Many business owners will at some point consider using their home as a means of financing their business. Whilst this may initially seem like a cost effective strategy, is it really the best way to fund your business?
The big question is, should you use personal assets to fund a business? Would you put your house on the line for a bet or a listed company's shares? NO. Then why would you do it for the business? Business assets should be funded by separate business loans.
There are many finance options available on the market. This can be confusing at the best of times, but even more so when you are a small business owner. How do you maintain good cash flow in your business and earn enough income to support your family all whilst ensuring the safety of your personal assets?
Invoice Finance, also known as Invoice Factoring or Invoice Discounting, is the quickest and safest way to increase the funds available to your business and improve your cash flow on an ongoing basis.
Do commission based structures damage the quality of your customer service? It seems they certainly may.
A report in the Australian Financial Review, quoting Stephen Sedgwick, who recently undertook a review of payment and incentive systems within banking, found that staff members were begin pressured to reach certain sales targets. The meant they were obliged to offer products to their customers just to reach the target, rather than to meet the customer need.
Back in July we wrote an article called “Late Payers in the Australian Market.” It was about big businesses delaying their payments to smaller business, effectively damaging their cash flow and making it very difficult to remain financially viable.
Many small businesses we speak to are concerned about the unstable state of the economy and the late debtor payment issues that have been recently making headlines. There has never been a more nerve-wracking, yet more exciting, time to grow your business. However, cash flow seems to be one of the hindrances to this growth.
Big businesses using their market dominance to crowd out smaller businesses by delaying the payment of their invoices is something we touched upon in an earlier blog post. 30 day terms are being extended to 60 days and even 90 days in some circumstances, and this can be tough for the majority of small businesses who feel the brunt of the unfair terms.
If you are an Australian business owner using personal finances to fund your business, know that you are not alone. In fact, two-thirds of all small business holders use private funds to help them keep their business afloat.