Growing a Debt-free Business

When you are a start-up or small-to-medium business, the proper management of your finances and establishing a strong financial state is critical, yet often it is nothing but an afterthought for excited and budding entrepreneurs who will do anything possible to get the ball rolling.

One of the biggest pitfalls for new start-ups and SMBs is financial ruin – most of these new companies do not have much cash to splash around, yet many still do. It’s not just this either, bookkeeping, taxes and accounting are all stress-inducing factors for the founders of these new businesses, and this can cause them to go under.

By staying out of debt, however, new companies can help themselves stay afloat even when cash is tight. Loans, especially those targeted at new businesses, can be an attractive prospect, however, they should be avoided wherever possible. Remember, loans always have to be paid back; how can you do this if you do not have a steady revenue stream?

Loans are great when you have had some growth and are ready to scale up your business, but they should be avoided in the very early stages when you are just establishing your company. Here are some tips for growing a debt-free business, loan or no loan –


Managing Cash Flow

One major reason for start-up failure is running out of money, often caused by a lack of cash flow management. When you are running a business, you need to account for every single penny and know where money is both coming from and going to.

If you neglect to stay on top of your cash flow, you will put your new start-up or SMB in a very precarious situation. It doesn’t matter how great your business idea is, when you run out of money you have two choices – i) take out a loan; or ii) call it quits. Many business owners when faced with this ultimatum will opt for the former, and you can easily avoid debt by proper cash flow management.


Prepare for the Worst

Although you should be remaining optimistic about your new business and its success, you never know what can happen. It is easy to be blindsided by problems when you least expect them, and by having some cash stowed away on the side can help you alleviate these problems when they crop up and prevent you from having to take out loans to cover sudden business expenses.

If you have a full or part-time job, keep it until your business is generating money from which you can take an income. Don’t quit your job and obliterate your personal income source until it can be replaced by your new company.


Hire or Contract an Accountant

Yes, you probably can’t afford to hire a full-time accountant, but that is fine – you don’t need one.

You should contract an accountant, however, as they can help with all aspects of your finances. From taxes to bookkeeping and securing investments, having a good accountant on your side who is familiar with your industry and has a good reputation can help you out with more than just balancing your books. In many ways, accountants are great business advisors and can help you run your company as well as keep you out of the red.

Don’t Buy Everything

Do you really need a fully-furnished office kitted out with all the latest tech and cool furniture? When you’re starting out, probably not – that should be something you work towards!

Lots of new businesses ruin their finances with frivolous spending on things which they don’t need and may never use. Your new start-up or SMB should be saving money wherever possible, and buying that three-seater leather sofa for your office isn’t going to help you do that. If anything, it pushes you closer to the red by squandering finances which could come in useful later on down the line.

Amazon’s main headquarters was a dingy office located down a back alley, with Jeff Bezos still using the same recycled wooden pallets as a desk well into the website’s success. Learn from that!


Set Financial Goals

Rather than just thinking about wanting to earn X amount of money, set a goal to do it and have a series of miniature goals which you can work towards to help reach your final one.

Revenue goals enable you to stay on track with your finances and make adjustments wherever necessary to help growth. They also ensure you are constantly up to date with how much money your company has and is earning, enabling you to make better commercial decisions and give you the confidence needed to keep pushing on through your business’ journey.

When you start hitting your revenue goals, you will put off unnecessary spending as it will detract from the great feeling you get from reaching targets.

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Best Financial Planning Tips To Avoid Debt

There are many ways that can help you to avoid falling into debt. There are many ways and tips that you can apply to stay away from a debt and there are other ways that involve guidance from an external source regarding a debt. A financial advisor or expert can be an example of an external source. We will discuss both so that every individual can benefit from this article.

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5 Tips for Financing Your Start Up Idea

Finding the funds to set up your own business is a challenge in just about any economic climate. Everyone knows that there is a lot of work involved in starting a new business but the financial aspect is perhaps the most challenging for many. While some entrepreneurs are fortunate enough to have loads of money saved up to launch their own business but perhaps don’t have a viable business idea, others are faced with the opposite idea. Many potential business owners have a fantastic business idea, but lack the capital to finance it.

Unfortunately, no matter how groundbreaking or unique your business idea is, it’s unlikely to take off without the proper funding behind it. You will more than likely need a website, office space, tech team, not to mention the various other costs involved in running a business, and this is just the beginning. This, of course, means that you need money.

Whether it’s a cool new app, an import and export business or a posh new restaurant, almost all businesses and entrepreneurs require a bit of funding to get their business off the ground. The good news is that there are plenty of funding tips out there that entrepreneurs can use to finance their business dreams.

Here are a few tips for turning your dream business into a reality.


  1. A detailed business plan is key

Having a sound business plan is crucial to the survival and development of any business. Without a business plan you have no real direction of where your business is headed and investors won’t see any value in investing in your business. Some of the most important aspects to cover in your business plan is research into your market, identification of competitors, your target audience, the opportunity your start-up offers to investors, a thorough financial breakdown including how you plan on turning a profit, and how you plan to implement everything.

Your business plan should be thorough, properly researched, have clear objectives, processes and overall goals. If you want to secure funds from investors, you must be able to present them with a detailed business plan. If you want some tips on writing a business plan that banks can’t resist, then check out this article.


  1. Get advice from experienced investors

Who better to get advice from than those that have already gone through the process right? Not only can they give you insight into how they went about obtaining funds to start their own business, but they will also be able to direct you to the lending firms in which you can obtain business loans at the lowest interest rates.

If you have family, friends or associates that are known for their business minds and have experience investing in other businesses, then these should be the people that you approach first. Pitch your ideas to them, present them with your business plan, and then listen to their feedback. They will probably have some invaluable advice for you. Also, you never know, they could end up investing in your business.


  1. Maintain a good credit score

Essentially, your credit score could make or break your business. If you have a great business idea but poor credit history, it’s highly unlikely that you will be able to obtain any sort of bank loan. Borrowers with a poor credit score are seen as being at a higher risk of defaulting on a loan – which is why banks are hesitant to lend to those with a bad credit score. It is still possible to get bad credit loans however, so all is not lost.

We’re not saying that it’s impossible to succeed in your business if you have a bad credit score, there are certainly other ways to obtain funding. But a good credit score will certainly make things easier. If you have a bad credit score, it’s important that you repair it before approaching financial institutions for loans. Here are a few ways to steadily maintain your business credit score overtime:

  • Establish business credit history: The more vendors report a good payment history, the better your business credit will be. Thus it’s very important that you maintain a good working relationship with vendors.
  • Keep up to date with taxes: File your business taxes in a timely manner to ensure compliance.
  • Maintain a good personal credit rating: Even if your business is a separate entity, your personal credit score will still have an impact on various types of business financing.

A credit card is a great way to increase your credit score. Applying for credit cards, making everyday purchases with them and then paying them off immediately, is a very effective way to improve your score.


  1. Networking

You’ve probably heard it a thousand times before but the value in networking cannot be overstated. This is the best way to find investors. You want to build relationships naturally with key people in your industry and local community, rather than having to cold call. Chat with other business leaders, go to local events, and make yourself known in your industry. You could even offer to help other entrepreneurs and established business owners – they may return the favour by introducing you to reliable angel investors or they might direct you to a venture capital firm that helped to launch their start up.

When you’ve done a good amount of face to face networking, you can put these networking skills to good use online. Look into crowdfunding sites like which can be a fun and effective way to raise money for a relatively low cost project. You set a goal for how much money you would like to raise over a period of time, i.e. $1000 over 30 days. Your friends, family, associates (hopefully people you’ve met through networking), and strangers then use the site to pledge money.


  1. Make a budget and shop for financing

The budget is the financial aspect of your business plan and it’s essential to gaining investors. Each and every investor that you approach will undoubtedly want to see a detailed financial breakdown, outlining how exactly you plan to make a profit. Here are some important things to consider in your financial plan:

  • Estimate your costs: Have a plan in case to cover your expenses for in the first month. Don’t underestimate your costs. The main reason why most businesses fail is that they simply run out of cash
  • Understand what types of costs you’ll have: one-time vs ongoing costs, essential vs optional costs, and fixed vs variable costs
  • Project your cash flow: Cash flow is vital. You need to know exactly how much money is going out and expected to be coming in.

Once your budget is in place you can start approaching financial institutions. With a thorough financial plan in place, investors are far more likely to buy into your business idea.

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Auto Insurance of the Next Decade: Driving Home the Future

The future is built out of uncertainty and there is only so much one can do to prepare for it. Beyond changing life situations or unforeseen automobile crisis, there are the changes in technology and how that can affect what you have done to prepare. The way life fluctuates means any company, insurance or otherwise, needs to remain flexible and help its customers secure their livelihood. But what does insurance look like when basic ideas of who is at fault and more specifically, the criteria for auto-insurance premiums no longer apply?

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Benefits of Novated Leasing the Family Car

Family car

Do you already have a novated lease for your work vehicle or considering getting one? You may be able to novate a car for your spouse or children as well. Each employer has different rules regarding this, however, most employers will allow more than one vehicle to be purchased under a novated lease. And the savings can be significant.

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Top 5 tips on how to get more clients online and grow your profits

If you’re setting up a business or you are wondering how to ramp things up in 2018, the internet is one of the most valuable tools you can use to win more clients. Think of the internet as your virtual megaphone to get more clients, announcing to the world that you have something amazing to offer. Unfortunately, in almost every industry there are a lot of other people with megaphones! Many of them are selling the same goods or services as you are, and in order to gain more clients you must cut through the noise and reach your target audience. I am going to share with you my top five tips to win clients online and turn your business into a success story.

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Are You Really Making Money? Why Profits Don’t Always Add Up

Profits can be deceiving and while the goal for every entrepreneur should be to make a “profit”, this actually can be interpreted in a number of ways.

For instance, founders of not-for-profits often take large salaries and can live a lifestyle far above the average small business owner. And though the traditional idea of a profit might be how much money is left in your pocket at the end of the day, some might view an increase in company value (if you plan to sell) or non-monetary benefits as “profit”. Still others view improvements in lifestyle as a unique kind of “profit” for an entrepreneur.

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Benefits Of Hiring An Accountant When You’re Self-Employed

Hiring an accountant is a great idea if you’re self-employed, or thinking about becoming self-employed. They can help you along the road every step of the way, from offering you fantastic financial advice when you’re getting started to managing your ongoing jobs and generally getting more clients.

I personally work with the team at Koustas chartered accountants. For years I resisted the idea of paying someone to sort out my finances thinking I was saving money by doing it myself. However, one of the first lessons you should always learn when running your own business is: your time = money. If I’m spending time doing something when I could be doing work for clients, I am losing money.

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How To Keep A Positive Cash Flow

Placing other business goals ahead of your company cash flow is a big blunder as a business owner, and for many start-up businesses, this is a common norm. It is critical that you spend the time to establish your trademark and sales leads, at the same time, it is vital to develop a ceaseless cash flow (amount of cash coming into your business). Cash flow is the lifeblood of every business and if you can retain 10% or 20% of your monthly revenue, you will be able to pump the cash back into your business.

To have a consistent cash flow in your business, here are ways how to

Be Familiar with your Expenses

Several businesses offer discounts to attract and possibly retain a customer, right? We’ve have seen before haven’t we? Some have harnessed the use of a site like Scoopon and Groupon while others have done this on their own. Despite all this, you should offer a discount if you know the cost and the hit of hat you are offering, if not, prepare yourself for reverberations.  As a business person who would like to see your merchandise grow, you should be aware of your comprehensive cost basis, how much you’d theoretically charge, the cost of what you’re offering and the profit gap on your products and services.

Pay bills when You have to

In regards to bills, the idea is that you try and get your outgoing invoices paid as soon as possible and pay your bills when you have to. However, it has to be said that there is an effect of paying your bills on time that builds a positive relationship with your suppliers. If you’re having trouble recouping bad debts then it’s always wise to get a debt collector to help, I always recommend Network Debt Collection. It is also a good idea to look for places where you are paying money (or about to spend money) when you don’t need to Microsoft Toolkit is a unique solution to saving money on something you would usually have to pay for.

Combat the Urge to Offer Immense Discount

There are 2 buttons that many business owners seem to battle with “panic and discount”. When discount overwhelms panic, the next step is to drop prices which are the biggest mistake you can ever do. Although it’s good to offer discounts once in a while, make sure you’re still being profitable when you offer discounts. Say after every three months you have a big sale, customers are not fools, they’ll just wait until that time you have a big sale and then will show up.

Encourage Repeat Business

If you can be able to land and retain customers (continuous) and especially if you’re in a volume-driven business like retail, you’d have cemented your cash flow, profit, and growth. In this case, what you need to do is consecrate yourself to see your customers coming back again and again.

Think about how you can make good use of loyalty programs, VIP offers and other frequent shopper programs. They are some of the best tools to systematize continual business.

What else are you waiting for? You have the tips, go for it!

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