Small Business Financing

finances

Financing can be one of the biggest obstacles small business owners face. Proper financing can help your business survive, grow or expand and increase profits. The alternative can be as severe as business failure.

A small business' primary use of a commercial finance company is to borrow money for the purchase of inventory and equipment, and to meet seasonal cash flow needs. A trustworthy financier can be an asset to any small business. While right now may be the perfect time to apply for a loan to purchase more equipment, finding a good lender may prove to be challenging. When shopping for a commercial finance company, look for the following qualities:

  • Doesn’t sell or broker loans to third parties. You shouldn’t have to worry whether the people you deal with today will be there tomorrow.
  • Provides prompt service. A good lender is available to address your issues, problems and concerns, and then respond promptly to your needs.
  • Understands the unique needs of small business. The lender should work with you throughout the business cycle by offering such options as seasonal financing.
  • Does not require outside collateral. Instead of pledging your home or other assets to secure financing, look for a lender that will apply judgment, not rules, in special circumstances.
  • Has competitive rates. Compare rates but understand that the lowest rate will not guarantee you the best service. Weigh the two carefully before making your decision.

Not sure if you need financing or if you found a good lender? Contact us for advice!

Overtime Laws Are Changing in December

pay check statementThe rules for overtime pay are changing and small business owners need to know how these changes will impact their business.

Beginning December 1, 2016, the U.S. Department of Labor (DOL) will require employers to pay their employees overtime pay when they work more than 40 hours in a given week if those employees earn less than $913 per week ($47,476 per year). “White collar” workers who meet this salary requirement and perform administrative, executive, or professional duties as defined by the DOL won’t be required to be paid overtime. An administrative, executive or professional employee with total annual compensation of at least $134,004 is exempt without meeting the full duties test. This new rule also allows bonuses and incentive pay to count towards up to 10% of the new salary level.

There are some things you can do now in order to make sure that you’re in compliance with the new rules. For starters, take an assessment of your current salaries and job descriptions and determine whether you have any exempt employees who are already earning a salary above (or perhaps nearing) the threshold. You may also need to identify the non-exempt positions and shuffle workers around as necessary.

Your business will have three choices. You can either:

  • Increase exempt workers’ salaries so that they exceed the new overtime wage base;
  • Leave salaries at current levels and pay overtime for hours over the 40 hours per week threshold; or,
  • Limit workers’ hours to less than 40 hours per week so that you never need to pay overtime. Alternatively, some businesses can benefit from hiring additional staff and reducing the amount of hours worked by each employee, so that the same amount of work is performed but with less risk of exposure to overtime pay.

It may be that using a combination of the above approaches is the best option. Regardless of which method you use, always be sure to talk with your employees about any changes to their pay before making adjustments. Contact us today to discuss which method works best for your business.

Getting More From Your Tax Preparer

more_from_tax_preparer_0816Do you find yourself needing advice, a plan for the future, or a trusted resource to help you set goals and stay focused on achieving them? Padgett Business Services® offers more than just tax preparation and monthly accounting services. We also provide strategic planning through ongoing communication not limited to just tax season.

We can help you focus on tomorrow by customizing a plan for you and your business today based upon your short and long-term goals. Developing a plan early and revisiting it throughout the year will not only help you stay motivated, but will also determine if adjustments are needed to ensure you reach your goals.

The days of meeting with your accountant once or twice a year to report the past is over! By staying engaged with you throughout the year, we can offer tax planning strategies and identify opportunities for real tax savings for you and your business.

With the fast-paced technological age we live in, you need more than just a tax preparer! We have the capabilities to provide you with real-time information, allowing you to make more informed decisions. You need a small business advisor who’s proactive and has the expertise necessary to help your business stay competitive in today’s marketplace. Let us be the trusted resource you turn to, not only for tax preparation but also for future tax planning.

Look to the U.S. Dollar When Making Your Next Business Decision

us dollar photoAs a small business owner, just keeping your company running can be hard enough. From managing teams to managing your finances, there is little time left to find new ways to make your money work for you. One often overlooked area for large savings is understanding how and when your home currency can work to your advantage. In recent months, the Greenback’s strong performance versus international currencies has uncovered just this opportunity, an opportunity that can save your business hundreds if not thousands of dollars. Outlined below are a few quick tips on how you and your business can make the most of this all-rare situation.

The Do’s and Don’ts of Early Profit Spending

business chart photoAs you make the transition from in-the-red to in-the-black take a moment to congratulate yourself. You’ve done it! The company you built from an idea is now turning a profit. How and where you spend those hard-earned dollars will fuel your business’s growth or speed its failure.

While giving yourself a raise and a vacation may be the first things that come to mind as you begin to see dollar signs, the best way to determine where to invest profits is to pinpoint what is currently making your company profitable as well as what is costing you money.

Investing in stellar talent is an excellent way to use some of your profits. Think about the biggest opportunity within your business. If you scout and hire a key employee to pursue that opportunity, they will increase the profit-generating side of your company and eventually cover their salary. Conversely, rashly hiring a slew of employees with undefined roles will create a payroll that consumes your profits and a team that monopolizes your time needing management.

Technology or tools that you couldn’t afford as a startup may now be within budget. Again, think about what one thing would most benefit your company and either save money or make money. Is there a technology that would increase productivity and eliminate a source of friction in your business? Do your homework and talk to other entrepreneurs about the technology and tools they are using. Most will give you honest answers that will help you find the exact thing you are searching for and could save you misspending thousands of dollars.

3 Ways Emerging Entrepreneurs Run Financially Sound Businesses

american entrepreneurs photoSecuring funding is a major feat for any brand and requires a great deal of planning and expertise. However, the real value comes from turning that initial support into long-term growth — transforming a spark into a sustainable fire. Without financial stability, eCommerce brands lack the foundation to tackle key business endeavors like evolving product lines, expanding geographic storefronts or making new investments into shipping and packaging that enhance the customer experience.

This is particularly true for emerging businesses transitioning from angel or first-round funding sources into companies with verified equity. These brands are no longer simply selling an idea but must be able to back their entire business model with a concrete financial plan.

As both the CEO of Dotcom Distribution and a CPA, keeping track of our financial standing is a critical component of managing a business — at any stage, but especially in the early days. With a lineup of clients funded heavily by private equity, I’ve seen my fair share of financial successes, as well as blunders. With 50 percent of U.S. businesses failing within their first five years, it’s important that any emerging company makes smart financial decisions.

Here are three tips I find valuable when helping entrepreneurs keep their brands out of finance troubles.

Photo by Tech.Co (formerly Tech Cocktail)

4 Tips for Revving Up Revenue When You Need It Most

race photoSmall business owners typically start a business because they have a specific passion or want to be their own boss. This vision is only the beginning of being an entrepreneur; the hard task is to generate a profit over time.

Critical to creating a profitable operation is to set a cash flow management plan. A business’ ledger is more than just numbers — it shows how the business is performing and impacts salaries and the ability to obtain a loan.

Here are key aspects to developing a clear cash management plan.

Why So Many Business People Struggle with Personal Finance

finance photoBusiness executives and owners alike struggle with their own personal finances. In some cases, it means that big salaries leave extra money on the table for frivolous spending. Rather than investing money for large capital gains later, funds are spent on material things. Some businesspeople believe that your status in society is based upon the material things you own. Money does not necessarily mean status. Having your finances in order is far more important than what you’re showing off materialistically.

Spending Separations

Many business professionals, especially small business owners, fail to separate personal finance expenses from business expenses. What this does is creates a mess at tax time. It also makes it nearly impossible for a businessperson to successfully run a business since business funds should not be used to pay personal debts. You have to be able to separate your expenses effectively. Your personal profits from the business should go back into it as an investment. This way, you are receiving a return on your own, personal investment.

3 Tips for Giving Your Small Business a Financial Spring Cleaning

spring cleaning photoSpring cleaning season is upon us and it’s not just time to declutter your office or take inventory, it’s also the right time of year for small business owners to get organized financially. From reviewing business expenses, to managing cash flow and revising business plans, every business owner can benefit from a financial refresh. Below are three financial tips to help you stay on track this season:

Restore your business expenses.

As a small business owner, you’re likely responsible for filing your taxes on a quarterly basis. If you don’t already do this, establish a separate bank account dedicated to your taxes and use it to set aside a monthly amount toward estimated taxes. Also, keeping business checking and credit accounts separate from personal accounts can help you maintain accurate and complete records of all business-related income and expenses, and can help you plan accordingly for when tax payments are due.

If you’re unsure about your estimated tax obligations, it’s wise to consult a tax specialist who can advise you on the best calculation method for your business. They can also help you to properly track and record your earnings and deductions.

Photo by storebukkebruse

4 Effective Strategies to Increase Your Bottom Line

profit photoWhen business owners strategize ways to increase profits, their energy is usually focused on how they can attract more customers to generate additional sales. However, working smarter — not harder — is the key to boosting the bottom line. Improving net earnings is directly linked to controlling costs, increasing productivity, marketing resourcefully and tightening credit terms.

Strategies to Increase Your Bottom Line

Train Employees to Increase Productivity

Well-trained employees who know the scope of their jobs and are held accountable for their productivity can save companies thousands of dollars each year. The time and money invested in training employees to be savvy customer service representatives, enthusiastic brand ambassadors and productive team members are returned in higher-quality products, increased output, happier customers and better retention rates. Along with training, productivity tracking programs can identify which employees are excelling at their jobs and which under-performing employees need extra support. Strong training programs focus on developing functional skills, improving company processes and streamlining strategic goals.

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