Basics to Budgeting for Retail Space

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StrategyDriven Managing Your Finances Article | Basics to Budgeting for Retail Space

Regarding budgeting for retail space, several key factors must be considered. First and foremost, you’ll need to determine how much space you need and what location you want to be in. This will largely determine your rental costs, which can vary greatly depending on factors such as the size and location of the space.

Once you know your rental costs, you’ll need to consider the costs associated with fitting the space. This can include everything from painting and flooring to lighting, shelving, and any equipment or fixtures you may need. You should also factor in the cost of any necessary renovations or repairs to the space.

In addition to these costs, you’ll need to consider ongoing expenses such as utilities, insurance, and property taxes. You’ll also need to set aside money for marketing and advertising, as well as for inventory and other operating expenses.

Create a detailed budget and stick to it as closely as possible. This will help you avoid overspending, have enough money to cover your expenses, and keep your business running smoothly. You should also regularly review your budget and adjust it to account for changes in your business or the market.

How Do You Find Average Monthly Commercial Rents Near You?

To find the average monthly commercial rent for a specific location, you can research online or contact a local real estate agent or commercial property management company. In addition, several websites offer information on commercial rental rates, including MyEListing.com. 

A site like this may provide average rental rates for specific areas or types of properties. Additionally, you can look at rental listings in your area to get an idea of what businesses are currently paying for commercial space. Remember that rental rates can vary depending on several factors, including the size and location of the space, the type of business, and the property’s condition.

Examine Lease Varieties & Terms

Several different types of leases are commonly used for commercial properties. These include gross leases, net leases, and modified gross leases.

A gross lease is a type in which the tenant pays a single, inclusive rental amount that covers all of the property’s operating expenses, including utilities and property taxes. The landlord is responsible for covering additional costs, such as repairs and maintenance. This type of lease is often used for properties in good condition and requires little care.

A net lease is a type in which the tenant pays a base rental amount and a portion of the property’s operating expenses, such as utilities and property taxes. This means the tenant is responsible for covering some of the property’s costs. 

There are several net leases, including single, double, and triple net leases. In a single net lease, the tenant is responsible for paying property taxes and the base rental amount. The tenant is also responsible for paying property insurance and taxes in a double-net lease.

A modified gross lease is a type of lease that combines elements of both gross and net leases. In this type of lease, the tenant pays a base rental amount and a portion of the property’s operating expenses. The specific terms of a modified gross lease will vary depending on the particular arrangements agreed upon by the landlord and tenant.

In addition to the type of lease, several key terms are commonly included in commercial leases. These include the length of the lease (also known as the term), the amount of the rent and any increases over time, and the tenant’s obligations and rights. Other standard lease terms include the landlord’s obligations and rights, any restrictions on the use of the property, and provisions for renewing or terminating the lease.

Don’t Forget to Account for FF&E + Utilities.

When budgeting for a commercial property, it’s important to remember to account for the costs of furniture, fixtures, equipment (FF&E), and utilities. FF&E refers to the movable items used in a business, such as desks, chairs, and computers. These costs can add up quickly, so include them in your budget and factor them into your rental rates or operating expenses.

Utilities are another factor to consider. They can include electricity, gas, water, and other services necessary for your operation. The cost of utilities varies depending on the size of your space and the type of business. Research utility costs in your area and factors them into your budget to predict your expenses.

Plan for the Unexpected

When creating a budget for your commercial property, plan for the unexpected. Unexpected expenses can arise at any time, have a plan to cover them. Some unexpected everyday expenses include repairs or maintenance to the property, unforeseen increases in utility costs, or changes in market conditions that affect your rental rates or operating expenses.

One way to plan for the unexpected is to include a contingency fund in your budget. This is a set amount of money that is set aside expressly for unforeseen expenses. The amount of your contingency fund will depend on factors such as the size of your business and the type of property you are leasing. You should regularly review your contingency fund and make adjustments as needed to ensure that it is adequate to cover any unexpected expenses that may arise.

In addition to a contingency fund, have a plan to deal with unexpected expenses. This can include setting aside a portion of your monthly revenue to cover unplanned expenses or having a line of credit that you can tap into if needed. By planning for the unexpected and be prepared to handle unexpected costs, you can protect your business and keep it running smoothly.

Physical Additions to Your Space

Suppose you plan to make physical additions to your commercial space, such as building or renovating part of the property. In that case, it’s essential to factor these costs into your budget. These projects can be expensive, so planning and budgeting them in advance is necessary.

When budgeting for physical additions to your space, you’ll need to consider the costs of materials, labor, permits, and other expenses associated with the project. In addition, you should also factor in any costs associated with disruptions to your business, such as lost revenue or additional fees for temporary space or storage.

It’s essential to carefully research and compare the costs of different options and get detailed estimates from contractors or other professionals who can help you with the project. You should also consider any potential long-term benefits of the additions, such as increased revenue or improved efficiency, and weigh these against the upfront costs. Finally, by carefully planning and budgeting for physical additions to your space, you can ensure that your project is successful and fits your budget.

Early Lease Termination & Renewal After Expiration

If you need to terminate your lease early or want to renew it after it has expired, there are several factors to consider.

First, understand the terms of your lease agreement. This will outline the specific conditions under which you can terminate your lease early or renew it after it has expired. In most cases, you will be required to give the landlord advanced notice of your intention to terminate the lease or renew it, and you may be required to pay the penalty or other fees.

If you want to terminate your lease early, you’ll need to negotiate with your landlord to agree on the termination terms. This may include compensating the landlord for any lost rent or other expenses they incur due to the early termination.

If you want to renew your lease after it has expired, you’ll need to negotiate a new lease agreement with your landlord. This may involve negotiating new terms, such as the lease’s length, the rent amount, and other conditions or provisions.

You’re Still on the Hook if Your Business Fails

If your business fails, you are still responsible for fulfilling the terms of your commercial lease agreement. This means that you must continue making your rental payments and comply with any other lease provisions, such as maintaining the property and not causing any damage to the space.

If your business fails, you may be able to negotiate with your landlord to terminate your lease early or to make other changes to the agreement. However, this will depend on the terms of your lease and the circumstances of your business failure. In some cases, you may be required to pay the penalty or other fees for terminating your lease early or for not fulfilling the terms of the agreement.

Why Accounting in Business is Important

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StrategyDriven Managing Your Finances Article | Why Accounting in Business is ImportantAccounting is a crucial part of any business. From local startups to global conglomerates like Google and Amazon, accountants are inseparable from a company’s success.

Accounting is a measurement and communication process that supplies critical financial data to various users, including investors. It helps to establish credibility with these external users, enabling them to make informed decisions about investing or lending money.

Profitability

In business, profitability is defined as the income generated by a company from sales of products or services. It also includes the expenses that are incurred in running the business.

Expenses can include salaries, utilities, rent, and other items a business needs. A company might not generate profits if it had insufficient funds to pay these costs.

Profitability is a critical metric in business as it allows a company to determine its success and future growth. It also helps investors understand how well their investments are paying off.

There are many ways to increase a business’s ability and overall growth. A common practice is to decrease sunk cost, which occurs when a company spends money on unprofitable projects.

Liquidity

Liquidity is your company’s ability to pay its bills quickly. It’s a financial metric that accountants and investors look at when deciding whether to lend you money or invest in your business.

Liquid assets are cash, securities, receivables, and other financial assets that can be converted into cash within a short period, like a day or two. Intangible assets, such as buildings or equipment, are less liquid and can take longer to convert into cash.

When a business has too much liquidity risk, it might not be able to cover its short-term bills or liabilities and will need to restructure, sell assets, file for bankruptcy, or go out of business. Low liquidity also makes it harder to pay employ employees, order inventory, and pay recurring monthly bills like rent.


Taxes

Taxes are levied on goods and services by governments. These taxes serve various purposes, from providing revenue to aiding the development of the economy.

Some taxes, such as sales and value-added taxes (VAT), are applied at the retail level, while others, such as excises, are levied at a more administrative and bookkeeping pre-retail stage. Whether direct or indirect, all governments need income, but the challenge is to carefully choose the level of tax rates and the tax base.

As businesses become more extensive, tax accounting becomes more important. As a result, companies are more likely to have more taxable assets and liabilities. Additionally, businesses that rely on quarterly taxes must meet specific deadlines and reporting requirements to stay compliant.

Payroll

Payroll is another accounting process that businesses use to pay their employees for work performed. It includes tracking hours worked, calculating pay, and distributing checks to employees on payday.

It also involves deductions for local and federal taxes, social security, unemployment insurance, and employee benefits. Therefore, businesses need to track their expenses related to payroll accurately and ensure that they are acting under current tax laws.

A reliable payroll team helps increase employee satisfaction by paying their dues regularly and on time. This boosts employee loyalty and makes them want to continue working for the company.

Payroll also includes bonuses and other incentives for employees that encourage them to perform better. These incentives show employees their worth in a small business and motivate them to do their best.

5 Tips to Simplify Your Small Business Accounting Processes

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StrategyDriven Managing Your Finances Article | 5 Tips To Simplify Your Small Business Accounting Processes

Starting a business or owning one takes a lot of work. You’ll need to manage your business capital and finances and keep the company on the right track. Implementing small business accounting processes is one way to do this.

Business accounting refers to the practice of recording, analyzing, interpreting, and presenting financial information systematically. This is crucial for every business as finances need to be managed, liquidated, and organized. However, these processes can be complex and challenging.

To help you, this article discusses five helpful tips to simplify your small business accounting processes. Keep reading!

1. Separate Your Business and Personal Finances

This part is crucial when operating your business, whether big or small. Doing this helps you make sure everything is clear. Moreover, you can easily track all your business-related expenses without resulting in any mistakes and discrepancies.

You can start by setting up a ‘business only’ bank account. You can also include having business credit and debit cards or any other form of payment for your business. It would help if you also considered filing to become a limited liability company (LLC). This will help protect your personal assets in case your vendors or clients try to sue you. All of these can help you and make your accounting management processes a lot easier to manage.

2. Engage With a Professional

Accounting can be complicated but be confident. You can always ask for help from professionals to help you in your small business accounting processes. Hiring an accountant is an option, and here’s why:

  • It Saves Time And Money: Accountants take over your supposed financial tasks and let you focus on the core operations of your business, boosting productivity and increasing profit.
  • It Helps To Prevent Tax Penalties: They are fully aware of different tax liabilities and knowledgeable enough to minimize and handle the risks for your business.
  • It Can Assist In Growing Your Business: They can organize all your accounts. In addition, they can provide valuable insights if you’re planning for an expansion.
  • It Can Provide Security: Accountants are knowledgeable in data protection rules and regulations.

These are just a few benefits of hiring an accountant for your business firm. You can also consider talking with a financial expert to guide you if you want to seek more advice. That way, you can learn additional information and ensure your decisions suit your business.

3. Centralize Your Payment Scheme

Using different forms of payment can be confusing and challenging to manage. Therefore, it is essential to centralize your payment. You can do this by paying your vendors from one single source.

You can apply this to your clients as well. If your clients were to pay, you should ask for payment as soon as possible and provide them with a short time gap for their payment. That way, you can ensure you will have a steady cash flow in your business.

4. Always Check Your Financial Records

Keep everything recorded for you to check the accuracy of financial data. You can analyze your income, cash flow statement, and balance sheet. You must understand how much money you earn and what you spend. Moreover, you should know where your money is coming from and where it is headed.

To check and keep your financial records updated, you will need an hour or at least 20 minutes to keep everything recorded. Furthermore, it is vital to set aside time each week instead of at the end of the month to balance your book. Always triple-check your records to ensure the accuracy of financial information.

StrategyDriven Managing Your Finances Article | 5 Tips To Simplify Your Small Business Accounting Processes5. Automate and Streamline Your Small Business Accounting Processes

The digital age contributes to efficient business operations. Therefore, consider embracing technology to streamline your accounting processes. To upgrade your accounting processes, here’s what you should do:

  • Focus on digital applications offering essential features you can use. As much as possible, look for cloud-based accounting software that can easily access and update software automatically.
  • Consider using invoice and payroll management tools.
  • Determine the cost-effectivity and scalability of the software tool.

It would be best to prioritize all these if you embrace new technology. If you still need to become more familiar with these, you can start by using spreadsheets online. Moreover, consider using existing generated templates to make it easier. For instance, learning new software like Finlyte can initially pose a challenge but often proves to be beneficial in the long run due to its diverse features and user-friendly interface.

Conclusion

Applying these tips can help you simplify your business accounting processes. Implement it accordingly to ensure the efficiency and productivity of your business. Accounting can sometimes be complicated, but with the right decisions, it can be more accessible.

How Telecom Expense Management Benefits Large Scale Enterprises

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StrategyDriven Managing Your Finances Article | How Telecom Expense Management Benefits Large Scale Enterprises

Any organization on a fast growth track often outpaces its strategic technology roll-out plans. You may be utilizing a mobile workforce, or you may be managing a team of remote employees. You may want to acquire VoIP, faster Internet, or cloud-based servers. While you may have the staff to suggest solutions, your Accounts Payable function does not necessarily have the manpower to monitor the resulting expenses. This is where telecom expense management companies play a crucial role for your P&L.

Technology Asset Management

Even when the vendor procurement function manages technology asset acquisition efficiently, keeping track of inventory and utilization often becomes a costly “second thought”. This is where hiring telecom expense management companies to manage technology assets at an enterprise level avoids shortages, service disruptions, and redundancies. These companies can quote, contract, and monitor vendor billing, as well as capitalize on vendor consolidation to acquire assets at the best price points.

A good illustration of the value created by TEM vendors at an enterprise level can be found in the reviews published in the Gartner 2021 Market Guide TEM Vendors, the top reference in the industry. TEM providers offer a variety of services to streamline asset inventory management, invoice auditing and payment, as well as usage tracking and reporting.

Billing Audits & Pay

Telecom and technology billing can read like a foreign language to even the most qualified accounting clerk. TEM experts will scrutinize each bill for inaccuracies and overcharges. When new technology or services are acquired, billing auditors will ensure that the installation charges and subsequent invoicing are accurate. In addition, these professionals will find out misapplied rates resulting in overpayments. Billing audits are time-consuming tasks: when managed by TEM experts, Accounts Payable staff can focus on other value-adding processes.


Service Audits

Implementing a proactive expense management team can save organizations a significant percentage on their telecom and technology costs. In reality however, most companies don’t employ anyone with the knowledge or time to monitor service costs effectively. TEM experts identify savings opportunities by monitoring in quasi real-time the evolving needs and utilization rate of technology assets in an organization.

Enterprise-level growth often involves adding service locations and sales offices. It is typical to observe vendor invoices going to multiple offices when centralized billing would be way more cost-effective. Similarly, multiple departments inside the same organization may be adding lines or services without authorization or disregarding company procurement policies, and soon enough hundreds of invoices flow to local managers without any kind of control. Telecom expense management professionals spot these issues and coordinate with vendors to ensure cost-effective billing consolidation.

Mergers & Acquisitions Cost Management

Mergers and acquisitions often result in growing pains. With minimal interference, TEM companies oversee procurement and audit processes to ensure that technology needs are adequately met without excessive overlap or costly redundancies. While the C suite focuses on moving the expanding organization forward, TEM professionals work behind the scenes to sort out the details of expense consolidation, service activation and termination, and vendor invoice auditing.

Proactive cost avoidance should be an OKR in any organization. Telecom expense management companies help organizations achieve measurable results in cost reduction and effective inventory management.

Tips on Investing as a Business Owner

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StrategyDriven Managing Your Finances Article |Investing as a Business Owner|Tips on Investing as a Business OwnerA wise business owner will always look for great ways to invest their surplus revenue. Investing allows you to make the money you have increase in value and give you more options in the future. Investing may be a bit of a risk, but in some ways, it acts as a protective thing too. That is because you are not putting all eggs in one basket. Diversifying your investments can mean that you have capital when things go bad in one area. When it comes to investing, the one thing that you really need to do is ensure that you read the small print. Do not ever get into an investment you don’t understand, either. This can affect your finances as well as your reputation if the company you invest in turns out to be bad. Here are a few things to think about as a business investor:

An Investment Plan

It makes sense for a business owner to create an investment plan. This helps you develop a better understanding of your finances and the risk associated with the investments you want to make and create a portfolio that enhances your reputation, among other things. You should never go full steam ahead into any financial decision. When you are considering investing in a certain company, you should read about them. Are the any conflicts of interest? Does their brand vision align with your own? You need to work out what your red lines are and do not cross them, no matter how lucrative a certain dal may appear. You need to do a forensic examination of your business finances too. Is this really the best time to invest? What debt do you have? What new assets should you be buying? You will need to work out your financial goals and your long-term plan, and how long you plan on investing in certain areas. There are three main criteria you need to examine before you invest: what is the safety of the investment, your growth, and your income? You will also need to work out of you can lock money into a long-term deal. Bonds, for instance, may be locked away for 30 years or more. Do not lock anything away that you may need next year. Property is another investment that may be difficult to liquidate quickly without losing a lot of money. All these considerations need to go into your investment plan.


The Stock Market

This is what most people consider when they think of Investing. All the brokers on Wall Street are making millions with the clicking of their fingers. Companies that float on the stock exchange divide their business into shares they sell for a profit. You are essentially buying a part of that company when you buy a share. That is why you need to be very careful about how you invest here. It is very easy to invest in something that does not align with your views. So there is a reputational dimension you need to consider. The stock market is fickle, too, things go up and down, and you need to be wary. Think is always about dividends. Dividends are payments you receive for owning part of the company, and these can be very lucrative if you have enough shares.

Property

You can invest in property as a business. You can even buy your own home through your business, which is a great avenue to go down. Property can be a very lucrative investment, and you can buy to let or buy to sell on. People all need somewhere to live, and the cost of houses has been increasing drastically over the past few decades. When it comes to homes, you can renovate and change the interior. You can expand the homes by adding an extension; you can even build new bespoke homes. If this is something that interests you, and your business is not a building company, then you need help. A site such as ArchiPro can make it easy to find the builders you need to create great homes.

Bonds

Bonds are another great form of investment. There are Government and Corporate bonds, and like the stock market, if you are going to buy corporate bonds, you need to check that there are no reputational issues or conflicts of interest. Corporate bonds are far more lucrative than Government bonds but are the riskier of the two options. You can choose a set amount of time that the organization holds the bond, and during the time the organization holds the bonds, you receive payouts knowns as coupons.