligible for purchase.
There is one additional proviso and that is simply, your customers must be creditworthy. There is some due diligence on our part in determining this last stipulation, but presumably, you would not be doing business with customers that could not pay you.
Tags: alternate financial products, bootstrap your business to success, cash is king, debt-free, Factoring, Grow your business, Older Invoices - Factoring Can Help!!, small business, Success in small business, without debt
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August 26th, 2011
Since this is a blog dedicated to factoring, I thought it might be helpful if I tackled some of the frequently asked questions that we encounter in our day to day business. I believe the basis of a lot of questions that arise are due in large part to the fact that factoring is a little understood business financial tool. Probably the most popular question has to do with whether or not factoring is a good fit for a client’s business.
Let me first reassure you that factoring is an excellent fit for most businesses. I don’t know of a business in operation that does not have a need for working capital. The problems arise when a business does not have working relationship with a bank… or for any number of reasons, cannot qualify for a bank loan or line of credit. It is a fact that it is easiest to get credit when you don’t need it. First let me set the record straight, in the factoring relationship, you are not a borrower, and we are not a lender. We purchase your accounts receivables, that is called factoring. We purchase receivables for goods delivered or services rendered.
Once our business relationship is established you, our client, simply deliver your invoices to us. We offer as much or as little support in the billing process as you are in need of. Normally, you will have your advance within 24 hours. Then, once your customer remits payment we pay you the received amount less your advance and our fee. It is a very simple process and one that provides the working capital necessary to grow your business.
Please feel free to comment or ask questions. We are eager to assist you with your business financial needs.
Tags: alternate financial products, bootstrap your business to success, cash is king, Factoring, Grow your business, Older Invoices - Factoring Can Help!!, Success in small business, without debt
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August 24th, 2011
If you are like a lot of people at this time, you are looking to start your own business but are concerned about cutting the ties with your ‘job’. I came across an article on Entrepreneur.com that offered some helpful suggestions for easing the transition. I thought I would share the article posted by the Entrepreneur Staff:
Balancing a career while owning a business isn’t easy — but it can be done. Arnold Sanow, co-author of You Can Start Your Own Business, suggests these tips to help make your part-time business a success:
1. Get your family involved. Whether it’s answering the phone, stuffing envelopes or putting together orders, giving family members the chance to help out is a great way to get more accomplished in less time — while also making them feel like they’re part of your business.
2. Be ready to give up personal time. You won’t have much time for TV, reading or hobbies you used to enjoy. Be sure the sacrifice is worth it, or both your job and your business will suffer.3. Focus on the task in front of you. When you’re at work, focus on work. Don’t let thoughts of your business distract you.
4. Make the most of every minute. Use lunch hours or early morning to make phone calls. Use commuting time on the train to catch up on paperwork.
5. Take advantage of time-zone differences and technology. If you do business with people in other states or countries, make time differences work to your advantage by calling early in the morning or after work. Use faxes and e-mail to communicate with clients at any time.
6. Don’t overstep your boundaries. Making calls on company time or using your employer’s supplies or equipment for your own business purposes is a big no-no.
7. Be honest. Only you can assess your situation, but in many cases it’s best to be upfront with your boss about your sideline business. As long as it doesn’t interfere with your job, many bosses won’t mind. You’ll also gain by being honest rather than making them feel you have something to hide.
Tags: Grow your business, small business, Success in small business
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August 23rd, 2011
Starting a business is difficult. Cash flow can be a challenge, the hours long, and the rewards delayed. Large competitors will try to crush you and you will, no doubt, have to grapple with unexpected problems.
It may, at times, seem like an impossible task, but most successful entrepreneur have stories about their early days in business and the seeming insurmountable challenges. Often, sheer guts and determination will see you through a rough patch. Be prepared to endure a rough ride and there’s a good chance you’ll come through the other side.
If cash flow is an issue then you can rest assured that we stand ready to assist you. Simply contact our office for some of the alternate financial products that we have to help you grow your business.
Tags: alternate financial products, Grow your business, Success in small business
Posted in Business Management, Cash flow, Factoring, Growing your business, New Business | No Comments »
August 22nd, 2011
Consumers are increasingly using the internet when looking for products and services. If you do not have an online presence then you are invisible to a large portion of your potential marketplace. The days are gone when you are competing with your competition down the street. Not only are online customers looking at your local competition, but the global marketplace is also at their fingertips.
Web development costs may seem a bit pricey, but with some research, you will find that there are off-the-shelf options, as well as cloud-based tools that can help you get up and running for less. Don’t get left behind in the rush to cyber-space, you can’t afford to miss an online presence.
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