For start-up businesses there are many things to consider when beginning the setup of your enterprise; from the quality of your product and/or service that you are offering, to finding experienced staff, and marketing your brand. The success of a start-up business is reliant upon many different areas but none more so than your finances.
When setting up a new business it is important that financially you get off on the right foot.
Finding the right accountants or outsourcing to a business finance specialist is often the step many start-up business owners take. The knowledge and expertise of a finance expert can ensure that all financial aspects are well-managed and taken care off.
If you do however wish to manage your business finances in-house, then it is important that you are aware of exactly what requires your attention.
Below are the vital areas of your business that should never be neglected…
Whatever your business, it is a legal requirement that you record all financial details of your business.
Well kept books should provide a clear insight into the financial footprint of a business. From every big deal to the smallest travel receipt handed in by an employee, it is a legal requirement that everything is recorded. Bookkeeping is often a time-consuming task that is better outsourced to a specialist.
Cash Flow Management
Having enough funds to cover all outgoing expenses is crucial which is where good cash flow management comes in.
From regularly monitoring incoming and outgoing expenditure to ensuring monthly business rent fees and payroll can be covered; cash flow management is essential to your businesses survival.
Having an appropriate amount of funds and even a cash cushion to prevent debt is also a good, preventative measure. With regular cash flow management you can stay on top of all finances, deal with overspending and even determine where savings can be made.
However many members of staff you employ, you have a legal obligation to ensure that you are at the very least paying minimum wage. Setting up payroll, ensuring tax contributions are made and that student loan fees are taken is essential.
It is also important to ensure that HMRC are provided with accurate information. Payroll is very complex and often additional factors including bonuses, sick pay and maternity leave can easily leave you confused. Consider investing in the right software or seeking advice from a payroll specialist to avoid any errors.
Invoicing your customers may seem simple enough but it is all too easy to fall behind, particularly with slower moving customers.
From making your terms and conditions clear, to setting a payment date (often within 30 days of receipt of the invoice) to offering an incentive to encourage earlier payments; it is important to do as much as possible to keep on top of invoicing. Loosing track of invoices could affect your business and leave you struggling financially.
Get a system in place or consider the support of an invoicing specialist who will keep on top of it all; dealing with invoices in the right way could make all the difference to your business.
Good management of all of the above will ensure your business runs smoothly and is less likely to face any financial disasters. Have you ensured that the financial side of your business is running smoothly?
The turnaround specialist offers a new set of eyes, skills and understanding of troubled situations to independently evaluate a company’s circumstances. The turnaround specialist very quickly must face a series of questions that existing management may never have asked, such as: What is the purpose of this business? Should it be saved? If so, why? Are those reasons valid?
The turnaround specialist must gather information, evaluate it for accuracy and analyze it quickly so that those initial questions can be addressed openly and honestly. That process generally focuses upon the following issues:
* Is the business viable?
* Is there a core business?
* Are there sufficient sources of cash to fuel a recovery?
* Is existing management capable of leading company?
The specialist should discuss those questions openly with his client, and if it is determined the answer to any of the above questions is “No,” the parameters of the engagement should be reexamined. Should a specialist still be engaged? What kind of plan is needed to otherwise minimize the losses and to maximize the value of the business for the benefit of his client.
The process of recovery undertaken by the turnaround specialist involves several stages.
Fact-finding. The turnaround specialist must learn as much as possible as quickly as possible so that he can assess the present circumstances of the company.
Analysis of the facts. The turnaround specialist should prepare an assessment of the current state of the company.
Preparation of a business plan outlining possible courses of action. Depending upon the engagement and who his client is, the specialist will seek client input to determine which of alternative courses of action should be undertaken.
Implementation of the business plan. Once the course of action has been chosen, the specialist should be involved to put the plan in place whether as interim manager or as a consultant to management. This is the time a specialist begins to build a team both inside the company and from outside resources.
Monitor the business plan. The specialist should keep vigil over the plan, analyzing variances to determine their causes and the validity of the underlying assumptions.
Stabilization and transition. Assuming liquidation is not a cornerstone of the business plan, a specialist should remain involved in an engagement until stabilization is achieved and to assist a business in transition of management if necessary.
Turnaround specialists immediately focus on cash flow since it is often a cash shortage that causes troubled businesses to seek help. The specialist’s first goal is to stabilize cash flow and stop the hemorrhage. The specialist performs a quick analysis of the company’s sales and profit centers and of its asset utilization.
In many cases, these factors indicate that the business may have lost focus of its core. To remedy cash shortage, turnaround specialists generally analyze which assets are available to generate a quick infusion of cash and which operations could be terminated thereby stopping the cash outflow. These are difficult decisions since they intrinsically involve down-sizing the company and eliminating some jobs. On the other hand, it has the effect of saving the good parts of the company – and many jobs.
After the specialist has been engaged and a business plan designed, the specialist plays many roles. Since many troubled businesses often lose much of their credibility with lenders, trade suppliers, employees, customers, shareholders, and the local community at large, retaining a turnaround specialist is often the first sign to outsiders that the company is taking positive steps toward both recovery and rebuilding damaged relationships. The turnaround specialist usually serves as a liaison or intermediary with these outside constituencies to calm troubled waters and to present bad news as a preamble to a plan for recovery.
Because management’s credibility is often strained, the specialist actively assists in the preparation of a viable business plan and advocates its approval and adoption by the various constituency groups whose cooperation is necessary for implementation. The turnaround specialist is experienced in negotiating both with lenders and with trade suppliers in the midst of a crisis. The turnaround manager brings their personal integrity, their own credibility, and their track record to the table in contrast to that offered by existing management, which finds itself in a downturn.
The turnaround specialist often directs communication for the troubled company with outsiders and company employees. The job of the turnaround specialist is to determine what is in the best interests of the business objectively, regardless of any other agendas. The turnaround specialist must take into account the objectives of the assignment and approach difficult decisions without the weight of historical expectations on his back.
The effective turnaround specialist is a teacher and knows that it is critical to success that a capable management team with acute awareness of its goals must be left behind. If management is deficient, the turnaround specialist has the very delicate task of communicating that message, identifying appropriate roles for existing managers and facilitating a transition
Even with the energy sector being the Golden Child of Wall Street, energy project financing has been elusive. There are presently over a trillion dollars in energy financing requests laying dormant all throughout the United States. It’s estimated though, that the number of energy projects needing funding presently in the U.S. alone borders on the quadrillion mark. So why does energy financing get such little attention? Simply stated, it is because funding each project means a lot of risky zeros for the funder.
Think about it. If you funded commercial loans and you had a choice between a $2 million loan on a mall with lots of equity, or a $500 million energy project that has habitually exhausted its equity for years, which loan would you make in a questionable market?
Exactly; the project financing request will be treated as a redheaded step child-unless you deal with financial experts who specialize in the energy project funding arena. The energy sector has long behaved as if it would never run out of credit, funds, or customers. As such, in today’s pinch market, this type of financing has taken a back seat to “safe bets.”
The difference between a big banker at “Big Banks Are Us” and an energy project specialist is the specialist isn’t concerned about the risk of approving project funding. A knowledgeable project financing specialist mitigates such risks with their expertise. The specialist knows specifically where to look in an energy project for gaffs, gaps, and misappropriation of funding requests. They know in fact, MORE energy projects must progress in order to keep up with the market demands. They know a winning proposal when they see one, and they also know when a project is being underfunded. Even a highly trained bank executive simply cannot be a specialist in all aspects of their funding requests. While the word billion has begun to lose its shock value in the world of energy project financing, it’s critical to conduct your business with a specialist who hasn’t lost their edge in the energy sector.
Because of expansions of natural gas, nuclear power, shale, solar power, electricity, crude oil, steam-power, and coal, the need for energy project financing has grown into one of the most demanded, yet underfunded industries worldwide. In many parts of the world, medical research receives three times as much funding as energy financing request even though the world of modern medicine is largely at the mercy of energy.
Our modern society consumes massive amounts of fuel and energy. Even third world countries would be debilitated without the sporadic energy resources they access at present. Developed countries around the world have essentially built their infrastructures around the use of energy. And how could they possibly avoid it? Unfortunately, going to traditional sources for energy funding has proven to be a daunting task. Even though the Obama administration and a Democrat-controlled Congress have passed stimulus bills with massive amounts of funding for new, alternative energy sources, very little of this money is being thrown at the development and continuation of existing energy resources which we are already dependent upon. The answer to this dilemma is alternative energy project financing options which take into consideration future profits of a tangible energy asset which produces income rather than a debt. Sounds enticing, right? A true energy project financing specialist will know exactly how to accomplish this task. So do yourself a favor. Engage an energy project funding specialist for your successful financing.
Bob Dougherty, CFS® has been an accomplished advisor in the finance industry since 1994. With specializations skills in the monetization of hard assets, Bob is highly adept at structuring finance solutions for energy based projects. Bob has been an asset as an expert consultant in the field of international finance on political, military, and civic scales. To access Bob’s expertise you may contact him at
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