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How a Small Business Loan Can Save You Money

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Small business loans are powerful tools. When utilized responsibly, they can provide the resources needed to launch a business operation, improve an existing one, or expand the business so that it can reach more customers. Along the way, that small business loan can help the company stay in the black. Here are a few of the ways that the loan will save the company money over the long haul.

Starting Up Without Investors

Conventional wisdom dictates that entrepreneurs don’t use their own resources to start up a new business venture. While there are times when that does make sense, there are other times when the founder wants to maintain complete control. Keeping control is more difficult when there are investors who expect answers and who want to have some say in how the company operates.

Many people are surprised to learn that a solid credit rating and a strong business plan is often all it takes to secure a small business loan. Provided the amount is sufficient to get the company through that first year of operation, and the founder already has resources on hand to make the monthly loan payments, there is no reason to cede any control to other parties.

Upgrading Machinery and Equipment

The small business started out with refurbished equipment that served the operation well for several years. Now the time has come to think about upgrades. Rather than attempting to fund those upgrades using the revenue stream or dipping into whatever reserves the company has, why not secure a small business loan? In the best case scenario, the new equipment will increase productivity and reduce expenses. That will be more than enough to cover the total cost of the loan. In the meantime, there are plenty of resources on hand to resolve any unanticipated events that the company experiences.

Providing Funding for a Growth Phase

The small business is firmly established and generating a respectable amount of collected revenue each month. While that’s great, there isn’t a lot left after all the bills are paid. That means money to expand the venture or to allocate to product development is not there.

Choosing to secure a small business loan is the solution. The loan proceeds can be banked in an interest bearing account, and used when and as necessary to fund the growth project. That makes it possible to manage those additional expenses without relying on the cash flow. Assuming there is enough after taking care of the usual and standard expenses to cover the loan payments, the company will remain financially secure.

Taking Advantage of an Upswing in the Market

There’s reason to believe that the demand for the company’s products is about to increase significantly. That means the business owner needs to be able to meet that demand without risking the loss of current customers. Using a small business loan to secure more raw materials and pay employees to work overtime is a great way to build up the inventory and be ready for that upswing. In many cases, the increased business volume will more than cover the loan costs, and may even allow the owner to settle the debt ahead of time.

Steering the Course During a Slow Season

Not all types of businesses operate in markets where demand is more or less consistent throughout the year. If the small business is part of an industry that tends to thrive during a couple of quarters each year and then lags the rest of the time, there must be a way to get through those slow seasons. A small business loan will make it easier to ensure there is always money on hand to keep the operation on an even keel.

Using the loan proceeds, the business owner can take care of all essential expenses without having to deal with late fees and penalties. Once the slow season is over and business is booming again, it’s possible to retire the remainder of the loan early. That saves more money by reducing the amount of interest paid over the life of the loan.

Take the time to consider what a small business loan would do for your operation today. Think in terms of a specific goal and identify exactly how the money would be used. Having a properly designed plan of action ensures that you will get the greatest benefit from the use of this financial resource.

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Pro’s & Cons of a Remote Sales Team

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Many companies decentralize their salesforce by regions, enabling reps to better serve clients. This is advantageous because buyer preferences can vary across different regions. But sometimes companies must hire more virtual or remote sales teams in locations where they don’t have sales offices. If you are thinking about creating a remote sales team for your business or company, here are some advantages and disadvantages to such a strategy.

Pros

Covering Distant Markets
One advantage of hiring remote sales reps is so you can cover cities and towns in which you currently don’t sell. These markets may have many viable characteristics, including a conglomeration of businesses similar to your client base and less competition. Having at least one remote representative in the area can solve this issue.

Attract Higher Qualified Reps
Many talented and highly qualified sales reps often prefer working in remote environments, especially if they have a high degree of self-discipline. The remote positions allow them to focus more on sales instead of meetings, enabling them to earn higher commissions and bonuses.

Lower Overhead
With a remote sales team, you don’t have to lease office space, buy furniture, purchase hordes of office supplies or pay for the utilities of a sales office, according to business consultant company Openview Labs. Remote sales reps usually work from home and can deduct a percentage of their mortgage or rent for tax purposes. They can also deduct common business expenses, including furniture and office supplies, which saves your company money. For any expenses you do incur developing a remote sales team, including consulting, hiring and training, consider getting a loan. Companies like Business Credit and Capital can fund your expansion and even offer you a line of credit if you’re qualified.

Increased Employee Satisfaction
Although many professionals may have difficulty motivating themselves working from home, sales reps often prefer more autonomy. And if this is something they desire, it can dramatically increase their job satisfaction level. Working from home is also considered a perk that many seasoned sales reps desire when seeking sales opportunities.

More Efficient
Hiring remote sales reps can not only increase their productivity level and sales, it frees you up as a sales manager or business owner. You spend less time meeting sales reps and more time creating strategies to increase revenue. And even when you do have meetings, you can use video teleconferencing services, which are much less expensive than spending money on flights for reps to fly to your home office.

Cons

Less Control
You lose a certain degree of control over sales reps when they work from remote venues, but this is less of a problem if you hire the qualified reps who’ve worked in similar environments. Asking reps to call you often and requesting frequent status reports can also alleviate some of the negatives associated with control issues.

Lack of Camaraderie
Openview explains how sales reps have fewer chances to share war stories or develop bonds with one another in remote settings. And since many traditional business leaders believe that strong bonds among employees create more unity in corporate settings, they are less apt to adopt the remote concept for their sales team.

More Security Problems
Since your IT department must connect remote sales reps with company software and email services, you typically have more security problems in a remote environment. Home-based computers are more prone to hacking and data leakage, according to Kelly Services.

Transitions and Promotions
It’s often difficult to promote remote sales team members to corporate-based jobs, especially if they like working in remote settings. That means you will have to hire reps from outside the organization to fill in-house jobs. And for those reps who do transfer to corporate offices, they may not transition well and then you’ve wasted money with relocation and other moving related expenses.

If you’re looking to create a remote sales team, you must weigh the pros and cons and do what’s best for your company. Another option is to hire several remote sales reps on an experimental basis and see how it works out. You can then expand your remote sales team as large as you see fit.

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Are You Asking Potential Clients The Right Questions?

 

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If you aren’t converting a good portion of your prospects into clients, then the problem might be the questions you ask. Are you asking potential clients the right questions? To find out, compare the questions you normally ask for the types of questions in this article. We’ve included four types to ask your potential clients and one to ask yourself.

Who Questions

The first questions to ask relate to who you’re speaking to. Who does this prospect work for? Where do they live? What are his or her needs? Knowing the answers to these questions will help you determine which product or service might suit them best. You’ll be able to tailor your sales pitch to them and get better results.

Why Questions

Another type of question to ask is why. Why is your prospect looking to buy now, rather than six months ago or six months from now? Why are they speaking with you instead of looking at an off-the-shelf solution? Getting your prospect to explain their reasons will do two things. The first thing it will do is convince you that they’re a good fit. The second thing it will do is convince them that you’re a good fit. This is because in order to convince you of the why, they have to convince themselves too.

How Questions

The next set of questions to ask relate to how they envision their final result. What do they hope to gain and how will your product or service accomplish it? Are there any particular quirks you need to accommodate, such as a tight deadline? You’ll want to know how the prospect envisions the end result so you can align your sales pitch or highlighted product with their expectations.

Budget Questions

In order to remain in the black, you have to ensure that you’re only spending time with high quality prospects who are able to buy. These prospects have the budget to afford your product or service and value what you have to offer. Clients who may otherwise be a perfect fit should be referred to trusted vendors. Clients that value your service will pay higher rates and be more satisfied with your work. Maintaining Business Capital and Credit. And if you need help maintaining business capital while you’re in between clients, then you should consider credit to carry you through known slow months.

The Question You Need to Ask Yourself

Finally, one question that small business owners get wrong is the one they fail to ask themselves. That question is: who is your ideal client? Who do you best service with your business? How old is he or she? What industry does he or she work in? What is his or her primary motivator? How much money can he or she spend? Knowing who your ideal customer is will help you avoid trying to market to everyone, a practice which doesn’t work. When you narrow in on your ideal customer, you can more easily determine who is and isn’t worth your sales time. You can also spend your advertising and marketing money more economically and tailor your message so that it resonates with the prospect and makes the sale.

Converting potential clients into clients isn’t hard if you focus on the right prospects and if you ask the right questions. You won’t convert everyone, but you can convert a greater percentage by using these questions.

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How to Take Control of Your Business’ Budget

Taking full control of your business’ budget is paramount to survival and consistent growth. Without a tight grip on the reins, your business’ growth can get bogged down by improper businessresource allocation. Here are seven things you should do if you are serious about taking full control of your business’ budget.

Find a Process that Works For You

Every business owner will have a slightly different way of managing expenses and revenues. However, there are common denominators or parameters that can be seen in every budgeting plan. For instance, a majority of businesses lease office or workspace and thus must pay mortgage per month. To run the office, they must have utilities including electricity and water, which is again part of the expenses incurred per month. Finding a specific budgeting approach that works best for your business is essential to effectively address market challenges and grow the brand.

Cover Everything

A good budgeting plan must cover everything, even unforeseeable expenses that are yet to be encountered by the business. You cannot take full control of your business’ cash flow if you don’t know exactly where it is going dollar for dollar. Start simple by listing the most obvious expenses like utility bills, payroll, raw materials, manufacturing, and marketing. Divide each section and allocate funds according to its relative importance to your business.

Update Your Budgeting Plan

It should be a monthly routine, but checking and tweaking the plan every quarter of the year will also suffice for business owners who have a lot on their plate. If your budgeting plan is going to work for you, it must account for any and every change the business undergoes every day, whether it’s an expansion of the workplace, increase in payroll or changes in marketing channels. Update your budgeting plan with the management team and look at how the initial parameters are holding up with the current market conditions and company performance.

Keep Your Team in the Loop

Always keep employees informed about your current budget and budget forecasts. This information empowers them to take ownership of the tasks and processes that are vital to your company’s continuity and growth. Knowing how well your business is doing financially enables your employees to watch their project costs and are less likely to make any impromptu decisions that could further worsen the financial crisis the business is in.

Use a Spreadsheet to Simplify Budget

A spreadsheet makes it easier to control your finances by providing a visual perspective of the different things you are keeping track of. Instead of just having a list of items and numbers on a piece of paper or at the back of your head, a spreadsheet with matching charts and graphs can detail just how big a portion of your capital is being allocated to raw materials or just how small the revenues are being produced by a particular marketing channel.

Always Look to Cut Costs

A business that continues to cut costs but increase revenues is a succeeding one. Even if you’ve trimmed enough fat on your budget plan, you should not be complacent with your achievements and instead, look to continue cutting costs. Focus particularly on items that can be managed at greater scale. In addition, consider waiting to make purchases until the beginning of the next billing cycle, or capitalize on payment terms and conditions given by suppliers and creditors.

Secure a Business Loan the Right Way

It’s not always easy borrowing money from large banks or private lenders, especially if your business lacks creditworthiness and collateral. Companies, like Business Credit & Capital, are providing a simpler process to acquiring the financing you need to fulfill inventory orders and leverage marketing strategies. Essentially, a business cash advance from Business Credit & Capital will involve purchasing a portion of your anticipated revenues and forward the money to you upfront. Unlike other financing options, a business cash advance enables you to use the money without any limitations, giving you the ability to direct funding where you deem it most vital and not where the bank sees fit.

These seven budgeting tactics will help you take better control of your operating capital without having to pay thousands of dollars per year to third-party resources for consultation and expertise.