Business Cash Advance & Business Financing Alternatives 

Preparing Your Business Plan for Financing

Many facts and figures go into your business plan, but key areas are examined first by lenders or investors before they provide your business financing. If these key areas pass muster, then your secondary information is important. Making sure your business plan covers these key areas well and presenting it in the way lenders are accustomed to receiving the information is critical to your overall success in securing financing. US Business Finance Corp has helped many small businesses obtain funding – both with commercial loans and business cash advances.

Show me the money! At the outset clearly delineate the amount of the financing requested, your past financial history and how projected sales will assure both the continued health of the company and the ability to absorb the additional loan payments.  If you choose and alternative financing, such as a company cash advance, the repayment is built in to the process. Your repayment comes as a percentage of future Visa and MasterCard sales.

Your financial statements are the most important item in your business plan. Financial lenders have seen the financial statements of many companies and are able to tell (with sometimes unnerving accuracy) where your company is strong and where it could use some experienced help. Your cash flow statement can reflect both your successful marketing and your products popularity as well as your company’s thrift.

Among the documentation necessary, the following are the usual benchmarking financial data;

  • Three years of tax returns prepared by your accountant;
  • Financial statements, both a Balance Sheet and Profit & Loss Statement;
  • Collateral itemized with value;
  • Accounts receivable – list of 30, 60, 90 days invoices and delinquent (beneficial – many customers, not dependent for most of your income on one or two major accounts);
  • Accounts payable – all bills owed by 30, 60, 90 days and delinquent (benefit – several suppliers so you have alternatives if one raises their prices or ceases to carry your items);
  • Articles of Incorporation and Bylaws – to prove that there are no restrictions on your ability to sign contracts or if it is necessary to get Board or shareholder approval for loans above a preset amount.

On the other hand, cash advances do not require all the documentation of a loan, only proof of a certain level of income from Visa and MasterCard sales.

The second area, is the management team. This is covered in the Executive Summary and then later in the plan in more detail. Make sure you put all the important data in the Summary – don’t save your best for the detailed reporting. A management team that has experience and success in other fields is a key asset. Lenders know that the business world is a mix of planning, unexpected challenges and recovery. Seasoned management teams have experience addressing core problems and building companies in the face of everyday business challenges.

Also list your outside “team”: your attorney, accountant, insurance agent and any consultants you are using.

These two areas – your financial history and your management line up – are the primary areas that are your major litmus test. Pass these two tests and then the lender will examine your marketing plan in more detail.

The marketing plan must be realistic. Dilbert cartoons parody the worst of marketing, the “the reality of the market is what I say it is” marketing plan. Your marketing presentation needs to deal with a specific market demographics or a potential market that you have researched and proven viable. The over-used “plan to capture X% of a trillion dollar industry” outlook does not persuade seasoned lenders. Also, give a realistic assessment of your competition. Except of the occasional new “disruptive technology” business, new business don’t operate in the luxury of a competitive vacuum.

Last, but not least, explain the business’s and your personal exit strategy. A business’s exit strategy impacts day to day business decisions. The lender wants to know: are you building for a sale three years down the road? Building to create long-term jobs in the community? Putting together a business system that can later be franchised? Assembling a management team that can carry on if you pursue other interests? Often it is hard to envision the exit strategy if you are still trying to create the business, but by defining an exit strategy you help shape decisions and assist management in preparing for different potential business opportunities.

In the end, be your biggest critic. Read through your business plan as a potential investor. Are there areas that are fuzzy? Is the growth potential clear and realistic? Are there timeline benchmarking points prepared to make sure your plan is on target? Do you realistically present the best and worst-case scenarios.

Whether you are searching for business financing for buying a business, starting your own small business, or have plans for expansion or renovation of your current business, call on US Business Finance Corp. Our team of financing experts can assist you in the preparing of your business plan presentation to improve your ability in securing operating capital.

Turning A Company Weakness Into A Marketing Strength

The nature of business is, similar to life, change and adaptation to that change. As markets, competition and business opportunities change, companies need to not depend on their past marketing strengths, but adapt to the markets changes. An overlooked way to bolster your marketing and insure strong sales in the future (and stay one step ahead of the competition) is to examine the weaknesses in your sales offerings.

In preparing your business plan, you probably produced a Strengths, Weaknesses, Opportunities and Threat (SWOT) analysis. Your SWOT analysis should not remain in the same state as it was originally created, but be revisited and revised all the time. Normally changes to the analysis comes from marketing’s research into new business opportunities, from which advertisement and training needed to pursue the opportunity is created. A company culture that accepts change stands the best chance of not getting caught standing still when the market shifts.

A second strategy is to check opportunities that are closer to home – market analysis of your competition. This exploration can shed light on your current sales’ weaknesses, which are usually able to be quickly mitigated by improving customer service or fine tuning your product offering to where the market is moving.

In studying your competition, one simple way to conduct an analysis is to review with your trustworthy employees what possible moves your competition could make that could erode your customer base. Then you have several people keeping tabs on the competition. Follow through by taking pro-active steps to mitigate the effect of your competition’s moves. The flip side of this coin is to have a brainstorming session with your company to think of things your competition may be worrying that you will do. Is it a marketing opportunity? Put manpower and operating capital resources into making it happen.

Outside financing consultants can aid your SWOT assessment by bringing the third party perspective to the situation, a perspective that is not steeped in the traditional company viewpoint. Of course, your customers are also a valuable source of market information – make sure your request, either face-to-face or questionnaire is done in such a manner to produce the most honest feedback. Outside consultation may have a steep short-term price, but a simple change of perspective may continue to pay-off for years to come.

Creating internal contests that rewards employees for new marketing ideas not only harnesses the creativity at hand, but also gets employees thinking more like entrepreneurs instead of just hired help.

In the end, adapting your company’s advertising and market positioning to the shifts in market tastes and desires is like any detective story – deciphering the changes to make sure you understand all the clues the market provides.

Small Business Entrepreneurs Learn From Franchise Model

As an small business entrepreneur, accelerate your success by modeling certain aspects of your business after the franchise business model. US Business Finance Corp has helped many small businesses succeed and in our experience whether a business is a franchise or an independent small business enterprise is not the determinant for success. More important to success are the business owner’s experience, vision and goals for the company and approach to doing business. By adapting several aspects of a franchise model to the independent approach to business, owner’s may fast-track their success and avoid several small business challenges.

  1. A measure of franchises is “Transferability of knowledge”. Any company with employees has to establish a training program to transfer corporate knowledge quickly and accurately. Training gives your employees the basic tools to meet most of the situations they will encounter in their jobs. Training documentation creates a readily available FAQ that allows employees to double check items without always “calling on the boss”.

    Companies can adapt training programs already available into their own companies. Visa and MasterCard merchant card service providers like US Business Finance Corp provide employee training programs to quickly acclimate your workers to knowing how to handle credit card sales, credit card declines, protect your company from fraud and safeguard your merchant profile. US Business Finance Corp recognizes the importance of problem-free credit card transactions and our team helps train our clients’ employees as well as provides training material.

  2. Franchises also system their standard operating procedures (SOPs). Time and trial-and-error expenses are saved when employees are trained in the correct way to do things. With a system in place, owner’s time is freed up from having to deal with every situation because employees can quickly apply knowledge of the system to most challenges. Of course, part of the system is when all else fails call the boss!
  3. Create the prototype. Each franchise started out as an independent enterprise that proved the concept of  the business model. Even if you are not going to franchise, by seeing your business as a prototype, you constantly utilize customer and employee feedback to improve the training, offering and systems for maximum profit and customer service.
  4. Committed to relationships. Franchisors must build long-term beneficial relationships with owners and managers of their franchises to ensure a consistent level of customer service, brand reinforcement and products. In a similar manner, by focusing on strong relationships with your employees, customer service, morale, and product knowledge stay consistent as well as minimizing employee turnover.

Small business entrepreneurs adapting these four areas to their independent business ventures will find it easier to concentrate on the areas of their business that demands their talents. A well-trained work force is better able to accept delegated duties and responsibilities when they know how to do it, how they will be measured on their performance and how their actions contribute to the overall success of the business. Contact US Business Finance and improve your merchant credit card processing service and training program – quit paying for mistakes.

What Is Your Business Exit Plan?

“What is your exit plan, your exit strategy?” The question from the bank’s loan officer caught one entrepreneur by surprise. He suddenly realized that his business plan assumed that he was immortal and business would always continue as normal. The next day, an investor asked him about exit strategy, however, he had a different reason for asking.

The banker was looking for stability in order to make a commercial loan. The investor was looking for when he would realize his profit by selling his shares. US Business Finance Corp helps entrepreneurs prepare for the banker or investor who is interested in the stability of your company – what are your exigency plans if the “key man” in sales or development moves on or is incapacitated and the investor who is interested in if he can realize a return on his investment if your company is sold.

New business owners caught up in the business planning and building phase find it hard to imagine an exit strategy, much less a need for one. Several exit strategies need to be planned: the exit of the owners or one of the partners and the exit of a key employee. Planning ahead allows steps to be taken that buffers the shock and helps companies transition through that phase when an exit happen unexpectedly.

Entrepreneurs love starting and building companies. Often their exit strategy is built towards creating a saleable asset that another company or investor would want to purchase. The return on the business sale then provides the capital for the next business venture.

For business owners who plan for long-term ownership, the exit strategy would more reflect purchasing “key man” insurance, delegating responsibilities to trusted employees, writing owner “buy-out” clauses into the corporation’s or partnership’s bylaws, and possibly creating a Employee Stock Ownership Plan (ESOP).

In reviewing how to adapt to the departure of key employees, the most successful strategy has been to systematize the business and provide training for newer employees. The biggest problem to filling empty shoes is when employees are allowed to keep company information in private files or in their heads. In systematizing a job, having openness of information to at least the owner or manager is of primary importance. If there is a sense of chaos in one area of your business, look for a way to eliminate it through accountability and responsibility of information storage and sharing. Job security should come through meeting performance goals, not in holding companies hostage by withholding crucial company sales or infrastructure information.

When you do move toward selling, make sure you utilize outside experts to assess a fair market value for your company and consider using a professional business broker to select potential buyers. Your attorney can prepare a confidentiality agreement for use with anyone reviewing your operations and financial records, as well as prepare and sales agreement.

Making Sense of Your 401(k) Options

More employees plan to augment their social security retirement income and take greater control of their personal money matters with their retirement investment strategy. Reviewing the benefits of the various 401(k) and IRA  programs and maximize their potential investment returns by starting their investments earlier in life.

Many companies offer a 401(k) retirement program that allows employees to place a portion of their pre-tax income into an investment plan from which they can start withdrawing funds six months before their 60th birthday. The major benefit of a 401(k) is that employers put a matching amount funds into your 401(k). The 401(k) has a greater allowance for savings ($15,000 a year versus the Roth’s $4000).

The Roth 401(k) is a retirement fund that is a hybrid of a traditional 401(k) and a Roth IRA. Like a 401(k), contributions are made with payroll deductions and withdrawals can begin at age 59 and a half. Similar to Roth IRAs, the payroll deductions are part of your taxable income and retirement withdrawals are tax and penalty free (if the account was set up before you turned 54 and a half). Differing from the traditional 401(k), the Roth 401(k) does not receive employer contributions.

The Roth 401(k) can be rolled over into a Roth IRA upon your retirement and no penalties or taxes are assessed. In a similar manner, a traditional 401(k) can be rolled into a traditional IRA, but taxes would need to be paid on it if rolling into a Roth IRA.

Why plan for when you pay your taxes on your current income? Many employees have families and mortgages and enjoy their attendant deductions. By retirement age, your mortgage may be paid off and your children are no longer dependents, which would mean that your tax bracket may be higher. A Roth 401(k) allows you to take advantage of paying your taxes while you are in the lower tax rate. The longer you are invested in a Roth 401(k), the greater the benefit that will be derived from the tax bracket shift.

The overall benefit of the two programs is that you can have your cake and eat it too. If your budget allows, you can invest a portion of your income in a 401(k) fund to take advantage of matching funds and also put a portion of your income into the Roth retirement investment account to take advantage of your current tax bracket.

2008 Economic Stimulus Act Benefit – Faster Business Equipment Write-off

How can your small business benefit from the Congress’s 2008 Economic Stimulus Package? US Business Finance has several ways to help small businesses find financing to take advantage of this one time offer from the government. For a fast review or the benefits, the SBA website covers what faster depreciation relief business owner’s can expect from the new stimulus package. For companies whose fiscal year starts in July 2008, these advantages of buying business equipment run through June 2009.

To find out the specifics, check the SBA website for their eight minute audio video slide show that reviews the various deductions and provisions. The SBA site also has a Word document executive summary to download that includes three links to IRS publications that give further guidance, details and perceived benefits of the Act.

In a nutshell, the Act allows you a much higher amount of equipment you can expense (up to $250,000) and the ability to write of 50% of your purchase in the first year (2008) and then apply your regular first year depreciation to the other 50% your business equipment’s purchase price.

Office equipment, restaurant equipment, machinery for manufacturing businesses are all covered by the Stimulus Act. Since the Act includes various exceptions and additional requirements (it was crafted in Washington) reviewing the benefits of the Act for your particular business with your tax advisor is advisable.

If you are looking to acquire business equipment for you next expansion or to improve productivity, consider US Business Finance Corp’s the alternative financing resources. We have helped many small businesses purchase their business equipment either by the traditional routes or by using future credit card sales to pay for equipment today with a business cash advance. While we help businesses like yours to get the cash you need to succeed in less than two weeks, the government is giving you more advantageous terms in which to write off your equipment purchases this year.