small business

Business Finances: Tackle Debts & Avoid Insolvency in 2020

February 25, 2020 By Susan Paige Leave a Comment

Business Finances Tackle Debt and Avoid Insolvency

Businesses that suffer from too much debt can see their company come crashing down. How this debt is handled can be the difference between a business that sinks or swims. You can either settle the debts, or allow the company to fail, and with the right strategy, you can avoid becoming insolvent.

When a business becomes insolvent, it means they can no longer meet their financial obligations to its creditors as debts become outstanding. While there are some strategies to rescue a business once it becomes insolvent and get it back to operating normally, it’s best to try and avoid this situation altogether. With that in mind, here’s how your business can tackle debts and avoid insolvency:

Review Your Budget

If your debt is growing out of control, chances are your company’s budget isn’t working. You need to create a budget based on the business’s current financial situation. Review your last few month’s bank and credit card statements to help create a realistic budget; you need to be aware of all your sources of revenue and expenses so you can identify trends like revenues that are in decline or any costs that have been creeping up.

By categorizing your income and expenses, you will be able to get a clearer understanding of which parts of your business are the most profitable and which parts are draining your cash flow.

Cut Costs

When you’ve got a clearer picture of your business’s finances, it’s time to find ways to cut costs and reduce your expenses. You’d be surprised how many expenses just roll out each month that may not be contributing to the upkeep of your business operations.

There are three categories for your expenses: those you will continue with, those you can negotiate to a lower cost, and those to eliminate completely. Some costs will be unavoidable, like payroll taxes and renting the office space. Other costs can potentially be negotiated down, by shopping around for new suppliers or insurance companies. Finally, some expenses can be done away with altogether, but this could involve difficult decisions like letting go of an employee. However, if this becomes a necessity for keeping your business running, it might be a viable option.

Increase Revenue

Your debt problems likely arise from a low cash-flow, so increasing your revenue is a sure-fire way to help dig yourself out of debt or prevent it from getting any worse. There are many ways to do this, such as marketing your products or services more heavily towards your current customers or increasing your prices.

Thanks to your budget review, you should have a better idea about which sources of revenue are the most profitable. Focus your attention on these areas and try to increase this high-profit revenue to give yourself the best return on investment.

Collect Payments

Tying in to the increase in revenue, you need to keep on top of payment collection from your customers. Send out invoices promptly, as soon as your product or service has been delivered. Do everything you can to collect payment from customers as quickly as possible, so be diligent with your record-keeping so you know who still owes you payment. Make sure you’re chasing those payments regularly, so your cash flow doesn’t stagnate.

Consolidate Loans

Consolidating your debts doesn’t erase them, but it can make it easier to pay them back by combining them into one payment with a lower monthly cost that doesn’t affect your credit. By consolidating debts, you deal with a single creditor and can perhaps get a loan with a lower interest rate. This process can be done by a debt consolidation company that will take responsibility for negotiating the new loan, collecting the payments and paying off your previous creditors.

It simplifies the repayment process, allows you to reduce the size of your repayments and can help improve your cash flow position.

Be Transparent

Keeping the true nature of your business’s debt problems to yourself will only cause more stress and pressure on you alone to fix it. You don’t need to let every employee know, but telling a few trusted colleagues can help lessen the burden, and they may be able to offer help and guidance during this stressful time which could result in a better outcome than if you tackle it alone.

Alternatively, professional advice can be invaluable in this kind of situation. Business mentors or an insolvency practitioner can help you plan the best course of action for getting out of debt.

For more guidance and advice about going insolvent, Hudson Weir Insolvency Practitioners can help.

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4 Ways To Cost-effectively Save Money With Business Security

February 17, 2020 By Susan Paige Leave a Comment

Saving money isn’t the simplest thing around, especially when your business is concerned. The company is your bread and butter, and you should do everything in your power to keep it running smoothly.

The issue here is that ensuring that your business is entirely streamlined requires you to spend a significant amount of money. Spending so much on your business isn’t ideal, mainly because most business owners don’t have the budget for it. But its true – you’ll be able to save money by carefully allocating your spending.

The following four tips will generally be applicable to most business types, so without further ado, let’s get into it.

Strict Employee Vetting

When you’re running a business that has more than a few employees, you need to take care of who you are hiring. Employees can be beneficial to the company’s effort, but a bad hire can be just as detrimental to the bottom line.

Having faulty employees that aren’t only lazy with their work, but are actually contributing to the degradation of your business costs you money like crazy.

Solving an issue with an already hired employee can be a laborious process that requires a couple of extra steps like notices, payments, and other things that wind up costing a small fortune.

Employing a robust but fair vetting process beforehand is going to cut down on your business expenses significantly. Vetting your employees based on their skill, their experience, and their general outlook towards your work is going to do wonders for your budget.

Your vetting process when hiring an employee should consist of:

Checking the CV
Checking the References
If they’ve changed a lot of professions, why?
Asking important questions
Calling the reference

Invest Into Actual Security

If you’re running any business that hosts events or operates with any people who aren’t employed in your company, you need to pay mind to the security. The security on any given occasion, location, or business can do as much good as evil.

If you have a good security team protecting your clients and your business, you can rest assured that your business is going to gain some additional reputability. If you have a bad team, on the other hand, it can drive people away from your company.

When picking a security team, make sure that they’re going to perform their job well. Check the employee’s credentials and past gigs to make sure they’re up to the task.

If any criminal incursion occurs, you can rest assured that both your employees and your assets are well-protected. It will save you a fortune in eventual losses or possible lawsuits.

Cybersecurity

When people are running a business, cybersecurity is more often than not wholly overlooked. That is a horrible thing, as employing proper cybersecurity is perhaps one of the most important things you can do.

If you’re running a modern business, you’re most likely to own a myriad of user or customer data. Other forms of company data can be susceptible, as well.

Employing the best cybersecurity or VPN program on the market is going to protect all your data, hide all your browser history, and make sure that you’re protected from:

Hackers
Blackmailers
Scammers
Nosy ISP
Geo-blocked content

An excellent VPN security service can help you avoid all of the issues that come with it. Protecting all your data and ensuring privacy is the first step to protecting yourself when you’re using the internet, thus saving money.

Set and Enforce Firm Policies

Enforcing firm policies can help you in in a myriad of ways. It will not only beef up your security but is going to do wonders when it comes to avoiding costly lawsuits or other business expenses.

If you’re running any type of website, app, or anything with user content, enforce strict password policies. It will protect the users from any possible hack and protect you from any liability.

When you’re running a company and enforcing strict policies with your employees, it will help you build discipline. A happy, disciplined, and efficient employee is going to put out much more work than a lazy one, and firm policies are the way to go about it.

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Image Source: Pixabay.

Predictions For The Evolution of HR Software

January 6, 2020 By Susan Paige Leave a Comment

The rapid evolution of technology in recent years has disrupted how the world does business. Perhaps no other department has been impacted as thoroughly as human resources.

Developments made in HR software are causing a paradigm shift in human capital management. The controversy is running rampant about computers replacing humans, when, in fact, this technology allows HR professionals to have more focus on the people they manage.

Here are five predictions for the evolution of HR software and what it means for businesses.

Automation Will Take Center Stage

Automation is a scary word for many employees, who fear that the removal of simple tasks will result in the elimination of job security. However, automation is meant to reduce monotonous tasks so that human capital can focus on high-value responsibilities.

Not only will HR professionals have to manage the transition and employee concern as automation is integrated throughout a business, but they’ll have to incorporate it into their own processes. Software that automates the employee onboarding process or candidate screening will result in a shift in daily tasks and responsibilities within HR.

Applicant Tracking Systems Will Become the Norm

Gone are the days of sifting through piles of resumes and creating lists and schedules to keep track of everyone. Applicant tracking systems are streamlining the hiring process to cut back on costs and ensure the right person is put in the right role.

Wondering how Applicant Tracking Systems work? This software is used to create a job posting and simultaneously post it across numerous channels. Job seekers apply through those channels, and the applications are submitted to the tracking system. Applicants are screened and sorted– sometimes without human intervention– so that hiring managers can schedule interviews. Results from the interview and references can be recorded within the system to determine the best fit.

This technology will revolutionize the hiring process for businesses with an incredible return on investment.

Centralization Will Be a Priority

Many companies are still working in departmental silos. However, HR is unique in the sense that it integrates with every aspect of the business. In 2020 and beyond, centralization will become a top priority in the HR world.

One of the main shifts businesses will see is the centralization of accounting and HR management software. This will be made possible by workflow collaboration software that allows a single project manager to oversee and coordinate many different people at once across departments. Tasks like payroll, benefits management, and even employee onboarding will be captured in a single, unified software. This interconnectivity between HR and accounting will create a more efficient workflow and a productive environment.

Development of Real-Time Performance Management

The modern world is growing accustomed to instant gratification. Thus, the traditional annual performance review is no longer sufficient. Instead, companies are investing in HR software that allows managers and employees to see real-time performance updates.

This technology helps employees and managers clearly identify expectations and have an open conversation about challenges and barriers. Many of these programs offer incentives like “kudos” that can be sent easily to show appreciation for a job well done. This HR software will improve productivity and employee morale.

Cybersecurity Becomes More Important

With newsworthy data breaches in recent years (Facebook, for example), everyone is more aware of the risks associated with cloud computing and sensitive information. As a result, the future of HR software won’t just be about efficiency and performance, but also about cybersecurity.

As HR holds a lot of sensitive, personal data about employees and the business as a whole, software providers need to prove that they have checks and balances in place. Education about safe computing and internal cybersecurity will also play an essential role in HR.

These upcoming trends in HR software will transform how businesses interact with their employees. By getting ahead of the curve, organizations can improve their productivity and profitability for an edge on the competition.

Key Tips On Saving Money When Running A Business

December 24, 2019 By Susan Paige Leave a Comment

As with your personal life, you also need to save money when running a business. Managing finances can be very challenging. In all areas and stages of your company, you must always try to save money either on fixed or variable costs.This will play a large role in increasing your profit.

How Can You Save Money?

There are many ways to lower costs and save money when running your business, which include the following:

Budget

A budget is a projection of what your expenses and revenue will be for a specific time period. It will serve as a road map that your company must follow.

At the start of the year, budgeting is an integral task you need to do before anything else.

In your budget, the following items should be forecasted: capital expenditures, costs, sales, liabilities, equity, and dividends. It should also indicate your projected cash flow, balance sheet, income statement, operating budget, and the likes.

Every month, you have to monitor your actual numbers and compare them with the ones projected in your budget plan. Reviewing your finances is key to saving money because you can analyze how your business is doing in terms of cash flow.

Telemarketing and Customer Service

Instead of having people going places just to sell your products, why not just have them call your customers? If your agents keep hopping from one place to another, you’ll need to spend a lot of money for their transportation and food allowance.

With telemarketing, you just need employees to make phone calls to your customers. For example, with Drop Cowboy, you can even leave a voicemail without making the phone ring, which is non-invasive on the part of the customers.

On the other hand, you can also cut costs by not hiring a receptionist to take initial calls. With the technology today, an automated system can automatically redirect calls to the right departments. Companies, like Call Cowboy, already offer such kind of service. This comes out cheaper compared to hiring someone to do things manually.

Mind Your Taxes

There are many ways to save on the taxes you pay as a business owner. For one, different cities and areas have varying tax rates. If you are just starting out or is in the process of expanding your venture, choose an area that charges a lower tax rate.

In addition to that, always take note of the deadline of your tax payments. Not paying your taxes on time will result in high penalty fees, which could eat up a big chunk of your profit. Late penalty fees are unnecessary expenditures that you can easily avoid by being more mindful of your tax deadlines.

Also, did you know that donating to charity and organizing outreach projects and events can actually act as a tax shield? A percentage of the money that you donate to charity will be deducted from the tax that you have to pay as a business entity.

Hire Capable People and Invest in People

It’s not the number but the quality of people you hire that will matter in the long run. Hiring someone competent can help you save on salary costs if that one person can effectively do the job of five people. That’s a lot of savings.

You must not only hire competent people, but you also have to make sure that the people who work for you keep growing. To keep your employees knowledgeable and updated with the latest business trends, you can organize training programs and workshops that would enhance their existing skills.

Try Outsourcing Work

There are times when your company doesn’t specialize in certain business functions. When this occurs, outsourcing might be best for you. Outsourcing is the process of hiring someone or an organization outside of your company to complete specific tasks for you.

For example, if you are in the manufacturing business, you can outsource or have somebody take care of the packaging. That way, you can save money on buying equipment for packaging and focus more on manufacturing, which is the core of your business.

Outsourcing doesn’t only apply to your operational processes. You can also do this with your internal departments. For example, you can outsource your accounting to an accounting firm. By doing this, you can have experts and CPAs review your finances to ensure their accuracy.

Take a Look at Operating Expenses

It’s important to take a step back and review your operating expenses. You might be overpaying for something without knowing it. Operating expenses deal with expenses that occur during normal business operations.

Operating expenses include the following:

Utilities
Employee salary, compensation, and benefits
Maintenance
Office Supplies
Rent
Inventory Costs
Marketing Costs
Research and Development

Go through each entry and re-examine the costs. You need to find a balance between efficiency and quality. For example, you don’t need expensive office supplies for your employees to be efficient. You just need supplies that work well, and you can get them at a lower price.

A tip to keep operating expenses low is to get yearly updates on quotations for various equipment, maintenance, office supplies, and others. This way, you can compare different brands and their respective costs. In effect, you’ll get the best bargain, thereby reducing operation costs.

Examine and Cut Down Costs

Another way to save money while running your business is to bring down your costs. Take a deeper look into your expenses and see where you spend the most, which can help you determine which areas you can cut down.

For example, if a certain kind of raw material or equipment is taking up a large percentage of the overall cost, then you can try renegotiating with suppliers. Try looking at the volume and history with the suppliers, then schedule a meeting with them. You can use this history with the suppliers as leverage to get lower rates on your raw materials

Managing inventory is also part of examining your cost. Holding inventory also has a cost that comes with it. Constantly monitoring your supply will make your cash flow more efficient. and your operating cost lower.

When you constantly monitor your inventory, you can also estimate how much you need for the next month or the following month. Because of this, you can order and pay early, which has its advantages. Usually, suppliers would give big discounts for early payers.

If you are a distributor, storing your inventory in warehouses will mean you have to pay lease fees to put your goods in the warehouse. The longer goods are in the warehouse, the higher your lease fees will be. To be able to lower down your expenses, you must make the right estimates of when to order and time your purchases properly.

Minimize Marketing Expenses

Traditional advertising via television ads, newspaper listings, and posters can be expensive. Now, with technology on your side, you are given more options, thus marketing has become significantly more affordable. Also, you can reach more people despite the decreased cost..

The rise of social media has enabled companies to advertise in these online platforms, and at a lower cost. Instead of spending millions on television ads, you will only need a few thousands on social media to get the same reach. On top of that, you will also be able to know the number of clicks and viewers your content or page garners each day.

Go Paperless

Believe it or not, paper can be a big expense for a business. Because of this, cutting down on your use of paper can give you a lot of savings. At the same time, you are also helping the environment.

These are just some ways you can reduce paper use:

Don’t only use one side of the paper. If you want to recopy or print anything, you may use the other side of the paper.
File your papers electronically so that you don’t need to keep recopying.
Reuse paper as scratch paper or for taking down important notes.
Avoid using big fonts and wide margins. You can fit more words with tight margins and smaller fonts.

Doing these simple things will allow you to spend less on paper and still be efficient in running your business. Hitting two birds with one stone, you can also save the environment by practicing this.

Recycle

Recycle whatever it is you can recycle from your office. Not only will you save the environment, but you can also earn a little bit from selling recyclable materials. There are companies that are willing to purchase your company’s recyclables.

Here are some ways that you can promote recycling in your company and earn from it:

Start segregating plastic bottles and biodegradables.
For scratch papers, you can start shredding them and bringing them to recycling sites.
Segregate aluminum cans
Install water catchers in your roof. When it rains, these will catch rainwater, which you can reuse in the toilet for flushing, which, in turn, will bring down your water fees.

Put Up Energy Saving Measures

Electricity bills can also take up quite a percentage of your operating expenses. Establishing energy saving measures in your company will reduce the amount of electricity you use. This, in turn, will lower down your electricity bill. Here are some ways you can do this:

Set an automatic timer for the air conditioning system so it turns off when it must.
Have lots of windows so that you can use natural sunlight instead of turning on the lights.
Leave instructions on workstations to turn off the computers when not in use.
Use motion sensor lights so that they automatically turn off when nobody is around.

Saving on electricity can do both your company and the environment a huge favor.

Don’t Always Buy New Furniture or Equipment

Your company doesn’t always need new stuff for it to function efficiently. There are some second-hand equipment and furniture that will work just fine as well, such as the following:

Printers
Photocopiers
Laptops
Phones
Company cars
Delivery vans
Glassware
Desks
Chairs

Invest In Insurance

With any kind of business, you never know what might happen in the next day or so. In the event that something unfortunate occurs, it’s best that you are covered. This is where insurance comes in.

Although getting insurance will require you to pay some premiums annually, it will all pay off when there’s an emergency. In case your building burns down in a fire, having insurance will help you recover and cushion expenses. You can also start getting auto insurance for your delivery vans and agent cars.

On the other hand, it’s also beneficial to get health insurance. With this, your employees can get the medical help they need faster and without having to worry about expenses. Once they don’t have to worry about expenses and get help faster, they will be able to get back to work quicker as well.

Explore Telecommuting

Telecommuting can be advantageous to your business and employees. If you can allow your employees to work offsite, that would save you a lot of money on overhead costs. You can avoid expenses on electricity and office space. For example, if the work to be done is project-based, your employees can work online to finish the project. They need not to be physically together to work together.

Sad to say, there are certain kinds of functions in the business or kinds of industries that will not be suitable for telecommuting. For instance, if you are in the manufacturing business, people who operate the machines cannot opt to do telecommuting. They need to physically be there to do all the work.

Conclusion

Every penny counts when it comes to your business. Boost your profit-making capacity by making a budget, controlling your expenses, adopting new and cost-efficient strategies, putting up energy-saving measures, and, most importantly, not spending on things that you don’t need. Following these tips, you can save a lot of money without compromising quality and efficiency while running a business.

Facebook Testing ‘Buy’ Button for Small Businesses So You Never Leave Their Site

December 19, 2019 By Jeffrey Strain Leave a Comment

Facebook is testing a new buy button to help small business with ecommerce

Great news out of Facebook if you own a small to medium-sized business. The company is in the process of testing a new “Buy” button which allows the business to embed the button to either their page posts or within Facebook ads run on the site.

The call-to-action button appears in users’ feeds, and it will allow the user to shop and purchase directly from Facebook instead of having to click through to the retailer’s website. The elimination of several clicks and having to go to a new website should increase conversions for the businesses, while keeping users longer and more engaged on the Facebook website; a win-win for both.

The new services was test-launched with the aim at helping small and medium-sized businesses improve their ecommerce, something that many have had trouble doing on their own. While the current test is small, this new platform has the potential to greatly help small businesses market and sell their products on Facebook. It also should make it easier for consumers to purchase items they see and want on the website.

With the new system, when the customer sees something they want to purchase, they can click the “Buy”button, which will encourage them to immediately make the purchase without ever leaving the Facebook page. They will be required to give a debit card or credit card for the transaction, and this will be handled by a third-party processor. Facebook won’t be privy to this card information unless the user opts-in to have their credit card information saved on the site for future purchases. The processor will only share information with the company selling the product needed to fulfill the order, such as the customer’s address, but not the credit card information. Facebook announced in a blog post, “We’ve built this feature with privacy in mind.”

The new feature is currently available at no cost to businesses with no plans to monetize it on the merchant end anytime in the near future. The test hopes to determine how those using Facebook react to the call-to-action, and how successful this is at driving sales to these smaller businesses though the ecommerce platform.

One of the benefits of this new strategy for Facebook is that it will keep users on Facebook pages. Since the consumer doesn’t need to leave to another site to make the purchase, they will remain on the Facebook website. The company hopes this new purchase system will help encourage users to stay on the website for longer periods.

(Photo courtesy of Maria Elena)

How Invoice Software For Small Business Can Help You Monitor Your Money

November 18, 2019 By Susan Paige Leave a Comment

As a small business owner, it’s essential to invest in an innovative invoicing solution so you can get paid fast and stay organized with all your financial transactions. With the complications of manually creating, organizing, and tracking invoices, you need excellent invoice software to make your life easier.

If you need help in monitoring your money efficiently, here are a few ways how this new invoicing technology can help your small business:

You Can Store And Organize All Your Financial Transactions In The Cloud

Using invoice software from reliable providers is essential for storing invoices and other receivables. By being able to keep your financial transactions in the cloud, you’ll never have to worry about checking any information anytime and anywhere.

In fact, with good invoice software, you are no longer required to review piles of folders just to get the information you need. Not only that, but the online storage of information makes it easy to keep track of your money. Just log in to your account, and you can see your financial history right away without stress and delay.

You Can Automate Your Invoicing Tasks

In addition to online storage, getting an invoice software for your small business can also help automate your tasks. Unlike traditional invoicing solutions, you no longer need to keep encoding any information all over again. After entering the data, you’ll only need to record the info once, and, as a result, you can monitor your money quickly and with just a single click.

Moreover, automation means creating invoices quickly. By making and sending out invoices to clients, you’re able to keep track of your money since the invoices you’ve sent can give you an idea of how much money your business is generating. Some software also lets you charge late fees on an invoice.

That said, using an invoice software can make a massive difference in the creation and sending of invoices to several clients. This modern technology is undoubtedly quick, easy, and simple to use. Since invoicing takes a lot of time and attention, the software lets you create invoices in just a few minutes, which, therefore, reduces the hours you spend on the task and gives you more time to monitor your money.

You Can Track And Manage Your Invoices Easily

Invoice software is one of the most useful apps for small business startups. It’s a bookkeeping tool that allows you to determine which invoices you’ve sent are already paid and which aren’t. By identifying those paid from unpaid invoices, it’s easy for small business owners like you to chase after those clients with outstanding accounts.

Because of this, you can quickly keep track of your cash flow and figure out whether your small business is earning a profit or not.

You Can Safeguard Your Files Against Loss And Interference

Using invoice software comes with enhanced security. In the event your computer or laptop crashes, you don’t necessarily need to worry about losing any files since all your financial transactions are safe and backed up in the cloud. And because of the level of security you can get from investing an invoice software, you’re able to monitor your finances safely.

As a result, you can rest knowing that no potential loss or interference from unauthorized parties may put your business and your clients’ information at risk during a transaction.

You Can Easily Send Reminders

Today, everyone is busy and has lots of things to do. This may be one of the reasons why some clients forget to pay their financial obligations on time. So, if you’re worried about not getting paid and being unable to keep track of your profits, then you can utilize a good invoice software to send reminders to clients easily.

Typically, most invoice software comes with an invoice reminder function. Instead of drafting a reminder letter in your email, you can rely on this new technology to create and send reminders for you. As a result, you’ll receive timely payments, which allows you to monitor your money promptly.

You Can Reduce Invoicing Errors And Disputes

In the past few years, most small businesses utilize traditional invoicing solutions that are susceptible to human error. But with the introduction of invoice software in the market, you can minimize the potential errors and disputes that may arise due to human factors.

Always keep in mind that fewer errors in your invoices make it easy for you to monitor your cash flow.

Final Thoughts

With the information mentioned above, we hope you’ll decide to work with an excellent invoice software that lets you monitor your money in the safest and most efficient way possible. Remember, introducing this new invoicing technology to your small business can provide you with automated processes and unquestionable efficiency.