1 – No Monthly Bookkeeping Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making. In a word, your business is doomed if you are not doing monthly bookkeeping. Bookkeeping services are dirt cheap compared to most other costs a business will incur. Bookkeeping should be done on a monthly basis along with Management Accounts so that your financial records are always up to date and you can view the financial status of the business (Profit and Loss, Balance Sheet etc). Once a bookkeeping process gets established, the cost and time involved usually goes down. By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs. Business Financing Mistakes

2 – No Projected Cash Flow & Budget Having no meaningful bookkeeping creates a lack of knowledge on where you are. And having no projected cash flow and budget creates a lack of knowledge about where you’re going. Without keeping score, a business tends to stray further and further away from its targets and, invites a crisis that eventually forces the business to change it monthly spending and cash-management habits. A projected cash flow first and foremost needs to be realistic. You should project both a best-case and worst-case scenario based on projected sales and business expenditures. It’s a good idea to aim for the best-case scenario but know how the business would respond should the worst-case scenario transpire. Business Financing Mistakes

3 – Inadequate Credit Control There’s nothing worse than making sales, doing the work, sending your customer an invoice and then not getting paid on time or worse still not getting paid at all! It’s a well-established fact that the longer a debt isn’t collected the less chance it will be collected. Typical credit terms in most established business are 30 days. However, due to a culture amongst some customers of paying late and small business not operating strict credit control, a business can often not get paid on time and fast run out of cash. So how do you avoid this? Well, there are numerous steps you can take but the following 3 steps will help ensure you always get paid and paid on time.

Appoint someone in the business to be in charge of credit control. It’s vital that someone is responsible for sending out invoices and statements; reminding the customer that payment is due, handling queries on invoices etc. Reinforce your payment terms and conditions on your contracts, on your website, on your invoices etc.

It’s important that customers are aware of your payment terms and the consequences of late payment (cessation of service, interest charges etc. ,) Send your invoices on time and include a statement of the account with each invoice. If you don’t send your invoice out at the end of each month how can you expect to get paid before the end of the following month. In a world of tightening credit from banks, strict business finance practices are required even more. You can’t expect your bank to extend your overdraft or facilitate a term loan if you are guilty of any of the 3 above financing mistakes. There’s so much more to business finance and money management than I have covered in this article that I could write a whole book on it! But for the moment if you are starting out or taking over the running of a business and are experiencing working capital or cash-flow difficulties than I would first start investigating these 3 key areas and see that they are being managed diligently. If you do this, than many of your cash-flow difficulties will begin to disappear and your business finances will improve quickly (assuming your business proposition is sound in the first place and sales are strong).

I always have a struggle on casual Fridays. Finding out exactly what business casual dress is was a long and difficult process. That is, until I worked for a fashion company. Even though my position was in payroll I learned a lot about business casual dress and I have taken some time to jot down the information I have obtained.

First of all, never look to the television for inspiration for your business casual dress wardrobe. You and your coworkers will probably be left in tears. Remember that television is a dream world. As a career woman you need to be grounded in the real world to be taken seriously.

When choosing pants and skirts make sure that the items are comfortable. Business casual dress should never be tight and confining. Just imagine sitting through a long meeting with a pair of pants that pull and bunch. Even worse, imagine a skirt that literally binds you and prevents you from breathing. Neither will help you appear confident.

Along with comfort you also need to consider appearance. Clothing that is too loose or wrinkly will only make you look unprofessional. Business casual dress should be comfortable but this doesn’t mean that you can wear pajamas to the office. You do want to communicate that you respect your self as well as your associates.

The length of your pants and skirts are important as well. If your cuffs on your pants tend to rise up a little too much then they need to go. If your skirt slides up you may want to put this clothing item to rest. After all you don’t want to do an impression of Sharon Stone in Basic Instinct at the office. This business casual dress will get you nowhere.

Your tops should always be cleaned and pressed. Save cleavage for happy hour. Your business casual dress shirts should always be professional and appropriate no matter how relaxed the atmosphere is. We love watching Sex and the City but we don’t want to adopt the fashions on the show into our business casual dress.

Advantages of a Fixed Option

A fixed re-financing option is ideal for homeowners with good credit who are able to lock in a favorable interest rate. For these homeowners the interest rate they are able to retain makes it worthwhile for the homeowner to re-finance at the new interest rate. The major advantage to this type of re-financing options is stability. Homeowners who re-finance with a fixed mortgage rate do not have to be concerned about how their payments may vary during the course of the loan period.

Disadvantages of a Fixed Option

Although the ability to lock in a favorable interest rate is an advantage it can also be considered a disadvantage. This is because homeowners who re-finance to obtain a favorable interest rate will not be able to take advantage of subsequent interest rate drops unless they re-finance again in the future. This will result in the homeowner incurring additional closing costs when they re-finance again.

Advantages of an ARM Option

An ARM re-finance option is favorable in situations where the interest rate is expected to drop in the near future. Homeowners who are skilled at predicting trends in the economy and interest rates may consider re-financing with an ARM if they expect the rates to drop during the course of the loan period. However, interest rates are tied to a number of different factors and may rise unexpectedly at any time despite the predictions by industry experts.

A homeowner who can predict the future would be able to determine whether or not an ARM is the best re-financing option. However, since this is not possible homeowners have to either rely on their instincts and hope for the best or select a less risky option such as a fixed interest rate.

Disadvantages of an ARM Option

The most obvious disadvantage to an ARM re-financing option is that the interest rate may rise significantly and unexpectedly. In these situations the homeowner may suddenly find themselves paying significantly more each month to compensate for the higher interest rates. While this is a disadvantage, there are some elements of protection for both the homeowner and the lender. This often comes in the form of a clause in the terms of the contract which prevents the interest rate from being raised or lowered by a certain percentage over a specific period of time.

Consider a Hybrid Re-Financing Option

Homeowners who are undecided and find certain aspects of fixed rate mortgages as well as certain aspects of ARMs to be appealing might consider a hybrid re-financing option. A hybrid loans is one which combines both fixed interest rates and adjustable interest rates. This is often done by offering a fixed interest rate for an introductory period and then converting the mortgage to an ARM. In this option, lenders typically offer introductory interest rates which are extremely enticing to encourage homeowners to choose this option. A hybrid loan may also work in the opposite way by offering an ARM for a certain amount of time and then converting the mortgage to a fixed rate mortgage. This version can be quite risky as the homeowner may find the interest rates at the conclusion of the introductory period are not favorable to the homeowner.

Determine Your Goals for Re-Financing

The first step in any re-financing process should be for the homeowner to determine his goals and why he is considering re-financing. There are many different answers to this question and none of the answers are necessarily right or wrong. The most important thing is that the homeowner is making a decision which helps him achieve his financial goals. While there are no right or wrong answer to why re-financing should be considered there are, however, certain reasons for re-financing which are very common. These reasons include:

* Reducing monthly mortgage payments

* Consolidating existing debts

* Reducing the amount of interest paid over the course of the loan

* Repaying the loan quicker

* Gaining equity quicker

Although the reasons listed above are not the only reason homeowners might consider re-financing, they are some of the most popular reasons. They are included in this article for the purpose of getting the reader thinking. The reader may find their mortgage re-financing strategy fits into one of the above goals or they may have a completely different reason for wanting to re-finance. The reason for wanting to re-finance is not as important as determining this reason. This is because a homeowner, or even a financial advisor, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the homeowner.

Consult with a Re-Financing Expert

Once a homeowner has figured out why they want to re-finance, the homeowner should consider meeting with a re-financing expert to determine the best refinancing strategy. This will likely be a strategy which is financially sound but is also still geared to meeting the needs of the homeowner.

Homeowners who feel as though they are particularly well versed in the subject of re-financing might consider skipping the option of consulting with a re-financing expert. However, this is not recommended because even the most educated homeowner may not be aware of the newest re-financing options being offered by lenders.

While not understanding all the options may not seem like a big deal, it can have a significant impact. Homeowners may not even be aware of mistakes they are making but they may here of friends who re-financed under similar conditions and receive more favorable terms. Hearing these scenarios can be quite disheartening for some homeowners especially if they could have saved considerably more while re-financing.

Consider Not Re-Financing as a Viable Option

Homeowners who are considering re-financing may realize the importance of evaluating a number of different re-financing options to determine which option is best but these same homeowners may not realize they should also carefully consider not re-financing as an option. This is often referred to as the “do nothing” option because it refers to the conditions which will exist if the homeowner does not make a change in their mortgage situation.

For each re-financing option considered, the homeowner should determine the estimated monthly payment, amount of interest paid during the course of the loan, year in which the loan will be fully repaid and the amount of time the homeowner will have to remain in the home to recoup closing costs associated with re-financing. Homeowners should also determine these values for the current mortgage. This can be very helpful for comparison purposes. Homeowners can compare these results and often the best option is quite clear from these numeric calculations. However, if the analysis does not yield a clear cut answer, the homeowner may have to evaluate secondary characteristics to make the best possible decision.

]]> http://www.gilbertgibsons.com/finance/are-you-considering-re-financing/feed/ 0 http://www.gilbertgibsons.com/business/important-things-to-consider-when-starting-a-new-business/ http://www.gilbertgibsons.com/business/important-things-to-consider-when-starting-a-new-business/#comments Fri, 29 Jul 2011 03:50:54 +0000 admin http://www.gilbertgibsons.com/?p=1726 Are you considering to start your own business? Starting a business is a good thing but the first thing you must do is to perform some self evaluation. This is important because running and managing a business is not a casual undertaking, the odds are stacked against you. There will be challenges and setbacks along the way. Therefore, it is always a good thing to start doing some self evaluation before you make a final decision. Ask yourself some of the following questions?Are you ready to become an Entrepreneur? The word ‘entrepreneur’ sounds good but to be a successful entrepreneur is not an easy task. Are you a persistent person? Do you give up easily? Are you willing to face the odds of failure in business? Are you committed enough to go all the way?Try to answer those questions honestly. If you do that, you will have a good feel whether you should jump into a business or just stay with your current employment. If you don’t have the ability to run a business, it is better for you to stay as an employee. Note that there is nothing wrong with working for others. If you can be successful as an employee as well. Establishing a business is a good thing but you must also remember that in running your own business, you should be ready to face the difficulties and setbacks that will come along. Average business enterprises face a very challenging reality in the world of business; every single day the challenge of how to get ahead of the competition is apparent. One major issue every business owner is going to face is management problems. Considering that it is a start-up and on a small-scale level, majority of the decision-making and planning would come from the business owner. But there are small-scale entrepreneurs who succeed in their goals and make it through in their operations. Here are some of the managerial issues you must consider thoroughly when setting up a new business: MARKETMake sure that there is a market for your products and services. In order to find out this information, you need to conduct a market research. You must always research and investigate your marketplace before you set up your business enterprise. PLANNINGYou must have a plan that can guide you on how to market your business. What resources you need and what management structure or control you want to put in place. If you don’t plan, you are setting yourself up for a failure. So, careful planning when starting out a new business is crucial. COMMITMENTAs mentioned earlier, starting a business is not a casual undertaking. Business is not a hobby, if you run your business as hobby, you will not succeed. So, strong commitment and determination are needed to run a business, be prepared to work hard. SKILLSThere are people who have the knack for running a business but lack the ability to manage and facilitate the people. For start-up enterprises, the ownership is more on self-orientation because of the fact that it is a new business. The management approach is more of a personalized one, instead of being institutionalized. Some business owners find it difficult to attend to the actual needs of the business and at the same time, lead the employees. In order to solve this problem, entrepreneurs should attend leadership workshops for proper training or they can assign trusted and potential employees to manage the people. EMPLOYMENTAnother issue with start-up entrepreneurs is difficulty in finding and hiring potential employees to join the company. This is because of unattractive compensation, limited job security, and low status from being a part of an average business enterprise. TAXATIONMake sure you find a good accountant that can help and advise you on the tax issue. COMPETITIONTake some time to study and understand your competitors. Find out what king of marketing strategy are they using and ask yourself if you can do better? Check out the quality of their products, check out their customer service and check out how they position their business. Make sure you consider all the abovementioned issues before investing in a new business venture.