small business finance - Tom Leydiker

tom leydiker 4 changes to make for a better financial year blog

We are constantly setting new goals for ourselves. While these goals differ immensely from person-to-person, we create these goals for ourselves in order to better certain areas of our lives. The most common goals are primarily health-focused – losing a certain amount of weight, eating a more balanced diet, exercising at least three times every week. But one area that should be at the forefront of more people’s attention is a focus on financial success.

Finances also happen to be the area that most individuals don’t know how to traverse. The answer to your financial success does not solely rely in risk-taking and huge investments. There are a few strategies that you should implement first in order to build a strong foundation to grow upon as you continue to expand your financial understanding.

You have probably heard these strategies before, but they are important because they work. Your financial success is contingent upon your personal habits and behaviors, so making these changes this year will help you to lay out a successful financial future:

Create A Budget (Or Optimize Your Current One)

Having a budget is essentially having an organizational tool that helps you track your finances over the course of the year – and they are not as daunting to create as many people make them out to be. But a successful budget is not one that remains static. It will require frequent changes that are dependent upon your income, the changes in monetary amounts that need to be dedicated to certain monthly expenses, and to account for any financial emergencies. Be as detailed as possible because your budget is what will help you control your finances. It provides you with physical evidence of where you can afford to cut back in order to save more money.

Put Money Into A 401(k) Or IRA Plan

One of the worst things that you can do for your financial future is to put off placing money into a retirement savings account. Do not wait until you are older to begin saving for life after employment. The sooner you start saving, the more time you have to accrue a more substantial amount of money. If your workplace offers 401(k) plans to their employees, make it a goal to contribute the maximum amount possible every year – or at least as much as you can afford to in order to still live comfortably. If you don’t have access to a 401(k) plan, look into getting an IRA plan set up instead.

Learn How To Invest

It’s inspiring to read the success stories of individuals who took a risk with investing to have it pay off beyond their wildest imagination. But risky investments may not be a good strategy for a beginning investor. Save these types of investments once you have more experience and more stable funds. When you first start out, be consistent and talk with a professional to ensure that you are making decisions that are both safe and wise.

tom leydiker ways to finance a growing business

One of the most challenging areas of a growing business is finding the right funding. If your business is doing well, you will need to acquire the funds that will help you continue to expand. Or, there are times when businesses just need extra capital to help them get through a financial slump.

How can you finance your business?

There are a variety of ways to seek out money that you can put towards building your business. Before you pursue one of these options, but sure to sit down and dedicate time to figuring out what your goals are, calculating the necessary amount you will need, and, then, compare these options to find the one that would make the most sense for your specific needs.

Ask family members or friends.

Ideally, the best way to borrow money would be to seek out extra funds from family members or friends who have the financial flexibility to temporarily part with money with no affect on their personal stability. While you will eventually need to pay them back, it eliminates the weighted stress of having to follow a stricter timeline. Family members and friends will be more lenient about how quickly they are reimbursed, however, you could risk destroying personal relationships if you were to completely lose the money.

Apply for a bank loan.

This is the option that most businesses pursue, typically because it seems like the most obvious one. Depending on the type of financing you need, banks offer a wider variety of funding options. However, the approval process of acquiring a bank loan has become very strict, which means that a lot of smaller businesses won’t pass beyond the approval process.

Consider equity funding.

Obtaining money through equity funding means that you are putting forward a portion of your business in return for investment. Venture capital is one of the most common types of equity funding. This is a great way to raise capital for your growing business, but it also requires that you have planned out exactly how you are going to make a return on investment within a specified period of time.

Acquiring a Small Business Administration (SBA) loan.

These loans are available to any small business, but, to prevent everyone from applying, your business must first meet a list of qualifications. These qualifications often eliminate many small businesses from the running at the onset. If you do happen to meet the qualifications, you will still need to go through another financial institution because the SBA does not actually provide loans directly to businesses. The standards of this other institution may be even higher than the other financing options available to you.