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1 Essential Tip for Becoming a Better Borrower

We've often spoken  about the factors that can help you and your business look more attractive to lenders – like having a strong business credit profile. While important, there's one major factor lenders look at that requires greater attention: cash flow.

James Good, of the Small Business Payments Company, explained to Forbes recently that small businesses need to be able to not just manage their cash flow - but they need to be projecting what it will look like weeks and months in the future. A lender wants to know that you have cash now, but they also want to be assured you have the funds needed to handle a hiccup in payroll or another area of the business. 

However, there are more reasons to project your cash flow months in advance than for the sake of small business loans. Unfortunately, managing cash flow - as Good explained - isn't something most business owners are experts in. 

"A big thorn in the side of almost every small business owner is the challenge of good cash management," Good said to Forbes. "Most small business owners didn't start their businesses to become accountants and most of the tools previously available are very complicated and difficult to use for the uninitiated, or too basic to be of much value."

When you don't have a good handle on your cash flow, there's an increased chance that you'll run into cash problems. Businesses that have a strong handle on their day-to-day finances are less likely to run into trouble because they know the costs they can and can't manage. 

So, in order to become the most attractive borrower you can be, learn the importance of cash flow projection and management. Your business - and your lenders and investors - will thank you for it!

Do you have any tips for managing your cash flow?

Tell us in the comments below. 

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Why It's Absolutely Okay to Start Planning for Retirement

With small business owners busier than ever before, planning for retirement can often get placed on the backburner. 

According to a recent article from the Wall Street Journal, many business owners think the eventual sale of their business can entirely fund their retirement. But, it can be especially difficult to place a future value on your business, especially if growth is largely dependent on a single owner. 

Even though you may not be ready for retirement today, there are some actions you can start taking to prepare yourself:

  • Groom your employees or managers so that you can get more leverage in your business - no one will want to buy a business if you are the main rainmaker 
  • Start understanding your living costs - if your business pays for expenses like your car, computer or travel expenses, those costs will become yours once you sell your business
  • Start taking advantage of financial products - like a 401(k)- to save for retirement. You can save as much as you want annually, but you should still have a separate income stream for yourself. 

What steps are you taking to start planning for retirement?

Tell us in the comments. 

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3 Essential Documents Your Business Needs at the Ready

One of the most important - albeit less thrilling - responsibilities business owners need to pay attention to is their paperwork. 

Although essential when it comes time to pay your taxes in the spring, having your key documents organized and ready is crucial for when you want to access financing. According to The U.S. Small Business Administration, these are the three most important documents you need.

1. Balance sheet
A balance sheet provides an image of what your business' finances look like at the moment, by revealing your assets. This document, in short, shows what equities remain in your business after all liabilities are removed. There are, of course, distinctions to be made between different types of assets - but the balance sheet aims to show what your business' current financial standing is.

2. Profit and loss statement
Often referred to as an income statement, a profit and loss statement shows what your net profit is by subtracting your operating expenses from your gross profit. So not only does this statement show potential investors how much money you can make with specific overhead costs attached, but it can also help individuals and potential lenders to get a handle on how much money your business could make in future months and years.

3. Cash flow statement
A cash flow statement is exactly what it sounds like - it shows how much is coming into your business in revenue, and how much is going out in terms of costs. Like all these other documents, it provides an essential snapshot of your business' financial activities - and can play a crucial role in earning your small business loans. 

What financial documents do you keep at the ready?  

Tell us in the comments below. 

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Confidence among Small Business Owners Continues to Climb

No one would deny that it’s been tough for small business owners in recent years. However, if one recent report is any indication, times are getting easier - or, at least, small business owners are becoming more confident about their ability to weather the storm.

The National Federation of Independent Business recently reported that its small business optimism index moved up by a few points during July. The NFIB index is one of the leading indicators for the small business economy, and July’s rise follows a decline in June. 

Bill Dunkelberg, chief economist for the National Federation, noted that business owners are currently feeling bullish about both business conditions and the outlook for future expansion.

However, there was only a modest rise in the number of firms increasing inventory purchases and creating new jobs. 

Are you feeling optimistic about your small business? 

Tell us in the comments below. 


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3 Insanely Easy Ways to Improve Your Business Credit Score

We've detailed numerous ways business owners can boost their credit scores – including “5-3-2 Rule” and credit blunders to avoid. But what you’re looking for some easier fixes?

Don't fret – here are three easy ways to give your score a boost. But what you’re looking for some easier fixes? 

1. Break your payments up throughout the month
Paying your bills off monthly is well and good, but if you use your cards throughout the week, you may want to consider evening out your balance every Friday. That will limit the amount of credit you're using - and that will improve your credit score. 

2. Maintain long relationships
You can give your credit score a big boost by keeping your trade lines open for at least six months each. You don't want anyone to be thinking that you go through your credit history too quickly, or aren't able to maintain business or payment-related relationships. So maintain your credit accounts for long periods of time, and you'll be putting a step forward toward showing lenders you're a trustworthy client.

So maintain your credit accounts for long periods of time, and you'll be putting a step forward toward showing lenders you're a trustworthy client.

3. When necessary, pay in full to remove a debt from your history
Finally, if you find that you're late on a payment, you want to do everything possible to prevent that debt from having a negative effect on your credit score. Debt collectors will often be willing to remove the debt from your credit score with all major agencies if you're able to pay the expense off in full. That will help you to do what's most important for your business - obtain small business financing support whenever it is needed.

That will help you to do what's most important for your business - obtain small business financing support whenever it is needed.

What methods have you used to boost your credit score?

Tell us in the comments below. 

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Running a Small Business Is No Vacation, OnDeck Study Finds




















Today, OnDeck released the findings of its summer Main Street Pulse Report, a quarterly study of small business trends. The report examined vacation habits of small business owners nationwide, revealing that most are increasingly time-strapped and unable to take vacation.

Based on responses from over 200 small business owners, we found out the following:  

  • Approximately half of small business owners take vacations – Only 57% of small business owners are planning to take a vacation this year
  • Small business owners take very few vacation days – 61% of those planning a vacation will take just one week off per year
  • Most don’t unplug from work while on vacation – 67% check in with work at least once per day. Only 15% will disconnect entirely

Are you planning on taking a vacation this year? 

Tell us in the comments section. 

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1 Simple Rule for Building Better Business Credit

Ever heard of the “5-3-2 Rule”? Neither had we, until we saw this infographic from Bank of America. Having a strong credit profile is key for any business looking to secure financing, and this rule helps business owners stay on track as they build their business credit. 

Maintain 5 active trade accounts
If you want your business credit score to prove to lenders and investors that your business is secure, then you need to maintain five active trade accounts at all times. Any less, and prospective lenders are liable to think that your business' cash flow could eventually become a problem.

Simultaneously manage 3 business credit cards
Try to keep at least three credit cards open - and in constant use - on behalf of your organization. From a lender’s perspective, this method very much preferable to ringing up all your costs, and coming close to the limit, on one card. Handling three at once shows lenders that your business' finances are secure and in very good shape.  

Pay out at least 2 accounts in full
Many lenders are going to want to see that you can make good on financing - so if you're hoping for a strong business credit score, know that you'll do best if you've already obtained and paid off at least two separate business loans. 

What are your thoughts on the “5-3-2” Rule? 

Tell us in the comments below. 


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The Only Gadgets Your Small Business Needs

We've put together a brand-agnostic selection of tools that can make life easier at any office. Better yet, all the tools listed below can be obtained for a low price (or in some cases, for free.) 

Think about all the things you have plugged into USB drives across the office: phones, tablets, external hard drives, keyboards and a mess of other items. What if you could have them all plugged into the same place - and what if they all ran faster than ever before? With a high-speed "USB Hub," you can do that. These items can be found easily anywhere that sells computer tech, as well. 

Electronic signature programs
Think of all the different times you've had to send out contracts, or have received them yourself. It's an annoying process - signing and mailing contracts, copies of contracts, and over again. That's why you should invest in programs that allow you to capture "e-signatures" - you'll be able to stop the mailing, and take care of all these issues via email in a matter of minutes. DocuSign is considered the gold standard of electronic signature programs. 

Cloud-based backup programs
It's the worst nightmare for any business: what if your computers or hard drives are corrupted, and you lose much of your data or files? Now you can protect yourself against that fear. Programs that back up your data to the cloud are easy-to-obtain and can often come at a low-cost. While they were once reserved for larger businesses, these systems like Carbonite are becoming increasingly accessible to small businesses.

What’s your favorite gadget for your small business?
Tell us in the comments below. 

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5 Habits of Outrageously Successful Small Business Owners

Successful small businesses succeed on their own terms. The true legends stake out their own place - they don't follow a well-worn path. However, that doesn't mean that successful businesses don't share a number of common traits. 

1. Have a well-defined business plan and vision
No business succeeds by copying others. And, your business can't succeed if it doesn't have a clear plan for what it wants to achieve and how it expects to achieve it, either. Before you've made your first sale, you should be thinking about the sales you want to make one, two or even five years in the future.

2. Keep up the high morale
High morale is one of the most-important parts of any high-functioning business – both from yourself and your employees. You can have the greatest products on the planet and the strongest business plan, but you still won't get anywhere unless your team wants to get there with you.

3. Have a dedication to your community
Many successful brands receive their first accolades from their local communities (think Under Armor in Baltimore or Shinola in Detroit). So be sure to give back whenever possible, whether it's through a donation to a local cause or a sponsorship of youth sports team. Acts of kindness like this ingratiate yourself with your best customers. 

4. Always think about creative strategies
We're not saying you have to reinvent the wheel - but all businesses thrive if they're able to solve problems and develop products with a creative eye, and in a better or different way than ever before. 

5. Make an enjoyable atmosphere
If nobody enjoys spending time at your store or your location – whether it’s your employees or your customers - you can bet they won't be purchasing your products or services that often. So more than anything else strike to create an inviting and warm environment. 

What’s your best small business habit?

Let us know in the comments.

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What the SBA's New Guidelines Mean For Your Small Business

The U.S. Small Business Administration has changed the guidelines it uses to determine what a "small business" actually is. The new criteria now now allow an estimated 8,500 additional businesses to be eligible for the "small business" title, which comes along with certain federal assistances.  

According to a recent Wall Street Journal report, the criteria determining whether or not an organization is a "small business" hasn’t changed since 2008. The new formula varies greatly across industries. For instance, in some industries, a business with up to 1,500 employees may still be considered a small business – so even a family clothing store bringing in more than $38 million per year or a travel agency with $20.5 million per year can both still qualify as "small."

The change has been met with a certain level of criticism since these larger, small business often have an easier time accessing capital than true “Mom and Pops.” Only 39 percent of businesses with revenue under $5 million successfully obtained bank loans last year, according to the report. The new classifications may make competition for those loans even more intense than it was before.

Have you been impacted by the SBA’s new guidelines?

If so, let us know your experience in the comments section. 

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