Freedom Financial Gives Five Financial Management Tips Every Successful Entrepreneur Follows

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To achieve and sustain success, entrepreneurs must be skilled in a variety of areas. One of the most important of these is financial management. The lack of proper financial management is one of the primary causes of early failure for entrepreneurs. Freedom Financial provides five key areas of finance that are critical for entrepreneurs to have a greater chance at success.

Proper preparation for lean months.

Entrepreneurial income typically fluctuates from month to month and even from year to year. Income can swing from high to low in a matter of weeks, without warning. It’s important for entrepreneurs to prepare for the lean months by setting aside money during higher earning months, according to Freedom Financial. While, it’s tempting to spend money to reap the benefits of your hard work, it’s wiser to put money away while it’s plentiful. Without a reserve of cash set aside, some business cannot survive.

Keep business and personal finances separate.

Many entrepreneurs fund their startups using money from personal savings or a personal credit card to get the business going. In the early stages of entrepreneurship, it’s often simpler to conduct all your transactions from a single account. Once your business starts growing, Freedom Financial recommends separating business and personal finances, is essential. Keeping funds separate funds simplifies accounting and gives your business credibility. Keep business funds in a business account and pay yourself as though you were an employee of the company.

Diversify your assets and your efforts.

Entrepreneurs have to maintain a delicate balance between focusing on their entrepreneurship efforts and diversifying their income and time. Statistically speaking, entrepreneurship has a high risk of failing. Freedom Financial recommends entrepreneurs to hedge against that risk by putting time into other ventures, putting money into other investments, or sometimes even maintaining full-time employment.

Get professional financial advice.

You may be able to do many things on your own, but you cannot do everything on your own. When it comes to matters of finance, it’s better to seek professional council. Getting professional advice from an accountant and tax professional can ensure your business is both operating legally and taking advantage of the possible tax deductions. It’s wise to shop around for the best fit for your business, but this isn’t an area where you should cut costs.

Minimize business expenses.

As your business begins to generate more revenue, owners may increase their business spending, justifying these expenses as necessary for business growth. Remember that the more you spend, the less profit your business makes. Always aim to minimize business expenses by negotiating lower prices, seeking lower-cost alternatives, and forgoing unnecessary expenses. Freedom Financial suggests having another person who has to sign off on business spending, to help keep the owner’s spending impulses in check.

To achieve and maintain success, entrepreneurs must always plan for the financial future and be careful not to take the present circumstances for granted. Spending time reviewing the business finances and constantly seeking ways to improve are two steps entrepreneurs can take for better financial management.

Why So Many Different Loan Types Exist

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When it comes to business, there’s one thing everyone needs to get started: financing. This can come in a variety of forms, the number of which can be confusing. What do you turn to when you have specific needs and a budget to adhere to? What about the amount of variance in these things? There’s a lot to keep in mind when applying for a loan, so let’s try to make things a little simpler.

Loans exist to service the consumer, and banks exist to give it out. That’s how they make their profit: by helping you make yours, and then demanding interest on your repayments. With this in mind, there’s two big factors involved in why different loan types exist, and here’s a quick rundown of what’s on the market.


Because Every Lender has their Own Interest Rate

Some loans don’t even have interest generated and added on. When it comes to capital one, a small business line of credit means you only have to pay back what you use. If the credit just sits in a bank account, there’s no interest added and no need to give it back. This is a loan that’s virtually risk free, but of course you have to fill a criteria to get it. And being able to show that your business makes good profit and will be able to pay it back no questions asked is not something a lot of people can be sure to keep up with.

If you have a personal loan, them the interest rate is sure to skyrocket. If you’re not looking to finance a business, getting these small amounts is beneficial. Similarly, if you have a credit card, you’re likely to spend and keep on spending as it’s a popular method of payment and it seems everyone has one. But once again, the interest rate can skyrocket due to the popularity and likely overspending of the amount on a card.

Because Credit Scores Vary

As someone in business or not, you have at least one credit score. Yes, there can be more than one number to your name. Because of these multiple numbers, credit scores can be a lot more accurate, and predict your likeliness to go into debt when you can’t make up with payments after a certain period.

Credit scores mean a lot to a lender, and that’s why they’re so integral to different loan types. Credit scores dictate what you can and can’t get because of your payback period or payment rate. Loans have to be different to service these needs. Even if you have bad credit, you can find a lender to service your needs. As long as you have a credit score, or a prediction on your finances, you can guarantee there’s a loan waiting for you.

To go into more detail, a lot of your own research will be required, so set aside time. Yet, these reasons are a good starting point if you’re considering taking out your own loan.

How You Can Save Your Business Money by Cutting Down on Paper

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StrategyDriven Tactical Execution ArticleIt may have escaped your notice, but UK businesses are gradually changing how they deal with the paper trail. Offices around the nation are looking at ways to reduce the need for paper mills to order pulp (which makes paper) that comes from the cutting of small trees and the remnants of harvesting larger ones. This way, forestry across the UK stays where it is, which looks more appealing and helps clean the air across the country too.

Here are a few ways that your business can reconsider how it manages its paper use and what options there might be.

Intentionally Going Thinner and Lighter

Just like with our waistlines, aiming for a lighter, thinner version is a good choice when it comes to paper usage in the office. It needs the cooperation of the office manager who handles paper orders from the photocopier right down to the little notepads to pull it off. Cutting down the environmental impact from your business’ paper use is as easy as cutting down the paper stock thickness to use less volume.

It’s also worth noting that paper which comes with a special coating over it, or has been treated to be reflective, also uses different types of thicker paper to achieve this result. The greater use of this kind of paper product is impactful too.

Lower Storage Costs for Paper Files

With the use of thinner paper stock, paper files that are necessary for businesses to keep on-hand are thinner. With each page being a lower GSM stock (as recommended above), files get thinner overall. Fewer metal storage cabinets are needed, and you need less space to store them and access them too. A filing clerk is no longer needed either when there’s fewer files to manage.

Think Before Printing Out

Pausing to consider whether a printout really needs to be produced is a great way to reduce paper usage. The mindless printing of multiple copies of a seldom accessed paper version is not helpful to reduce paper usage or the costs of it. Where copies are needed, consider printing on both sides and train staff on how to set up their software and printer to achieve this result. Alternatively, the company could look at tablets for teams to use and access digital versions of reports for reference purposes.

Paper copies fade over time and are a poor way to keep records in the wake of the complete digitisation of software. Set standards for employees where staff are rewarded for reducing paper usage, which cuts the environmental impact and office costs.

Fewer Photocopies

Taking fewer photocopies is another way to reduce costs both in paper usage and maintenance expenses for the photocopier machine. Distracting staff by having to monitor repair staff when they have to attend to fix a copier machine is a time suck. The greater the use of the photocopier, the more often it’s likely to run into trouble too.

There are always more ways to cut down on paper usage to save money. You can a look at the GoCanvas.com website to learn more about how much paper usage is costing your company and how you can set up your business to operate more efficiently and less expensively.

Going digital saves businesses money in many areas. They are no longer reliant on a paper trail for most activities and the company operates more smoothly as a result. It’s also easier to look up key information online when necessary because putting hands on the paper file is no longer needed.

The External Factors Affecting Your Business

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Try as you might, you will never really “own” your business. It is too much part of a bigger network that is too far beyond your control for that. While there might be plenty of directions you want to take your company in, you’ll also be subject to the whims and plans of your fellow humans, who all too often (it can feel like) have plans that are out of sync with your own. Here are just a few of the ways your business can be affected by external factors, to which you only have a passing, observing role.

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Political
A thriving economy relies on there being not too many things rocking the boat. You can see the way the stock market reacts whenever an announcement or decision is made; sometimes it gets a boost, which is its way of saying ‘we approve!’, and sometimes it takes a nosedive, at which point everything gets a bit nervous. With Donald Trump, for instance, no one – including quite possibly Donald Trump – is quite sure which way the economy will go. That one is just for time to figure out, but down the line it could have a knock on effect to your business. A good economy means you’re in the best possible position to succeed. Also, you’ll notice how things can get a bit twitchy whenever there’s political unrest, more commonly when it’s overseas. A destabilised China, for instance, can have effects that spread across the world, such is the way all our economies are interlinked.

Your Business Partners

It’s all good and well keeping your own house in order. It’s all good and well operating at full capacity, with the books in order and things slowly progressing just fine and dandy. But how many other businesses do you rely on for your success? You’re probably more wrapped up in the well-being of other companies than you think. For instance, how does the software you rely on influence your success? You might want to look at a service such as software escrow, which would give you access to the software you depend on should the software company fold. Elsewhere, you could face major difficulties if your suppliers unexpectedly fold. You can’t stop that from happening, but you can make sure you have the contingency plans in place so that you’re able to handle any temporary setbacks relating to stock and so forth. Essentially, it’s important not to be too reliant on any other single company.

Trends

You’re at the top of your game at the moment, right on the cutting edge of what’s new and fresh. You’re part of a movement that is going places! Only, it’ll only be going places up until the time when it’s not. Take a look through history and everything that was once ‘hot’ ended up being pretty ‘not’ in the end. You only need to look at what passed as fashion twenty (or any number) years ago to see that things really do change. Did the people wearing the clothes back then think they’d one day look so lame? Of course not! Did Blockbuster think there would always be a demand for home videos? Probably! Trends come and go. The important thing is to realise that ‘trendy’ doesn’t really mean anything, and that you shouldn’t be relying on it for your success. Always make sure you’re looking to the future, especially if the industry you’re in is prone to change.

External Innovation: Good

Not every external factor is bad, of course. In fact, all the ones listed above can be good if the cards fall nicely enough. This positive change also extends to innovation, which as we all know is essentially what’s making the economy thrive in recent years. And it looks like it’s here to stay. Innovation is creating new markets, new products, new services, new just about everything, and it’s happening all the time. Every year, there are new services that help to streamline businesses and make them less dependent on other factors. You should be keeping your ear out for the developments that will aid your business. Everybody else will, and to not do so you run the risk of falling behind. Make sure you’re reading up on all the best business online blogs and reading your industry magazines; it’ll keep you fresh.

External Innovation: Bad

With that being said, not all innovation will be there to give you a boost. In fact, sometimes it’ll come along and put you right out of business. This has been happening for centuries, with new products popping up that resulted in massive shifts in the economy. We see it today, with Uber versus traditional taxi companies. No matter who you are and how successful your business is, you should always be ready to face oblivion. It’s the way innovation works. If you’re worried about an emerging company or trend, then look at diversifying your business – but do it well in advance. The number of jobs that may be lost – and industries taken of – by robots in the coming decades should be an eyeopener for many business leaders.

Environmental Factors

Sometimes, the factors that affect your business has nothing at all to do with other humans. It’s all about that grand old mother earth, our home. We think we know a lot about the environment, but we don’t – and unfortunately, we’re about to know a whole lot less once climate change really gets underway. A changing climate will affect a lot, from how things are produced (if they’re able to be at all) and how they get around the world. It’ll also bring more extreme weather, so making sure you have business insurance and cloud storage will be essential.

Predicting The Changes
You don’t know what will happen in the world, because no one does. But you can be prepared by keeping on top of global events – not just what’s happening in your industry, but in all the industries that branch out from your own too. We’re all connected in the end!

The Most Common Causes Of Financial Problems In Business

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As a business owner, it is essential that you stay on top of the finances in your company. After all, no business can get very far without a decent focus on the money itself. If you want your business to enjoy much success long into the future, then you need to make sure that you are taking a good look at the finances. The truth is, there are a few very common reasons that businesses experience financial problems. In this post, we will take a look at some of them. Looking at these should help any business owner put their own business into a healthier position. With that in mind, let’s take a look at the most common causes of financial problems in the business world.

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Overstock Of Equipment

It is often the way that young businesses find themselves buying plenty of equipment to get the ball rolling. This might seem necessary, but the truth is it often isn’t. One of the most common causes of businesses experiencing financial trouble early on is an overstock of equipment. It can easily happen, and it can cause more of a hole in your budget than you might at first assume. If you think your business might be suffering in this way, be sure to cut down. Sell some of that stock which you don’t need, and invest the earnings back into the company.

Paying Too Much Tax

There are few things as important as staying on top of the legal side of things. It goes without saying that tax is a very important part of this. However, it is often the case that businesses end up paying too much tax. While you certainly do not want to get into the trouble of not paying any tax, you should make sure that you don’t pay too much either. Doing so could land your business in some serious financial trouble before you even know what’s happened. Use the help of a professional like tax attorney Joe Callahan at MCC4Tax. That way, you are sure to only pay what you need to.

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Dropping Prices Too Early

It is a very good idea to do everything you can to keep your business competitive in the marketplace. That much goes without saying. However, that doesn’t mean that you should place your business in any kind of financial jeopardy. In fact, this is often easily done without noticing. When you are introducing a new sale or promotion, ensure that you don’t take it too far. There have been cases of businesses essentially bankrupting themselves by being a little too generous. Remember: you want to please the customer, but you also want to keep on trading!

Trying To Please Everyone

The fact is,your business will be much more successful if it focuses on a niche. While it might be tempting to try and have something for everyone, it is often not viable. Chances are, you will just end up spreading yourself too thin. Avoid this at all costs by focusing on a central demographic first and foremost. If you have the resources, you can then expand as and when you need to.