Money Rant

By Ben Needles

 The credit squeeze is a fact of business life and is not just about money but confidence in the market too. There are always winners and losers in every business situation and confidence and business finance can beat the credit crunch.

1. Ensure the bookkeeping and financial accounts of the business are up to date.

Keeping the accounting records up to date is an essential first step to ensuring the business owner knows exactly where the business stands. Reviewing recent financial performance and taking positive action to increase sales and margins where possible and control costs by eliminating waste protects the business from surprises and downturns.

By having available the recent costs, views and action can be taken to reduce those costs and in some circumstances to increase business costs where the profit potential is highest. For example a detailed examination of advertising and promotion costs may indicate some campaigns should be reduced while the money saved invested in better performing areas.

Not all sales produce the same profit for the business. By concentrating efforts on the highest profit margin products and services the effect on working capital can be reduced which can take the pressure off working capital funding.

2. Preparing a realistic business plan can help the business plan ahead.

Many small businesses prepare a business plan when starting up especially if government grants or business finance is to be applied for. Failing to prepare an updated business plan during a credit squeeze can be a plan to fail.

During a credit squeeze a business can find itself operating in an unstable market where the rules and actions of the past might not be evident in the future. Banks increase the cost of borrowing, customers save money by leaving the market and sometimes failing to pay or at least taking longer. Suppliers tighten their grip by increasing prices and demanding tighter payment periods.

Business takes steps to protect income, cash flow, liquidity and in extreme cases survival. That is why failing to meet these new challenges is a plan to fail.

Prepare a business plan on the basis of the recent history and extend the financial results forward following the recent trends. Input into the financial forecast the opportunities that can be exploited to increase business and take a realistic view of the potential negative factors that may be suffered.

The business plan should include both a written view of the next twelve months ahead and include a profit and loss account reflecting the optimistic view and the most negative view with contingency plans should the worse scenario become a fact. A cash flow statement calculated from the business plan to show the effects on liquidity is a vital tool.

3. Improve financial flexibility to increase the business finance options.

Arrange the business finances with more than one bank and increase the number of financing options. A single bank may not offer the size of overdraft or loan facilities or the competitive rates the business requires. View the financial market as a competition between suppliers for your business finance and utilise several to spread the finance between them.

By maximising financial flexibility options for bank accounts, loans and overdrafts and financing asset purchases the effect on business progress can be minimised. Consider leasing agreements, invoice factoring and other specialist financial institutions in addition to the main bank account provider. Cash flow and working capital requirements are crucial.

4. Go out and get more sales.

When sales go down it is easy to become depressed. Fight it and remember how the business obtained new sales channels and customers in the past and exploit the opportunities in the future. Focus on the unique selling points of the business and its products and revitalise campaigns to increase sales.

Consider sales and product diversification into both related and other areas. There are always new opportunities including new products and markets, selling existing products to a wider audience including increased geographical presence. It may help to list all sales activities in sales channels and look for more sales channels in which they company can operate.

5. Ask for professional advice and assistance.

Increase the level of communication with each professional advisor including accountants, financial advisors, solicitors, bank managers and business advisors and any managers of financial institutions. The more the merrier and by keeping in touch more opportunities and more favourable responses will be possible.

There is no such thing as a silly question when the future of the business and its employees are at risk. Discussing options with a variety of professional advisors increases those options and if increased business finance is required for growth or survival in the future, the higher level of personal dialogue will ease that route forward.

Article Source : Article King Pro - Free Reprints and Distribution

About the Author (text)

Terry Cartwright of DIY Accounting designs small business accounting software http://www.diyaccounting.co.uk/ on excel spreadsheets providing complete bookkeeping and tax solutions and business finance options at http://www.diyaccounting.co.uk/financial_services.htm

best search engine

Your Source For The Latest Money News Information Online

Finding The Most Suitable Loan
By Alisdair Cosgrove

 When it comes to taking out a loan there is a great deal that you need to consider, as the type of loan that will prove most suitable for you will depend on your circumstances and needs. There are many different loans types to choose from these days, and you may find that you are not eligible for some of these loan types. By considering your needs and circumstances you can quickly determine which loan product you should choose

One of the factors that will determine the type of loan that you should go for is what you actually need the money for. If you are looking for money to make improvements to your home then you can get a home improvement loan. If you want to pay off a range of smaller debts then a consolidation loan will suit you. In fact, there are many different loan types to suit a range of circumstances, and your reason for taking out the loan will help you to decide which one is best for you

These loans all come under different categories, and again you will need to look at your circumstances in order to decide which category of loan you wish to or are able to go for. The different loan categories that you can choose from based on your needs and circumstances include secured homeowner loans, unsecured loans, and payday loans, which are shorter term unsecured loans.

You will find a number of lenders that offer secured loans, and these loans are aimed at homeowners who have some level of equity in their property. The secured loan is secured against the equity in your home, and the amount that you can borrow will depend on how much equity you have. Whilst you can enjoy greater borrowing power and long repayment periods with these loans you also need to bear in mind that you risk losing your home if you do not keep up with repayments on the loan

For homeowners that do not want to take out secured finance and for non-homeowners there are also unsecured loans, which are not secured against any asset and are based on contract only. The repayment periods are far shorter with these loans, and the borrowing power is not as great as with secured loans. You will also need to have decent credit in order to be eligible for one of these loans, especially with the tighter credit conditions that are now in place.

If you are simply looking for a small loan to get you through for a few weeks until payday then you will find that payday loans may be suitable. These are unsecured loans that are granted for a short period of time, and there is usually a flat fee that you pay per 100 that you borrow. There is no credit check carried out with these loans, but you will need to be working and have a bank account

Alisdair Cosgrove loves to write about finance issues and advise on how people can save money on their personal finance outgoings and can find more of his articles at the UK site LoanEmpire.co.uk, offering best loans and also great tips on many tracker mortgages.

You Need Good Credit And Cash Management Skills To Stay Financial Trouble Free
By MIKE SELVON

 There is no doubt that it can be an exciting experience to get your first job and then your first paycheck. It can provide a person with a wonderful sense of independence and freedom, something that most teenagers crave when they go out looking for work.

However, there are often problems that arise when young people have their own money for the first time because of the excitement and they can get themselves into financial trouble if they don’t have a good understanding of credit and cash management.

The biggest problem that many young adults run into when they are first out on their own is having what appears to be too much money. They find themselves cashing their paycheck after a couple weeks on the job and discover more money in their hands than they have ever seen before. Suddenly, they begin thinking about all the great things they have always wanted to buy and often they go about spending without taking the time to set up any kind of budget for themselves or a good personal finance money management plan.

The next thing that typically happens is that the offers for credit cards start rolling in, each one with a better offer and more attractive bonuses and incentives to get them to open various credit card accounts. In no time at all, these young adults can find themselves with tens of thousands of dollars of available credit lines, but without a solid credit and cash management plan, all too often they will use that credit for frivolous purchases.

When that happens, they can quickly get deep into debt and find they are soon having trouble keeping up with their rent, their other basic living expenses and their credit card payments. Suddenly, the salary that appeared to be more than they needed is now far too little and the financial stress starts to mount quickly. The exhilaration of earning a full-time income is over and financial worries become a reality that most never saw coming.

A personal money management crisis can usually be completely avoided, or at least minimized to a large extent, if people become educated about proper cash and credit management and begin to use money management tool options in their personal finances. This financial education can lead to acquiring money management skills that will stay with them for life. It can be the most important line of defense against getting in over your head and into dire straights financially.

Credit and cash management classes, software, and other products are available from numerous sources and these resources can help young people learn exactly how they can get and stay in control of their money. Many of these financial management solutions and resources are now available online, which makes it extremely easy, especially for the younger, internet savvy generation, to take care of their personal money management.

Educate yourself about credit and cash management from Mike Selvon portal. We appreciate your feedback and welcome your comments at our financial money management blog.

business news

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.