Tag: blog

Applying For A Small Business Loan

On July 23, 2019

Achieving your vision for your small business requires substantial preparation and funds. Capital is highly needed in establishing the small business as well as financing its initial stages of operation before the business realizes financial stability. It is, therefore, highly recommendable to consider applying for a small business loan. The process of applying for the loan involves five simple steps, which, once correctly followed, will highly likely increase your chances of success.

Evaluating Your Needs

The first thing to do before applying for a small business loan is to assess your small business’ needs, mainly focusing on why you need to obtain the loan. Most small business loan requirements fall into four main categories. These include the need to finance the startup process of your business, catering for day-to-day expenses within the business, achieving and realizing business growth, and having a financial safety cushion for your business.

Determining The Right Type of Loan

The second step involves deciding the correct type of loan that your business needs. Depending on the need you want to fulfill in your business, there are different types of business loans and sources of capital for small businesses available in the market. Among those include, loans offered by the Small Business Administration, business line of credit, invoice financing, personal loans, merchant cash advance, and micro-loans.

Choosing The Right Small Business Lender

The third step in the process involves selecting a suitable small business lender. The market is awash with multiple small business lenders, including banks, micro-lending institutions, online lenders, and government institutions. When choosing the right small business lender, you should emphasize on determining the minimum requirements and the annual percentage rate of the loan offered.

Establish If You Are Qualified

After choosing the right lender for your small business, you should then move to determine whether you are eligible for a loan with the institution of your choice. Among the crucial factors that determine your eligibility for a small business loan include your credit score, your business’s financial profile or history, and the business’s internal asset-base.

Gathering The Documents And Applying

The last step involves obtaining the necessary documents that are required for your business to qualify for the loan. Among the critical documents that different lending institutions need include business and personal tax return certificates, bank statements, financial statements, and legal documents.

The Difference Between Index Funds and ETFs

By Tom Leydiker

On July 9, 2019

In Blog, Finance, personal

When it comes to investing, there are a number of terms to learn in order to be conversant and knowledgeable as an investor. There are margin calls, options and mutual funds. A couple of terms that are important to learn when investing are index funds and ETFs.

What Are Index Funds?

Index funds are a form of mutual fund. A mutual fund is a basket of stocks that is actively managed to attempt to maximize investor returns through effective diversification. An index fund is a mutual fund that is more passively managed, and it will attempt to match a given index. The index could be the S&P 500, the Russell 2000 or another index altogether. There are also bond index funds available.

Index funds will not generally beat the market, but they will usually come close to meeting the market’s overall return. Index funds will tend to have less turnover than an actively managed fund. This will mean that index funds have a relatively high level of tax efficiency. Index funds will also usually pay out dividends as the underlying companies that make up the index pay dividends. As a form of mutual funds, index funds will only trade at the end of the trading day. Therefore, an individual investor will have little ability to maximize her ability to take advantage of little price fluctuations.

What Are ETFs?

Exchange traded funds, more commonly known as ETFs are also baskets of stocks. A brokerage might have a mutual fund and an ETF with very similar goals and holdings. Investors can trade ETFs more easily than regular mutual funds. Unlike mutual funds that trade only at the end of the trading day, ETFs can trade like stocks. As long as the market is open, an investor can buy or sell an ETF. This allows investors to take advantage of fluctuations in the price more easily. Like mutual funds, ETFs will also pay periodic dividend to investors.

Another difference between index funds and ETFs is the amount needed to invest. Mutual funds usually require a larger initial investment. Most will require an investment of $1,000 or $3,000 as the cost of being able to invest. ETFs allow smaller investors to get started more quickly. It’s only necessary to purchase a single share of an ETF to begin investing. This is another layer of flexibility that’s related to investing in ETFs.

Investing For New College Graduates

By Tom Leydiker

On June 7, 2019

In Blog, Debt, Entrepreneurship, Finance

Recent college grads are known for the massive amounts of debt they’ve taken on. They go to school for four or more years, and they hopefully have a degree to go with their nice monthly bill. Investing is usually one of the last things on the minds of recent college grads. Yet, because of the ability of money to grow into massive amounts the longer it’s invested, immediately after college is the best time to start investing. Here are a couple of great ways new college graduates can get started investing.

Smartphone Apps

It may seem like a smartphone app would be a strange place to start investing, but nothing could be further from the truth. Recent apps like Stash and Acorns allow investors to automatically save small amounts of money without much in the way of forethought. Stash allows for regular or periodic investments taken from a bank account. Both Stash and Acorns allow would-be investors to round up purchases and save the spare change in an investment account. Stash has a broader array of investments available while Acorns focuses on just a few funds that are intended to meet certain goals based upon a new grad’s risk profile.

Workplace Retirement Plans

Another great option that is open to many new grads who have jobs is a workplace retirement plan. These are great options because they offer tax-deferred savings. This means that new grads will pay less in taxes, which also means they will keep more of their money to pay off student loan debt while saving. Another great benefit of saving in a work-based retirement plan like a 401(k) is the matching funds that employers will frequently offer. Through workplace 401(k) matching funds, it’s possible to supercharge returns with no additional effort. Many employers will offer a dollar-for-dollar match up to a certain percentage of an employee’s pay. A common percentage is 6 percent. With a dollar-for-dollar match, an employee would effectively be savings 12 percent of his or her salary each year while only cutting their pay by 6 percent.

Even with student loan debt, it is not impossible to save for retirement. Through apps like Stash or Acorns and workplace retirement plans that allow for automatic savings, new grads can begin building their nest eggs. The perfect time to get started is the present.

Franchising Your Business

By Tom Leydiker

On January 4, 2019

In Blog, Entrepreneurship, Finance

Once a business has a certain process that’s working and it is producing a consistent profit, an owner may want to think about replicating the process by franchising the business and opening it up to new owners. Here are five factors that a company will want to look at when deciding if they should create a franchise:

Is The Concept Viable?

A good franchise concept will have two qualities. It will offer something that is familiar, but it will come with a unique twist. An excellent example of this is a pizza company that only offers organic ingredients and delivers their product via hybrid-electric vehicles. The concept must appeal to prospective franchisees and consumers. Also, the business should be able to be replicated so that funding more of them would create an increase in profits and economies of scale.

Hire A Lawyer

When a business owner is going through the franchising process, it’s important to hire an attorney who can give expert advice on the transition. They’ll be able to help with the forms that need to be completed such as a Franchise Disclosure Document. An attorney will also be able to assist with pricing, intellectual property protection and the creation of a franchise agreement.

Will Cloning Work?

To really be sure that a business should be franchised, it’s usually best to create one or more clones and see if they are successful in other areas. If the cloned units are a success, it probably makes sense to move ahead with plans to franchise the business.

Be Selective

There are many individuals who may have the capital to pay the price that allows them to get involved with a franchise. However, it’s important for the owner of the franchise to be selective when choosing franchisees. This ensures that the right people are selected so that both the franchise owner and franchisees are successful. The owner of a franchise should always consider new franchisees as ambassadors of their brand. They must be a good fit. An interview process should be used to help determine the best candidates.

Location Location Location

One of the most important factors for the success of a franchise is where it is located. It’s best if the first couple of locations are kept close to the original business. However, they shouldn’t be so close that they’ll hurt the sales of the first location. By having the first franchise operations close, it will be easier to manage logistics.

Attracting The Right Set Of Investors

By Tom Leydiker

On November 26, 2018

In Blog, Finance

When a person is able to find a good investor for their startup, it will help them get off to a good start. Knowing how to pitch and attract investors will ensure that they find the right match. Here are five tips that will help an individual give a strong pitch to an investor:

Short And SweetInn

Often, the best ideas are the simple ones. When a person is creating their pitch, it should be short and sweet. Of course, their products or services need to be innovative as well.

It’s best to stay away from technical details when a first pitch is given. Typically, an investor will have experience in the space and quickly understand the significance of the proposition being made. It’s also best to keep minor details about the company private before an investor decides to sign on.

Telling A Story

Storytelling is one of the best ways to pitch to an investor. People love stories, and they’ve been successfully used for thousands of years to pique people’s interest and get them emotionally involved.

The key is to make a story enjoyable and not too convoluted. A person can use the story to help make them more likable, which can help build trust.

Utilize Philanthropy

In many cases, investors have been involved in some type of entrepreneurial role in their business life, and typically, entrepreneurs are more likely to donate to charities.

It feels great when a person is charitable, and it makes them look good. By aligning a business plan with some type of charity during the initial stages of a business, it sets up the possibility of networking with investors who view giving to charity as a positive thing to do.

Use Confidence And Practice

When a person acts confident when they’re giving a pitch, it’s going to help an investor see them as someone who is sure of themselves. This helps create trust and confidence in an investor.

It will probably take time for a beginner to find the correct balance of aggressiveness. They definitely don’t want to come off as someone who is desperate.

Sealing The Final Deal
Once a person has given their pitch and become established as a trustworthy and accessible individual, it may help if they can prove that it works. If an investor sees that their service or product is actually viable, it should help the investor make a decision.

Saving For The Future

By Tom Leydiker

On September 17, 2018

In Blog, Debt, Finance

It is important to save money at any point in your life. Life can be unpredictable, and everyone should prepare for the unexpected to some degree. Establishing a kind of financial “cushion” is a great way to help yourself from financial downfall in the unpredictable future. Saving money for future plans is essential for retirement, vacation, school, and anything else you can think of. This article will give you a few you can prepare and start saving for your future.

Establish Goals

The very first step is to establish your goals. Take a look at your current financial situation and set a realistic goal for yourself that you will be able to reach. Break down the goal into smaller digestible pieces that you can work on every day. Setting an overarching goal for yourself can be intimidating, but once it is broken down into smaller daily tasks that you can complete, the overall goal does not seem so daunting.

Spontaneity

Individuals who set financial goals for themselves find it difficult or unbearable to bind themselves to strict budgets. One aspect of your budget should be used just for spontaneous events that may come up during the week. Considering that last minute plans happen, it is a great idea to have a set amount of money that you can spend either each day or each week to help you stay on your budget. You will be less likely to falter on your budget if you have already budgeting frivolous spending!

Save First

The very first thing you should do when you get paid is to put money away towards your goal. You can decide whether you should manually put away the fixed amount or have it automatically taken out of your paycheck, so you never see the money in the first place. Whichever method you decide to choose, paying yourself first is the most important key to planning for your financial future.

Consider putting one-time payments such as tax returns, bonuses, or raises into your savings account. If you can function well with your current cash flow, then you have the opportunity to save even more with the added cash flow that comes from raises, bonuses, and tax returns.

If you are comfortable with the idea of investing your money, it is a great way to potentially earn more money for your financial goal and future. As with any investing, there is a varying amount of risk involved. Look into ways that you can intelligently invest your money to ensure the best returns!

Tips To Avoid Financial Woes

By Tom Leydiker

On March 20, 2018

In Blog, Debt, Entrepreneurship, Finance, personal

At some point in your life, you may fall under hard financial times. This happens to many people and does not mean the end of the world for your bank account or credit score. There are ways to come back from financial hardship and be prepared to avoid them in the future. This article will talk about some common financial woes and how to avoid them.

Create a Budget

Most people think they have a good understanding of where their money goes. Taking a closer look at your monthly spending may surprise you. Where your money is going may not match up to what you thought you were spending. A good way to avoid financial hardships and even dig yourself out of one is to set a budget for yourself. Take your monthly analysis of your spending and formulate a budget that will keep you in the green each month. Make sure your budget is tangible. Try not to guess at what you spend on certain items, be precise and you will be more likely to stick to your budget.

Impulse Buying

A common mistake among consumers is to purchase something on impulse. If you come across an item and immediately think “I need to have this!” Take a step back and evaluate the reasoning behind the purchase. Is this going to get me to my financial goals? Is this item necessary for me to buy? These questions will help control your impulses and ultimately keep you connected with your budget. If after a month you are still yearning for that item then save up enough money to get it for yourself.

Alternatives To Spending

Instead of going out to a fancy bar or restaurant, aim for a day packed with homemade sandwiches and a hike near your local trail. Any alternative you can find to spending money on miscellaneous things like a bar or restaurant should be pursued to help you save money and maybe even find your new favorite activity.

Medical Insurance

Nothing can help you dampen the blow of a medical emergency like medical insurance can. Without insurance, you are at risk of paying high fees for medical procedures that can plunge you into financial hardship for a long time. Medical emergencies are unpredictable, and it is better to be insured no matter your financial situation to avoid destroying your financial credibility for good.

What To Look For In A Financial Advisor

By Tom Leydiker

On March 2, 2018

In Blog, Entrepreneurship, Finance, personal

Finding a financial advisor is an important task in anyone’s life. Your financial advisor will walk you through your financial goals and then formulate a plan to help you reach them. Before you make a decision on who your financial advisor will be, consider the points listed in this article to ensure you are making the right choice.

Experience and Education

When looking for a financial advisor consider what kind of qualifications they have. Look for a Certified Financial Planner (CFP) before making your decision. Conduct an online search for your potential financial advisor and refer to any and all articles and websites about them. Follow up on previous or current clients to gather more information about their practices. It is one thing to state that a financial advisor has the proper qualifications but if they cannot correctly apply good methods than it is not worth the investment.

Pay Structure

The way a financial advisor sets up their payment structure speaks to their intentions in being your financial advisor. There are a few ways advisors can set up their payment structure. One way is commission based. Commission based advisors could be biased about what kind of investments you should consider because they are ultimately getting a cut of that investment. This could lead to investments that may not be working towards your financial goals. Another payment structure is fee-based. A fee-based advisor could give you advice that will benefit them in the long-run causing you to potentially stray away from your financial goals. Consider a financial advisor who charges by the hour. An hourly payment structure does not allow the advisor to be biased towards any financial decisions.

Contact

Make sure you understand how often you and your financial advisor will be meeting. Some advisors will have an initial meeting then only have scheduled meetings once a year from then on. If you are new to having a financial advisor, recommend that you and your advisor meet quarterly or more often than that if needed.

Outcome

You want to find a financial advisor who will point you in the right direction to achieve your goals. Eventually, you should be armed with enough knowledge to take over the reigns and conduct your own financial plan. Avoid getting stuck with an advisor who suggests that you need to stay with them to reach your goals. That kind of financial advisor may not have your best interests at heart.