Orbit Business Loans | Small Business Blog » Working Capital

2 Ways to Acquire Business Start-Up Costs

Reda Abouleish — Thu, 27 Jan 2011 20:37:37 +0000

With unemployment at an all-time high, many people find themselves out of work. They are scrambling around trying to find odd jobs as a means to keep up with the bills. But as unemployment is on the rise, there is a new statistic emerging from this unemployment crisis. More people are starting their own businesses. If you have the right marketing plan, product and services ensuring you earn profits, then now is the time to start a business. But how do you pay for the business expenses? Where will the money come from? A small business loan is just one way to attain money for your start-up costs.

How a Small Business Loan Covers Start-Up Costs

When starting a business, there are many expenses to consider. There are permits, equipment, employee salaries, vendor pay, products, shipping (if need-be) and more. How will you cover these costs? A small business loan is a way to ensure these expenses are covered. It will allow your business the chance to succeed. Without having the money ready to deal with start-up costs, it puts a stop to the momentum of your progress. The “big idea” you had in mind for your business comes to a screeching halt. You realize too late; there is no money to cover the expenses. But with a small business loan, the money is available to propel you towards success.

Why a Personal Savings Account Falls Short

Having a piggy bank filled with enough money to cover initial costs is another way to provide funding for your business. It allows you to start from a clean slate remaining debt-free. But the problem is how many entrepreneurs actually have a savings account available to help with operating costs? This is not reasonable for most people willing to create something from scratch. Alternatively, if money is in savings, it is likely designated for personal costs rather than business. If you remove the money from savings, do you still have enough to pay for rent, food, electricity, car, medical emergencies and gas? Withdrawing money from your personal savings account only works for those whose piggy bank is a large Swiss bank account. Otherwise, you fall short when it comes to paying for personal and business expenses simultaneously.

To find out how to pay for start-up costs, talk to one of our small business loan or unsecured business loan experts today.

Share This:

Raising Capital for a new Small Business

Richard B. — Mon, 17 Jan 2011 16:44:18 +0000

Small businesses these days have issues getting off the ground, due to the fact that only five percent of start-up business are able to raise sufficient capital. Of the five percent of ideas that are stellar enough to be take off, the capitol is usually raised on investors’ terms, so as you may see, raising capital to fund your business is not an easy proposition.

Entrepreneurs

Entrepreneurs are often naïve in creating a business, and instead of convincing the bank of why they should invest; they show them how great they personally think their product or idea is. Inventors and new business owners don’t know how to go about the process, because of their lack of experience. New business owners are often misled or misinformed because of this inexperience, and not knowing the process can cause hours of time to be wasted on a lost cause. Being mis-informed often causes entrepreneurs to present the wrong information, and cause them to not be correctly prepared. Movies make it look so easy, but in real life, it’s an endless and complicated process that most people aren’t able to take on, so why go down that road? Seeing as there are so many ‘tricks of the trade’ to getting a bank to believe in your ideas, why not raise capital in a way that is much easier?

Small Business Loans

For new business owners, the hardest thing to do is to find money to fund their ideas. The process of obtaining working capital, however, is necessary. Taking out a small business loan can be an easy way to get your business up and running, and has a simple process. A good business pitch and credit history can be all you need to get a loan to start your business. In this process, you will pay back the money you borrowed with a small cash increase (interest), in small customizable intervals, such as once a month. So if you don’t want to have to deal with banks anymore, look into getting a business cash advance.

Share This:

Turning Around a Failing Small Business

Richard B. — Wed, 12 Jan 2011 23:36:33 +0000

If you are a small business owner facing a declining business, there are many ways to turn it around and change the circumstances so they are in favor of your business. The book “Corporate Recovery: Managing Companies in Distress”, but authors Slatter & Lovett, gives valuable advice on turning companies around. Some of the steps they recommend for your small business are as follows:

1. Get control of cash flow and short term financing with a plan for Crisis Stabilization. Understand all of the resources you have at hand, including your small business loan and funding resources.

2. Perform a thorough assessment and make sure your leadership team is the one that is going to get the job done for your small business.

3. Keep the lines of communication open with stakeholders, and make sure you have their support.

4. Focus existing resources – be willing to sell peripheral assets to generate cash.

5. Make any structural changes needed, including laying off unneeded employees.

6. Understand the reasons your small business got into trouble in the first place, and focus on changing those processes. Figure out how to be efficient and lean.

7. Restructure the business financially, if needed. Only make commitments that you can meet. Raise working capital, or find other sources of funding.

Cash management is also critical to turning around a failing business. Don’t spend cash unless it leads to generating revenue directly. Prioritize payments. Develop plans so that suppliers who aren’t getting paid understand when they will receive payment. Communicate constantly with your creditors. Implement a cash-only basis with your customers. Provide status and updates for everyone involved in your business process.

The stress on communication is critical; creditors know that if your small business ends up in bankruptcy, they will likely receive very little return on their invoice, so many will be willing to work with you AS LONG AS you keep the lines of communication open.

Share This:

How to Run a Small Business Smoothly

Richard B. — Wed, 28 Jul 2010 17:37:03 +0000

With so many people expected to work longer hours and complete more work for less, it is no wonder small businesses have been popping up on the radar more often than in the past. It is a direct result of the recession. It has forced people to find alternative means to earning money outside of the traditional role of working for someone else. But what is the key to running a successful business? I found some common answers to this question regardless of industry. And here is a basic overview of my discoveries.

Learn How to Delegate

You cannot do it all on your own. It is impossible. So you have to let go of that control and delegate tasks to your employees. It sounds simple, but some business owners find this difficult to grasp. For it is their company. Therefore, if a mistake happens it is their name, reputation, and profits on the line. However, you hired your employees for a reason. They have the skills to execute tasks as you would like. Thus, do not be afraid to pass along responsibility to them. They will make you proud.

Narrow Business Focus

When businesses start offering too many different tasks, then the quality of service seems to drop. Try to remain focused on what you offer. Concentrate on one or a few things that your company does very well, and market those services first. There is always time to expand later on.

Running a business is not easy, but it is possible to attain outstanding results. Just keep these two tips in mind. Find out what else has worked for other business owners in your industry. And if funding gets tight, be sure to talk to a small business loan expert to cover operating costs keeping the working capital moving.

Share This:

Why Working Capital is Essential

Richard B. — Wed, 14 Jul 2010 12:30:40 +0000

Working capital is a necessary part of developing your business. But too many small businesses get caught in a bind when they don’t plan for growth or expansion expenses. Here is a breakdown of how working capital comes into play and why you need to plan on it if you wish to run a successful business.

New Ideas Need Money

Imagine developing a new product launching your business to the next level. When this occurs, there are many costs involved. You need to pay the people that are working on it, cover project materials, any legal filings necessary, testing expenses, and more. In addition, once the product is completed, there is marketing, social networking, promotions, advertising needed to be implemented. There is cost involved in every aspect of this new product and/or idea. And this is where small business owners get stuck. They do not comprehend the full picture. They think great we have an idea, but since we did not financially plan on the costs involved, we are just going to sit on this opportunity. There are many problems with this way of thinking. For while you are waiting, another company could swipe the idea before you. Technology could change causing the research and development to occur from the beginning again. Sitting and waiting only wastes money and time. Both of which you do not have.

To make sure none of this occurs, talk to a small business loan professional about how to attain working capital. Find out what your options are and don’t get caught in a financial trap. It only hurts your small business and you. You need to jump on the opportunity to expand your business when the iron is hot. Otherwise, it may be too late.

Share This:

How Buying in Bulk can Save Your Business Money

Richard B. — Wed, 30 Jun 2010 12:45:49 +0000

When buying in bulk for the office, the key is to concentrate on the items that will save you money. For some items cost more at the warehouse clubs than the supermarket and/or the national retail office supply stores. Therefore, if you go into the shopping experience with an idea of how much the items cost, then you will be a smarter shopper saving your small business money in the end. Here are some basic guidelines to help you figure out what to buy in bulk.

Buy Paper Goods and Products

Any type of paper goods and products are a must-buy at the warehouse clubs. Think paper towels, toilet paper, tissues and more. These items are cheap in bulk. This also transcends to printer and copier paper. Check to see if multi-use paper is available for it is normally cheaper and works well with a wide array of printers and copiers. Read the labels to ensure it works with your company office equipment. If it does and the price is good, then stock up on it accordingly.

Compare Printer Ink

Printer ink is expensive no matter where you buy it. However, if you buy in bulk, in general, it is cheaper than buying the same amount anywhere else. Plus, when you have a project due and the ink is running low the last thing you want is to have to run out when a client is on the way to your office to pick-up the exact paperwork. You need to keep additional printer ink on-hand. It is commonsense. Thus, purchase the printer ink in bulk preventing this from occurring. It will reduce office spending on office supplies.

These are two great tips on how save your small business money when buying in bulk. To find out more about working capital, small business loans, and how to cover operational costs, talk to a professional, experienced lender today.

Share This:

How to Cut Business Costs in 3 Easy Steps

Richard B. — Mon, 28 Jun 2010 18:10:23 +0000

The economy is bouncing back, and small businesses have been slowly finding their way to earning profits again. But what if history repeats itself? How will you handle things differently if the financial climate turns rocky but your business needs stability? Here are three tips on how to run a successful business even when the economy turns unpredictable.

Request Financial Assistance

When your business is short on cash do not find yourself stuck without any working capital. It could cause a rippling effect throughout the entire business making it crumble to the ground. Prevent this from happening by applying for a small business loan and/or attaining government assistance. The government has many programs benefiting small businesses through the Small Business Administration (SBA). Find out what options are available to you.

Reduce Spending

Find ways to cut costs. If the majority of your spending is due to travel, then research travel agents and find the cheapest provider. If office supplies are cutting into your budget, then look at buying items in bulk from large retail club chains. All of these expenses add up. Finding a way to lower costs is essential to running a smart, successful business.

Review Marketing Efforts

Try to shift your marketing focus on means that provide the biggest bang for the buck. Consider ways to reach millions without spending a fortune. Look at social marketing, cross promotions and other efforts reaching a maximum amount of your target market for a reasonable amount of money. Examine what works best and start narrowing in on it.

These are three smart ways to help your business cut costs. For further assistance, talk to a small business loan professional today.

Share This:

Why Working Capital is Vital to Success

Richard B. — Mon, 14 Jun 2010 18:13:14 +0000

When the economy is slow, money is not rolling in then how are businesses supposed to cover daily operating costs? A small business loan will assist in getting your company through these difficult times. However, it is tough to measure if you own a business that has never been through such rough times before. Receiving financing to cover working capital is one means to ensure you are ready and able to continue functioning even if your business is temporarily slow.

Working Capital Covers You Until Economy Bounces Back

Let’s say you own a pizza restaurant. You have specialized ovens, restaurant software running on computers to put in orders, drivers, cooks, refrigerators, vendors and other expenses to cover. What happens if the business decreases due to the economy? People are not eating out as much. However, you still need to pay rent and cover the costs mentioned above. How are you going to do it if you do not have additional funding? There is no cash flow coming through the business. Therefore, you need to look at external options. Check out working capital loans, business loans and other available answers to the solution.

Working Capital is a No –Hassle Short-Term Answer

Working capital is a way to ensure your business remains open even during sluggish economic times. It covers all the costs until you are able to get back on your feet 100%. It also helps your employees realize that the problems are just temporary and keeps everyone striving to continue to do their best. You want your employees to realize they have stability and working capital is a way to provide that until things improve.

Talk to a professional today. Find out what options are available in maintaining your business and keeping things running smoothly.

Share This:

Working Capital: Why Your Business Needs It

Richard B. — Fri, 15 Jan 2010 17:25:45 +0000

Working Capital Defined

Working capital is one of the key concerns for any business owner. It is the money needed to operate daily business. It keeps the business moving on a regular basis. Every business needs working capital to run a successful business regardless of the size or industry. For working capital loans are a partial financial extension needed to ensure the business continues.

It does not matter where the loan originates from for the purpose is always the same. The working capital needs to keep things moving. It ensures the business owner has working capital available relieving additional stress to running a business.

So how do you know what type of working capital loan to pursue? There are two different types of working capital loans, traditional and accounts receivable loans.

Traditional Style Loans

One is a traditional style loan or otherwise known as a small business loan. To qualify for a small business loan your company history is evaluated and determined if the need for the money is immediate or not. It is better suited for a business that is at a halt and needs to gain access to money quickly, and does not have any of its own to cover daily operating tasks. The only downfall is a small business loan may limit the opportunity to benefit from receiving further financial assistance during business expansion periods.

Accounts Receivable Loans

Another type of financing available to business owners is invoice financing or accounts receivable financing. This is where a business owner signs invoices over to a third party, and that party provides the business owner with a percentage of the invoice amount. This kind of transaction is designed for businesses that have needs beyond a traditional working capital loan.

There are many various financial options available for small business owners today. You just have to do your research and find a fit that is right for you.

Share This: