3 Ways to Avoid Small Business Stress

A recent report done by Bank of America found that running a small business is almost three times more stressful than raising kids and over twice as stressful as maintaining a healthy relationship.  A little stress is inevitable when being in business for yourself because you are the one who has to make all of the decisions. Here are a few tips to help you keep that stress down to a level that you can deal with.

1.    Be positive. There are countless factors of owning a small business that you have no control over.  Running headlong into the great unknown is scary and when you have a lot on the line it can seem like failure is inevitable.  No matter how bleak you can imagine things becoming it is far more productive to remain optimistic about the future of your business.  Small business psychology has shown that optimism will not only reduce your level of stress but it will also allow you to have the faith you need to make wise business plans and improve sales.

2.       Don’t be afraid to ask for help.  27 percent of respondents to the Bank of American survey stated that they did not consider themselves to be financially savvy.  Feeling overwhelmed with the finances of your small businesses will raise you level of stress.  Finding financial advisors that you can trust and depend on can ease a portion of that anxiety.

3.    Become a friend to technology.  In many ways being in business for oneself has gotten a lot more stressful than it was in our grandparents’ day.  Luckily there are many technological advances today to help balance out some of that added stress.  Good accounting software can help you keep track of your accounts receivable and create invoices to help you avoid late or missing payments due to your company.  Also, online bill payments and arrangements for funds to be automatically taken out of your accounts can help you stay on top of the money you owe to creditors and utility companies with little effort on your part. 

What are the practical tips can you share to small business owners regarding financial literacy?

Four Steps to Financial Literacy for Your Small Business

Managing a small business is a big responsibility and it’s one that needs to be taken seriously.  One bad month financially can be a slippery slope and before you know it you will be closing your doors forever.  With proper planning and precautionary actions you will be prepared to deal with whatever life has to throw at your small business.  Here is a list of four financial precautions to take to ensure that your small business has a long, healthy life.

1.       Make your credit work for you.  Credit scores are everything in this day and age.  Your credit history follows you everywhere and has a big effect on your businesses success.  By paying off or making payments towards your existing lines of credit, you will keep your credit history looking solid.  A positive credit report guarantees that you are able to secure a loan and will qualify your business for lower interest rates.

2.       Monitor your spending.  Create for your business a monthly budget.  Balancing your revenue with your costs will protect you from overspending.  Keeping an accurate record of your cash flow will help you predict patterns in your finances.  You can look at your previous year’s budgets to know what to expect in the months to come.

3.       Stay on top of your accounts receivables.  Small businesses depend on their accounts receivable as income.  The money generated from these accounts determines the amount of cash flow you have to invest back into your business.  Good accounting software can help you to prepare invoices and keep track of payments.

4.       Don’t be caught off guard by Uncle Sam.  Tax time can be stressful for any new business.  Keeping accurate records of your revenue, expenses and capital through the year will help you avoid this stress.  There are many tax breaks available for small businesses.  Keeping track of important receipts and expenditures can help you take advantage of these and save your business lots of money.

Keep your Vendors Happy, Keep your Customers Happy

Having a good relationship with your suppliers is vital to the success of your business.  Suppliers and vendors keep your shelves stocked with the essentials to keep your business running.  Whether you need products to turn around and sell to your customers, paper and office supplies for your day to day operations or even just pop in the vending machine, you rely on your venders and suppliers everyday.  It’s important to have suppliers that you can trust equally and important to let them know that they can rely on you to fulfill your end of the arrangement.

A good relationship with your supplier often means that they will go above and beyond the call of duty for you.  If you need an item in limited supply and another company also needs the item, you want to make sure that the supplier chooses you.  Being respectful of your supplier’s time and of the role they provide for your company goes along way towards establishing such a relationship.  You also need to be mindful of the fact that your supplier is running a business also and they need to be paid on time.

If a bad run of luck and overwhelming debt has prevented you from paying your supplier or vendor in a timely fashion, corporate debt restructuring can help you to get back on the right track with them before it’s too late. A debt settlement is just the thing to reduce the amount you spend on old debt and increase the amount of capital you have each month to, among other things, pay back your suppliers.

As businesspeople themselves, most suppliers understand that everyone goes through a rough patch from time to time.  Chances are if you have worked previously to establish a good relationship with them they will give you the benefit of the doubt for a while.  It’s important, though, not to take advantage of that trust and get your finances back on track as soon as possible so that you can pay your vendors off in a timely manner and keep your business running smoothly.

What are the advantages of keeping good relations with your suppliers?

The Four Main Causes of Business Debt Problems

We all know that corporate debt restructuring is the way to go when you get in over your head with business debt.  Before you embark on your entrepreneurial endeavors you should take the time to learn the four main causes of business debt problems so that you can avoid the most familiar pitfalls affecting companies today.

1.       Getting ahead of yourself.  Dreams and goals are very important aspects of having your own business but its important to be realistic about what your new company can achieve in the first few months or few years that it’s up and running.  This means limiting your spending to only the most necessary expenses.  It also means not getting involved in too many projects at one time and taking the time to nurture each project individually.

2.       Micromanaging.  Your new business is your baby and any mother will tell you it’s hard to trust other people with your baby.  No matter how tempting it is to try and do everything yourself, you will be better served to find others that you can delegate tasks to.  Attempting to turn your business into a one man show will only result in you being stressed out and tired when it’s time to perform a task that only you can do and that could put your business at risk.

3.       Being too lenient with your accounts receivable.  It can be hard to be a first time bill collector.  Especially when you’re just starting out and you want to make a good impression on the clients you have but failing to collect on the money owed to you can put your business into a debt cycle that is hard to get out of once you get into it.

4.       Paying your bills late.  Creditors can be your friends when you are in times of need but just as easily they can turn on you when the bills aren’t paid on time.  Keeping in good standing with your creditors will ensure that if you ever need an additional extension of credit it will be there for you.