cash flow business

"If it can be manufactured, it can be leased." For the past decade or so, this statement has become more and more true to fact. From computer software to commercial aircraft, equipment leases are utilized day in and day out in a constantly changing and highly aggressive business environment worldwide. At the same time, expand operations or to obtain a competitive advantage for their maintenance, business capital of all types and sizes constantly striving to find creative ways to save is. Many have turned to leasing their equipment to help in the effort. For this reason, the leasing industry is being defined as a major player in equipment financing today.

So, why should you join these businesses in choosing to lease? Well, one key factor is that the commencement of a lease can be done with very little out of pocket expense. Two advanced payments or an equal security deposit is usually all that's required. Couple this with the fact that for many leases, particularly those under $75,000, a simple one page credit application is all that is needed to be considered for approval. Compare this against an equipment loan, with it's more extensive paperwork and the resulting 10 to 50 percent down payment required to begin the transaction.

Leasing will also allow your business to maintain credit lines with the banks. This preserves the company's borrowing power for future expansion, investing, or other types of growth where leases cannot satisfy the need.

Many business owners don't like the idea of paying a premium rate in order to both own and use equipment. If obsolescence is an issue, such as in the hi-tech sector, most companies find it more desirable to be able to walk away from outdated equipment having completed a short term lease. The average term runs anywhere from 2 to 5 years, after which the business can begin another lease and acquire more, up-to-date equipment. This progression can give your company a vital edge over it's competitors. Other leasing benefits could be expounded upon, such as the tax advantages, lower monthly payments, fixed expenses and the off-setting of inflation, but you can see the point.

Now, simply realizing that leasing is beneficial for your business and then pursuing it as a course of action is only the start. Like bank loans, there are elements of a lease request that increase the chances of funding. That may seem like a no-brainer, but many business owners expect more leniency from lessors than any lending institution is able to provide. Leasing companies, like your business, are in the process to make money. Therefore, some consideration on your part is in order. You should try to give the lessor at least a 70 percent chance of funding your request. Below are the most crucial points of review:

Your Time in Business - Since about 90 percent of all businesses fail in the first three years, most lessors will require of the lessee a minimum of two years in business. In addition, there is generally a maximum transaction amount of $10,000 to $15,000 for businesses under three years old. However, some lessors, in order to compete in their market, have relaxed those requirements or developed special programs for startups and young companies. These types of programs will obviously demand higher lease rates, but the ability for a new business to obtain necessary equipment fairly quickly and with a minimum of paperwork still makes the process very worthwhile.

Credit History of Guarantor(s) - Lessors will make decisions based on a lessee's credit history after reviewing their consumer and/or business credit report. The leasing company looks for numerous late or delinquent credit commitments, lawsuits or judgments, bankruptcy, unverified residence, short credit history, and debt larger than what is stated on the application. Keep in mind, however, that some of the above problems can still be overcome during the approval process.

Bank Relationship - Your business should have a checking account that has been established for at least two years and has had an adequate average daily balance for that period of time. If there have been any NSF's, they must not be recent.

Trade Relationships - It's a strong indicator that your business has good cash flow if discounts are offered (i.e., 2% 10 days: net 30 days). The leasing company looks for trade accounts that are paid on time and within the terms of agreement.

Financial Statements - Generally, if the lease amount is more than $50,000 to $75,000, a full financial package is mandatory. This includes, but is not necessarily limited to, the last two year end financial statements, with a complete balance sheet and profit and loss statement. An interim statement for the current and last year's comparative period is often required as well if the year-end financials are over six months old.

Other considerations include: the type and cost comparisons of the equipment (collateral), the extent of the lessee's trade credit and bank borrowing lines, and leasing history of the business.

Though it isn't crucial to have every one of the afore mentioned points strong, an above average ranking in the majority of them greatly increases the probability of funding. It also increases your likelihood of receiving a better rate. If your business demonstrates strength in only one or two of these areas, it is still possible to secure the financing, though the choice of lessors becomes a bit more limited and the elevated risk is reflected by a higher lease rate.

It's always in a company's best interest for the decision-makers to consider leasing as a means of capital conservation. And as you can see, it's also important to prepare for the transaction should the decision be made to pursue it. The majority of businesses that utilize equipment leasing each year in the United States and Canada continue to do so with at least some of their equipment thereafter. Contacting a leasing company representative or a broker can help you determine if leasing can create an environment of improved cash flow and an opportunity for growth in your business.

Mark Uptain is a Business Finance Consultant residing in Washington State. His website, http://www.EquipmentLeasingSource.com offers free equipment leasing information and quotes to businesses throughout the United States and Canada.

cash flow business

I'm not a team sports guy. So, this time of year my head isn't spinning with Super Bowl afterthoughts or dreams of missed calls and dropped passes. But I did watch the Super Bowl. And I enjoyed it.

See, there is a not-so-obvious element of individual competition there that I like. In fact, it's probably the part that most of us casual observers enjoy most - the commercials. While Super Bowl commercials may not be the most cost effective use of a marketing budget (they have singlehandedly sunk large companies into financial ruin) they do provide good lessons for entrepreneurs like us.

How?

Well, it's hard to squeeze a message into 30 seconds. Near impossible. Yet, as a home business owner you MUST do it. And you must do it effectively if you want to leave a lasting impression.

"On whom," you ask?

On anyone and everyone you meet.

So, I always recommend that every home-based entrepreneur come up with his or her own "30 Second Face-to-Face Commercial." Word of mouth is your most powerful source of advertising. And it's free. But what better place to take a cue from than the $2.6 million sound bites on Super Bowl Sunday.

In 30 seconds you don't have time for detail. Instead, if necessary, who will forward the important messages, how to benefit customers and about what makes you feel you must.

Some commercials do it... Take FedEx's pre-historic slant on safe, reliable delivery.

Some commercials don't... Remember the cat in the kitchen from last year. Good. Now, remember what they were selling? NOPE.

When you're coming up with your personal commercial, consider these three points:

1) How do I describe what I do in less than five seconds?

If it takes longer than that, you're confusing your customer. If you make lawns greener, tell your customer that. If you help people free themselves of debt, say that. Don't bore your customers with details.

2) What is the number one benefit my company provides over anything else?

No matter what you're saying, your customer is thinking one thing: "How does this benefit me?" So, don't forget to tell them that. Volvos are safe. FedEx is reliable. BMW is the "Ultimate Driving Machine," packed with speed and performance. What are you offering EXACTLY? If you can summarize your key benefit in one sentence, you're doing well.

3) What should your customer do NOW?

This is the part most Super Bowl commercials forget. Tell you customer exactly what they should do next. Whether you want them to call you, have one of their clients call you, visit a web site or mail in a form... tell them exactly how you can help.

Maybe if the big spenders had listened to this advice, there would be a few less teary-eyed ad executives on Madison Avenue this month.

By the way, this years winners are...

FedEx...

GoDaddy...

And Burger King.

I think the Steelers might have won the game.

cash flow business

A client set me a puzzle the other day when he chose "Auditing my cash flows" as the goal for our session.
He had just had a meeting with his accountant and was embarrassed to find he could not explain discrepancies between his incoming and outgoing monies. How could he stop the cash leakage and was it down to commercial folly or someone ripping him off? Here are some of the ideas we generated:

How do you accumulate evidence?

A standard audit principle is that "If it's not recorded, it didn't happen". So every time you buy or sell anything, you need to be given an invoice, bill, chit or receipt. If the cost is less than £10, write one for yourself - as a record of date, supplier and cash value. You can insist the suppliers deliver their goods with an Invoice.

BACS transfers, credit payments and debit cards automatically provide this sort of forensic evidence so you are well advised to stop paying or receiving cash and to channel everything through your plastic and electronic banking.

Who do you trust to act for you?

You can use the division of labour to create the controls and counter-checks that you need - so that the employee needing payment is not the person who signs the cheque, the storekeeper does not sign the issuance chit and the accountant does not tally the bank statements.

In a similar manner, apply reality checks to your sales activities:

• A bad sale or bad debt is a waste of your resources.
• If sales staff give discounts and credit periods that should reduce their commission and rewards. Then sales enthusiasm will be tempered by the risks they take with your money.
• Sales people should be rotated around the major accounts and sales regions before they become too cosy and forget how to see their prospects with fresh eyes.

Timing your cash flows can be art but with a careful approach, you can make it a science:

• The Purchase ledger should lists all due payments and Payroll should predict your wage payment so you can plan your payments.
• The Sales ledger holds the details of sales and any credit given to debtors, their expected payments, the actual payments of cash you have received and the dates of each so you can plan your receipts.
• You should track the difference between your receipts (cash in) and payments (cash out) at least on a weekly basis - what you measure you can manage.

So my client took these ideas for careful management of his cashflows and has been applying them over the past three months. Already he feels he has a better grip on what is happening and how his accounting numbers are put together.

He is also much clearer about who he can trust and who he needs to watch in case they are bending the figures. I was interested to hear that "storage wastage" and "sales shrinkage" had reduced - and that alone paid for my invoice.

Adrian Pepper coaches people through business and personal difficulties, helping companies figure out what to do, how to move forward and what to get organised. You can contact him through Help4You Ltd, through his website at http://www.help4you.ltd.uk or by phone +44-7773-380133. At http://feeds.feedburner.com/help4you, you can listen to his podcast for small businesses.

cash flow business

In network marketing, as in any business, it takes time to see a profit.  There are tax deductible expenses that you must expect to put out for marketing, training and supplies. Fortunately, most of those expenses are far less than you would need to spend on a business that you start from scratch. It is important, during the growing stages of your business, to not only manage your money correctly but also find ways to create multiple income streams of income that will pay for your start up and growth costs. Below are five ways you can grow your business profitably from the start without going into debt.

1. Relationship Marketing:  The word network in network marketing means just that. Profits are made from forming relationships with people who become clients and prospects. Certain types of marketing techniques are not as effective. They include print advertising, buying leads, or cold calling. Social Networking is proving to be a powerful tool to create relationships on line and it is free.  Sites such as Facebook, Twitter and My Space allow you to meet new friends and prospective relationships on a daily basis. For Mompreneurs, who have families to run along with their businesses, this can save time, babysitting, and money.
2. Know Your Compensation Plan: In network marketing there are usually several ways to attain more profitable amounts of income from the start. Creating a customer base that generates sales will always sustain your business.  Recruiting adds residual income.  Become aware of what it takes to move up in your particular company and how much you can earn when you reach a new level.  It is surprising how much income representatives throw away simply because they do not know the rules of their business.
3. Harness the Power of the Internet:  In establishing your business, you want people to see you as an expert in your field.  You cannot do that simply by using your corporate website. Most network marketing companies will not allow you to customize their duplicating sites.  What you can do is create your own website or blog to sell your most important product which is you. Be aware of the rules your company has for marketing on the Internet. You will not want to use your company name, trademarks or products on your website or blog.  Add content that will be valuable to your customers or future prospects. For instance, if you are in the beauty industry, offer tips to look younger or how to apply makeup. Use an auto responder service to collect names of interested parties and send them a newsletter to introduce them to what your business is.
4. Learn How to Market Your Business:  Many companies offer in house training that is free or affordable for you. Companies usually focus on traditional forms of marketing which is extremely useful. I would encourage you to  take full advantage of it.  Not all companies offer that service and many do not focus on Internet marketing. Training is generally geared for the status quo who are not Internet savvy. There are systems of training that you can tap into to develop your marketing skills and show you how to take advantage of on line marketing as well. 
5. Earn Affiliate Income as You Learn:  If you are an avid blogger, social net worker or article writer, you can also earn affiliate income from products that other Mompreneurs like you use to market their own businesses with or simply consume.

Creating multiple sources of cash flow in addition to income from your business will help your business survive as you invest to grow it.  This will eliminate debt and frustration that can cause you to give up and quit.

I'm Rebecca L. Olkowski and I'm a direct sales attraction marketing expert.

I offer strategies to help attract new customers and customers with quality business to develop your talents, overcome their fear and create personal meaning of your success.. We already know how to work our business. The problem is, we just are not doing it. Discover the missing link the top 5% of direct sellers and network marketers have figured out, that will create success and happiness in your life.

I invite you to visit my blog at http://mypinkpizazz.com

Register to receive our free weekly newsletter and video series with tips and weekly exercises by entering your name and email on my blog.

I'm looking forward to connecting with you. Follow me on Twitter http://www.twitter.com/rebeccaolkowski

cash flow business

Small business owners can relieve a lot of their own cash flow problems, according to Caroline Jordan, small business advisor and author. "Small business owners have more control over their cash flow than they realize." says Jordan.

To help you get a jumpstart on solving your own cash flow woes, Jordan offers a free, "Cash Flow Master checklist" that you can get by sending a blank email to TheJordanResult-110571@autocontactor.com. Jordan also suggests the following tips to help you understand why cash flow problems plague 66% of small businesses.

1. Avoid the dreaded "Fly by the Seat of Your Pants" accounting method.--Businesses need to systematically track income, expenses, accounts receivable, and accounts payable. If you only know how your business is doing once a year at tax time, you're bound to end up deeply mired in the Cash Flow Swamp.

2. Developing "Strength in Numbers"--Once you have your accounting system in place you need to learn what the numbers are telling you and how to use those numbers to manage and grow your business.

3. Keep strict control of credit - Business owners can get their credit trouble in two different ways; poor credit practices and shortsighted use of credit from banks, credit cards, and other providers .

4. Be sure your Receivables and Payables "play nice" together--The money owed to you by your customers should arrive in time for you to pay your vendors and your employees. When your customers take 60 days to pay and your vendors want to be paid in 30 days, you can quickly end up with a Cash Flow Crunch.

5. Make decisions based on Cash Flow not Profit--Many businesses that fail are profitable when the doors close. What those businesses don't have is CASH. When you pursue that big, juicy contract or think about hiring another employee, always ask yourself "What will this do to my cash flow?"

6. Don't forget your debt to society-- Some bills are easy to forget. Bills like sales tax, payroll taxes, and estimated taxes. Ignoring them doesn't make them go away. Planning ahead makes the bite easier to take and keeps your from suffering Tax Day sticker shock. Scrambling to find money for taxes causes major cash flow problems.

7. Don't spend your company's future on a speed boat--Everybody loves toys. Don't make the mistake of thinking all the profits of your business are "fun money". You've heard it many times from personal financial planners that you should have enough cash put aside for six months of expenses. This is true for your business, too. Sales ebb and flow. Expenses rise. Customers leave. Vehicles break down. Computers fry. The number one rule of small business is "Stuff Happens". Having a reserve of cash keeps your cash flow from tanking every time a new challenge appears.

Caroline Jordan, MBA is the small business Cash Flow Master. Get more free cash flow resources by visiting [http://www.TheJordanResult.com/mastering.html]

cash flow business

Cash Flow or cash flow statement reflects the flow of funds in a firm. It is used to determine the state of liquidity or solvency of an organization. It takes into account transactions involving cash and cash equivalents alone. Things like depreciation, bad debts etc are not considered. This flow brings into the picture activities in operations, investments and financing. 

With the statement that shows cash flow you can have see if a firm's financial health is on a sound footing. You can understand the organization's preparedness to modify the flows based on future demands. It can also be used to compare the performance of different companies' irons effective because the differences that may arise from different accounting methods used. Cash flow statement can be a predictor of  flows in future - indicating amount, probability of getting and timelines.  

Cash flow can be said to be one of the most crucial factors for business survival. Therefore it becomes necessary to carefully monitor and control all the different parameters that affect the inflow and outflow of cash into a business. A good business plan should include projections at least for one year ahead so that you can plan your strategies and operations better.  

To tightly control this flow it is important to have some one dedicated for the associated activities like invoice generation, collection, customer payments, follow-up etc. This becomes especially true in a business to business model where payments typically happen over a period of months after the actual sale. 

Having a collection process that works can ensure that your organization has healthy cash flows without jeopardizing customer relations. Your customers can be made to understand that they will get the best of services when they pay on time and if they don't you can have a plan of action that gets the dues back ASAP.

Roland Poitevin is a dedicated writer with a passion for business and environmental issues. You can check out his new website at Gun Safes which helps people find the The Best Gun Safes Available and information they are looking relating to this subject

cash flow business

One of the statements I most often hear from people is "I can't get ahead because I'm living paycheck-to-paycheck." Well, starting a small or home-based business is a great way to immediately increase your cash flow and begin building wealth.

By starting a small or home-based business, you are likely to increase your tax deductions, so you can work with your accountant and adjust your withholdings to free up more cash flow throughout the year to invest or operate your business. This is preferable to let the government have your money all year will not pay a penny interest.

The government encourages business ownership and rewards entrepreneurs with increased tax credits, deductions and shelters. And not only do you have these lucrative tax benefits through your business, you also have the opportunity to stash away more money for retirement by setting up a SEP IRA, Keogh plan or 401(k) for your company.

When it comes to financing your business, there are quite a few options available. For smaller companies, you can partner with others, pull in sponsors and develop trade lines of credit, which are surprisingly easy to get for those with the right knowledge and properly structured businesses.

If you need to travel, purchase office supplies, computer equipment and other necessities for your business, this can all be done through your company using business credit that does not require a personal guarantee and you can receive major tax deductions for doing it.

Take a moment to think about your passion and how you can start building wealth through your own business. If you are struggling to find a unique idea, don't try to reinvent the wheel. Find a concept that is working well in another market and bring it to yours or vice versa. Think nationally or internationally and create local partnerships. Once your company is established, use strong branding, increased integration, and top-tier strategic partnerships to fend off competition.

Remember, in order to build significant wealth, it is important to move away from a one-to-one relationship with money, where you trade an hour of your time for a specific dollar amount. Instead, dramatically increase your leverage by mastering the ability to create a product or service once, that you can sell infinitely.

William R. Patterson is CEO of The Baron Solution Group. He is an internationally recognized business and wealth coach who has been a featured guest on over 300 television and radio programs. William is an award-winning speaker and best-selling co-author of The Baron Son. He is also winner of three 2008 Web awards including Best Wealth-Building Site. His renowned BARON Coaching Program integrates over 200 business and financial accelerators and 500 wealth-building resources to help entrepreneurs rapidly achieve their goals. For more information, visit http://www.baronseries.com/coaching.htm.

cash flow business