Archive for

Small Business Tips For Tough Times

The easiest thing to do may be to open a search engine and type in a little information about your business (such as “real estate”) and “business tips for tough times”. It may be all you need to get advice. If you can’t find exactly what you’re looking for, though, there are sites that are designed to offer tips, as well as answer any questions you may have about running your business.

About.com, a network of sites that offer lots of great information on a variety of topics, has a small business site. It offers articles and blog posts that give business tips for tough times, and has a forum that you can use to ask questions that can be answered by other small business owners who might be in the same situation as you.

The Small Business Administration (SBA) also has a website that can give you good business tips for tough times. The site also includes a Small Business Planner, that can give you all the information you need to help you start and maintain your small business. It even offers a Local Resources section that may have business tips for tough times that are specific to your local community.

Yahoo! offers a directory of helpful links for business owners that cover nearly every topic you can think of, and can lead you to sites that offer specific information and business tips for tough times that are specific to your industry.

There is a business-focused search engine at business.com that not only gives you statistics and profiles, but gives you updated news and financial information that can lead to business tips that can help you stay successful.

These are just a few of the many resources available to small business owners. When going though tough economic times, information is key, and through these resources, as well as others, you can get the answers to your questions, find the support you need, and have a good list of tips for tough times that will help your business stay strong no matter what the economic climate.

Small Business Bookkeeping Software

In an increasingly technological world, many companies are turning to small business bookkeeping software to meet their needs. This software is tailored especially for small businesses, leaving out the extra features that only a larger business could use. It is also generally less expensive to purchase and maintain. This demand has lead to the development of small business bookkeeping software. Small businesses still need software that can handle sizable quantities of information quickly and accurately.

It should also be user friendly and have safeguards in place to reduce the incidents of handler mistakes. The expected final output, much like that of a human bookkeeper, is the generation of financial reports to help the business owner guide the business towards optimal growth.

Ideally, small business bookkeeping software should include the following features:

  • Standard bookkeeping operations. This involves accounts payable and receivable, price quotes, merchandise stock, orders, etc.. The format should be clear and easy to read and use.
  • Integration. Each function should work with and support the others. Data should never have to be re-entered into the system for different functions. This saves time and money.
  • Reporting Options. Information should be readily accessible to check accuracy and the feasibility of your business practices. The uses for the reporting function are various and flexible, and should be easy to use and access.
  • Audit trail. This allows the user to follow any information through the entire system automatically. Any changes that have been made to a transaction or software setup can be detected by this function, creating a sense of asset security for the business owner.
  • Software access. Many businesses require several people to access its financial information from a variety of locations. The software can be put onto individual computers, or might use a server. The internet is an increasingly popular option, which makes remote personal access easier for the authorized user and reduces the amount of time needed to install the program separately.

It is a good idea to ask fellow owners what business bookkeeping software they use, especially those who own similar businesses. Each industry needs different features from their software; certainly a small clothing boutique will use different bookkeeping features than a landscaping company. Many software developers diversify their products so that business owners can have a product customized to their needs. As the business grows which is the goal of any small business owner the software needs are likely to change.

The right software for your company will be able to grow along with you. There is no one-size-fits-all approach to selecting bookkeeping software. It must be reasonably priced and readily used, and equipped for a variety of uses. Investing in quality small business bookkeeping software is one of the most important decisions to be made to secure success and a competitive edge in the marketplace, and a business owner needs every advantage in tough economies like the one we face today.

Small Business Loan Review – Is Anyone Making Small Business Loans in This Bailout Market? Part 2

As our economy continues to weaken and credit markets freeze up, stories abound in the media about bank’s holding back on their small business loans. But let me tell you what it is like in the trenches: Most banks are not lending at all. In fact, they are closing the door even to existing loans and lines of credit. Pretty bad, right? I am not going to sugarcoat it. Frankly, you have heard too much of that lately in Washington. This article will give you some suggestions as to where your search should begin in finding a small business loan.

So forget about buying a ticket to Washington and asking for your own private bailout. Let us start with an actual example. ABC Company has been in business for five years selling fire protection and extinguisher products to apartment units and office buildings. Although the profits have ebbed last year a bit, it has seen increased gross income each year and in fact had to hirer five additional employees. Because of material costs, a $150,000 home equity line was taken out for business purposes. The owner, Mr. X, has a credit score of 760. Unlike many Americans, there is very little personal debt and his credit cards are well below the 25% available limits. Because of profitability, the credit line was down to a mere $15,000. Suddenly, without any advance notice, he was informed the credit line has now been cut to $50,000.00. Having relied on this credit line, two large contracts were recently signed which required the purchase of a substantial amount of inventory. Now it is problematical whether he will be able to complete one of the contracts. Does this sound pretty close to home?

Mr. X then called his banker and politely asked for an explanation. He didn’t get much, except there was some talk of reducing his “loan to value” percentage from 90% to 50%. But there was no indication his home has decreased in value or his credit has slipped. He offered to furnish an updated financial statement, but this was rejected. Perplexed, he walked away without any real answers. It was like trying to get a real answer from a politician.

I am a business loan provider and small business advocate with 25,000 funded loans under my belt. I have the scars to prove it. And I don’t work for any bank. So let me give you the skinny: Big banks are not loaning to businesses, period. What bankers discuss in the back room they don’t tell you. Many of them are taking the position that if housing prices go up 100%, maybe in ten years, they might consider loaning to the next generation. Gee, thanks. In the meantime, they are all too happy to receive as much bailout money as possible to simply increase their balance sheets and give them the leverage to buy smaller banks. Traditionally a bank made its decision based upon asset value, cash flow, updated financial information (business and personal–which they can require pursuant to their loan agreements and personal guarantees), or credit underwriting standards. Now it is simply done arbitrarily out of fear. The answer is: there is no legitimate answer.

Enter the Federal government’s TARP 700 billion bailout. On September 26, 2008 former President Bush indicated: “It will help take pressure off the balance sheets of banks and other financial institutions. That will allow them to resume lending and get our financial systems moving again.” Right. Many industry spokespersons were skeptical and now we know for sure that it has done nothing as far as filtering down to small businesses. Filtering is really the wrong word here since it has been absorbed anonymously somewhere into the vagaries of their balance sheets.

So who do you go to? Use Small community banks in your area or small SBA lenders who specialize in helping small businesses. The emphasis is on “small” institutions. The answer comes from simple economics 101. While the large banks are jumping on their corporate jets and getting out of that business for the indefinite future, the smaller ones are picking up the slack and seizing the market. And many of the smaller banks had more conservative underwriting practices. I was speaking with a senior vice-president of a small community bank in the south the other day and expected the answer of not making loans. He looked at me strangely and said no, they were still making loans. They were not affected by the sub-prime meltdown, namely not having a large number of toxic mortgages on the books. In fact, he was looking for more business.

Does that mean that all small community banks are opening the floodgates to small business loans?. Of course not. But my suggestion is to contact at least five of them in your area in person and get to know the credit managers. C’mon now, remain positive. You’ll be surprised at the results. In the next article I will discuss the pointers of how to successfully present yourself to a banker.