All posts by Andre Blount


Business Practices that Make The Most Sense

Business Practices

All businesses will need to use an effective and efficient business practices for their operations if they want to remain profitable. Wasting time and resources will eventually slow a business down and cause it to lose sales and profits. If an enterprise wants to remain effective in their particular market, they should use the following practices for their organizations.

Quality Management

A business’s success or failure begins at the top. Owners and managers are ultimately responsible for the management of a business and they should develop practices and habits that must be carried out by the rest of the organization. Management must implement procedures that are easy to understand, practical for everyday use, and are able to increase a business’s sales and profits. They should also develop procedures for managing employees, dealing with customers, and for controlling the inventory in their stores.

Managing Products

Managing products is another important area of business. Organizations that sell products should have an efficient supply chain in place and they should have an easy to use storage and stock system that just about anyone can learn. Efficiently managing products is crucial for any business that sells material goods to the public. This is especially true for organizations that deal with perishable or specialty items.

Reducing Operational Cost

When a business keeps its operational costs low, it will increase their profits and productivity. Management should periodically evaluate a business to figure out if employees are being wasteful or if there are any procedures that are costing the organization money. Processes should be streamlined and utility and supply costs should be reduced as well. Again, this will help to save money and increase profits.

Watching the Dollars

All business organizations should watch their finances. It is easy for a business to spend more money than it needs to within a short amount of time. A business should have a budget in place and do their best to stick to it. Operating within the budget will help to eliminate wasteful spending and it will help an organization to spend wisely. A business should have at least one good accountant on hand or an employee who is good with managing money and finances. These tips will not guarantee that a business will be successful but these will help make an enterprise more competitive and profitable.

Financing Options

Understanding Loan Options for Your Business

Starting up and running business is an exciting yet challenging venture for any entrepreneur. One of the most challenging aspects is to find the finance for the business, especially if your credit is subpar. You can find business loans with bad credit pretty easily nowadays from lenders like OnDeck & Halo Capital. However, this might not always be the best option. We will look at a number of other options that are available for businesses of all shapes and sizes.

1. Personal Assets

This includes your savings and valuable personal items such as jewelry, car, and your house.

If you own the house outright, without any mortgage, there is an option to move to a smaller house and use the proceeds from the sale to fund your business. If you have a mortgage, discuss with your current financial institution the possibility of a home equity loan. The downside of your home loan repayments will increase and if you are unable to meet the repayments, the house can be confiscated.

2. Find an Angel Investor or a Business Partner

If you have a business partner, you can split the cost of starting up the business and your business partner should bear equal amount of responsibilities in the business.

Angel investors are wealthy individuals who are able to provide capital in return for partial control of the business. They are often successful entrepreneurs or executives who are able to gauge whether they can expect a high return on their investment. This is a good option if you do have the right network to market your business to an angel investor. The drawback would be for the investors to have their own shares in your business and are entitled a share of the profit.

3. Borrowing from Your 401 [k]Account

You will generally be able to borrow from 50% of your account balance to a maximum of $50,000. The loan is required to be repaid within five years, and most loans allow the repayments to be deducted from your payroll.

The 401 [k]loan can be a quick and easy way to get money and it does not affect your credit rating. The interest rate charged is usually lower than the rates on a business loan. It is, however, your financial security for your retirement. You will lose on any potential growth in the market for the money that you borrowed. If you are unable to repay the loan within five years, the remaining loan amount will be treated as a withdrawal and incur an income tax plus a 10% early withdrawal penalty if you are under 59.5 years old.

4. SBA loan

The Small Business Administration (SBA) loan programs are developed by the US governments to cater small businesses that are unable to obtain finance through the traditional bank loan.

There are different types of loans available, ranging from the general small business loans, microloan programs, equipment loans, to disaster loans. You will need to apply through financial institutions that participate in the SBA program and see whether your business qualifies.

5. Credit Card

Most banks and lenders offer business credit cards for their customers. Like personal credit cards, a good credit rating is a requirement for the application to be approved.

Using a credit card has the advantages of a low minimum repayment and a relatively high credit limit that can be used to pay the business expenses. However, the interest rate is higher compared to a business loan and any late payment will affect your credit rating.

6. Crowdfunding

Crowdfunding is a way of raising money from the public, typically via crowdfunding platforms such as Indiegogo and Kickstarter. The two main types of crowdfunding are rewards crowdfunding whereby you raise money in exchange for your products or services, and equity crowdfunding whereby the donors receive shares of your company.

If you choose to raise money through crowdfunding, make sure that you do a thorough research on the website to decide which platform is the most suitable for your business. Different sites have different terms and conditions and there are usually fees involved in using their service.

7. Friends and Family

Borrowing from friends or family can turn into a tricky situation if it is not communicated as openly as possible in the first place. The financial arrangement has to be made very clear as to how the loan will be treated. Will there be an interest rate charged? What is the term of the loan? Will the lenders be involved in the business? What happens if the loan cannot be repaid? These are all the questions that need to be addressed firsthand to minimize the potential of a broken relationship.

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