By Michael Patten –
We’ve all watched entrepreneurs go onto Shark Tank and pitch their product to the Sharks. Some participants are so impressive in the way they deliver a clever pitch that instantly grabs everyone’s attention, while other participants fail miserably and make you cringe inside.
While my son and I have watched many episodes together, one business in particular stuck out to me. Two cousins from Maine pitched the idea of a food truck selling lobster. After seeing an update on the business this year, I decided to learn a bit more and picked up their book, Cousins Maine Lobster: How One Food Truck Became a Multi-million-Dollar Business. The book provided a detailed account of how they started their business, how they landed on Shark Tank, and how their deal with Barbara turned their food truck into a multi-million dollar business.
The book was a fun read and provided some great insights into starting a business and all of the work that is involved. However, one of my favorite chapters was titled “Oh, Right, Money Matters,” because it highlights the value and critical importance of understanding the key metrics of any business. (more…)
By Cheryl Abrahamson –
In an economy where the stakes are increasingly high and cash progressively scarce, business owners must proactively manage the balance sheet and income statement or risk falling victim to the five silent killers of cash flow.
Did you know that a majority of businesses that file bankruptcy reported a net profit, yet had negative cash flow? Often the warning signs that a company is in trouble go unnoticed until it is too late. A business can improve its liquidity and create long-term viability by looking closely at the following potential trouble spots.
Mis-financing is defined as borrowing short-term debt to pay for long-term assets. These assets could include purchasing equipment, leasehold improvements and other fixed items, paid for with a short-term line of credit. This process drains the cash out of a business and condenses the time-frame the asset has to pay for itself. (more…)
By Connor Wilson
Nowadays, when people think of credit scores, their minds often go to what they see on America’s best friend: television. Even without seeing a single commercial for a free credit monitoring service, most if not all people know that credit scores are important, and something to be watched and taken care of. They are, after all, your lifeline to some of life’s biggest milestones, like buying a home, paying for college or getting a bigger boat than your loudmouth neighbor.
From my time working in personal lending services, it became very clear that Credit Karma in particular has done quite the job getting into the minds of Americans. Almost daily I’d hear people mention what their latest credit score was according to Credit Karma, and either the confidence or doubt that came with it.
While everyone has a personal credit score and should definitely check it, business owners also have a business credit score. With that in mind, is there a Credit Karma for businesses? (more…)
By Kat Tretina –
As a small business owner, you likely wear many hats. You’re at once a product developer, marketer, and a customer service representative. But, one of the most overlooked tasks you may have is accounting.
Managing your company’s books is a time-consuming and complex process, but it’s necessary for your business’ success. If you plan on applying for a business loan, it’s important to pay attention to key financial topics and learn how to create and read balance sheets so you can secure the necessary financing.
Whether you handle your business’ finances yourself or outsource your accounting to a professional, here’s what you need to know about business balance sheets and why they’re important for business loan applications. (more…)
By Brad Wiewel –
Over a million lawsuits are filed in state courts every year. And, according to one source, all of us have a 10% chance of getting sued in any given year and a 33% chance of getting sued during our lifetimes! This is scary information given that being on the losing end of a lawsuit can be financially devastating.
As a business owner, you have special cause for concern. That’s because if your business is sued and ordered to pay a money judgment as a result, the plaintiff in the lawsuit can collect on the judgment not only by going after its assets, but by going after your personal assets too if your business does not have enough resources to pay the full judgment amount.
The good news however, is that appropriate up-front planning can protect your personal assets. For example, you can: (more…)
By Connor Wilson –
Not all credit scores are created equally. You likely already know that you have a personal credit score; it’s what you need to buy a car, get a mortgage, credit card, or even pass a background check. You probably also already know that there are three bureaus (Experian, Equifax, TransUnion) that report your credit scores.
What you may not have known is that your small business has a business credit score. Just like your ability to pay your credit card bills and mortgage payments on time factors into your credit score, your ability to handle your business’s debt and accounts payable, among other factors, all go into your business credit score.
Just like personal credit scores, business credit scores come from multiple reporting bureaus (Dun & Bradstreet, Experian, Equifax), and can help you get better financing. Also just like personal credit scores, business credit scores are not all created equally. Here’s a breakdown of three credit scores that matter to business owners. (more…)
By Samantha Novick –
According to a Quickbooks report from earlier this year, “61% of small businesses regularly struggle with cash flow.”
Even if your business is profitable, you can be at risk of falling into financial demise. How? Because if you don’t have enough liquid cash on hand to meet the myriad of current and near-term expenses that come with owning a small business, it can be nearly impossible to keep your operation afloat.
What is cash flow?
Cash flow is essentially the cycle of funds going in and out of your business from operations, investing, and financing activities. It’s the amount of liquid cash that you have at your disposal at a given time. Your business can either be cash flow positive, or cash flow negative. (more…)
By Michelle Black –
No matter how smart you are or how great your product may be, your business needs one very important ingredient if it’s going to thrive — the right equipment. The right equipment can help optimize performance and take your business to the next level, but it might be out of reach.
Thankfully, an equipment lease may be able to help you get the specialized machinery or technology your company needs now, even if you don’t have all the money you need to pay for ownership of the equipment up front or you’re not interested in equipment loans.
With an equipment lease, you get the right to use the equipment while you’re making monthly payments to a leasing company or financial institution.
What is an Equipment Lease?
Essentially, equipment leasing can be viewed as an alternative form of small business financing — most notably equipment loans. It’s a way to help you get what your business needs now with less money out of your pocket on the front end. However, you’ll generally need a decent personal credit score to qualify for the most attractive rates and terms. (more…)
By Meghan Ott, Venturize –
In celebration of our new partnership with America’s SBDC, Venturize co-hosted a Twitter chat during National Small Business Week to talk about the top tips and resources to help small businesses and aspiring entrepreneurs become loan ready.
We were happy to be joined by our friends at Intuit QuickBooks, the New Jersey Business Action Center, Small Business Majority, BIGG Success, and BizBuySell. There were also a number of SBDCs that participated, including the Arkansas Small Business and Technology Development Center, New York SBDC, University of Minnesota Center for Economic Development, and Temple University SBDC. (more…)
By Bob House, President, BizBuySell –
If you think obtaining funding is your biggest priority, think again.
When it comes to starting a new business venture, most entrepreneurs focus solely on how they can get funding. Yet they often do not have a clear understanding of the funding process. Nor have they considered some of the many challenges of business ownership and how that might affect the amount of money they actually need.
“At least 90 percent of aspiring entrepreneurs ask how they can get financing, grants, or something related to capital,” says Brad Bunt, director of North Central Texas SBDC.
We spoke to some of the leading experts at America’s SBDC, a nationwide network of Small Business Development Centers (SBDCs), to get their insights on the most common questions asked by entrepreneurs. According to these experts, while obtaining funding was the most common issue, there are many more important things entrepreneurs should be thinking about first. (more…)