Gaining the attention of an angel investor takes plenty of wit and charisma but getting them to sign the dotted line to fund your business takes a little more effort and preparedness. Knowing what will garner their focus and impress them to the fullest can make securing the funding you need to start your business easier and, of course, less stressful. Start with the following to get the nod of that angel investor you are looking to partner with.
Impressive Revenue Stats
Knowing the numbers is imperative to swaying an angel investor your way. You need to come to the table prepared to win them over not only with your knowledge but also with your impressive financials. You should have a revenue stream ready to go and know your overhead costs as well as your product costs and markup.
Industry Knowledge and Experience
Being a newbie to a market can be a challenge in itself, but if you have a strong background that shows you know what you are doing in this arena, you may have a leg up. Angel investors will take notice of your potential and see that your expertise is valuable to the market you are looking to serve and be more willing to fund your business startup as a result.
Sound Business Plan
It goes without saying that you should have a business plan for your startup ready to go. Angel investors want to know how you plan to operate once you open your doors and a business plan can help provide the details to many of their questions. Give your business plan some time and effort as it can be the defining factor for an angel investor saying ‘yes’ to funding your business start-up.
Niche Products and Services
If your product serves a niche in the market that is not currently being serviced, the interest of your angel investor will certainly be peaked by what you have to offer. Finding where your business fits into the marketplace can help separate you from the pack and make your product stand out from other “me too” offerings. Angel investors want in on these opportunities, and you are sure to impress them with you savvy and entrepreneurial spirit.
Finding the right angel investor doesn’t have to be a challenge as Funded.com provides a bevy of resources and helpful advice right at your fingertips. Visit Funded.com to access our network of angel investors or for assistance with the development of your business plan.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
When starting a new business, you face hundreds of new challenges – many of which you have already assessed and many that you couldn’t have imagined. Once you have made up your mind to start your business, you need to set some rules. While there are many, today’s topic is mixing personal banking with business finances. A great number of new and small business owners make the mistake of mixing their finances with business finances. Here are the reasons why you should not do this when you start your business.
Reasons Why You Should Not Mix Personal Banking and Business
To Make Loans Easier
If you want to make it easier for you to obtain loans, you would want to keep your bank account separate from your business account. The first rule one has to learn as a business owner is “business has its own identity.” Keeping that in mind, you have to open a separate account for your business. With time, your business will create its credit history making it much easier for you to obtain loans in future.
To Know Business Expenses
When you have your personal banking and business account all mixed up, you don’t know which expenses are which. If you need to buy a new wristwatch for yourself, the money comes out of that account. If you have to buy new furniture for your business, the money still comes out of the same account. As the time passes, it will become nearly impossible for you to sift and sort through your expenses and business expenses. To know your business’ profit, you need to know its expenses.
To Make Tax Filing Easy
Tax filing can become a nightmare for you with your personal and business income and expenses are intertwined. By mixing the two accounts, you are making the job difficult for yourself. As for the sole owners of a small business, it is best to put some percentage of your income in a separate account, so you don’t have to pay the taxes from your pocket at the end of the year.
To Keep It Professional
So, you want your business to turn into a brand. You have had your visiting cards, letterheads, brochures, etc. printed. You want people to know the name of your business. Having done that, how does it feel when your customers and clients have to write a check in your name and your business’? People might think that you are not serious about your business and that you might change your mind at any time, which is a lost opportunity for long-term B2B relations.
To Keep It Transparent
When the money from your earnings and business go on the same account, you will not distinguish between both when it comes to spending. At times, you might be making up for business losses from your pocket, and at other times, you will be buying your stuff from business money.
Bottom Line
For the reasons above and many others, it is in your best interest that you open a separate account for your business and keep your savings personal. You could also close doors for future incoming investments due to this basic non-professional move.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
As an entrepreneur with a unique business idea, your most difficult task is to make others believe in your idea as much as you do. Your knowledge of your business and the passion for its concept reflects in how you pitch your startup. While learning comes from failures, your target should always be to ace your pitch the first time you deliver it. The idea of pitching your business to the experienced investors can be quite daunting. You are standing in front of the people who can look right through you and your words. Any mistakes or misinformation can ruin the opportunity of a successful investment.
If you have watched a few episodes of the Shark Tank, you would know how brutal investors can be with their probing and reprimanding. While their harsh words can be quite painful, the more disappointing part is when you are not able to get the investment you want.
Regardless of all the internal and external forces, favoring and non-favoring odds, it is your perfect pitch that can win the investors over. What you need to focus on is how you can craft the perfect pitch that has the thinnest chances of being turned down by potential investors. Here are the tips that will help.
7 Tips to Craft and Deliver the Most Successful Business Startup Pitch
1) Keep Your Pitch Short
Do whatever it takes—hire professionals or spend hundreds of hours brainstorming—but come up with a shortened, succinct and most effective version of your pitch. Don’t make your investors yawn. Split your pitch into three to four different phases and transition through them smoothly. For example, split your pitch into four parts that could look like this:
Tell the story how it started.
Explain clearly what your product/service is.
Give out numbers i.e. revenue, sales, profits, losses etc.
State the size of the investment you are looking for and explain what the purpose for which you need the said amount.
So, you could give 2 and half minutes to every part and complete your pitch in 10 minutes. Increase the time for the section which you believe needs more attention.
2) Be VERY Clear about Your Product/Service
One of the biggest mistakes that startup teams make is not being able to explain the idea they are selling. It can often happen when you divide your product/service into multiple sections with each section solving a different problem. If you are not able to explain your product/service clearly, it is an indication of one of the two problems or both: 1) you have not worked on your pitch and 2) you don’t know your service/products very well yourself. As soon as the investors feel lost during your pitch, consider the opportunity lost too.
3) Know Your Target Market and Product’s Uniqueness
Many entrepreneurs’ pitches have turned into nightmares because of this particular point. It is like an interviewer asking you, “Why should we hire YOU?” There might be many other products similar to yours in the market without you knowing about them. What you have to know is what makes yours unique/different.
You must also know the market you are targeting with your product. Keep in mind that investors are often not interested in products that only target a niche market. Take the example of selling Christmas trees that only sell in the Christmas season—indicates a niche market, a limited product.
4) Know Your Numbers
If you have not done your homework on your numbers, you have no chance of getting an investor interested in your product. It’s sad but true. In fact, some investors are only interested in numbers as they believe it’s the numbers that tell the real story, not the business owner him/herself. Know your revenues, sales, losses, incomes, etc. Make sure you know your profits and revenues regarding months, quarters and years. If they ask you how much profit you made in last three months, you must come up with an answer immediately.
5) Be Clear on How You Intend to Spend the Money
This section is where the investors will gauge how trustworthy you are and how good you are as a person in the leading position for your business. Of course, if you want money for your business you must also know where you are going to spend it. A few things that investors are trying to find out by asking “how you are going to spend the money” are as under:
You aren’t asking for money just because you haven’t been able to take a paycheck from your business.
You are not going to use the money to pay for debts and old investments.
You are not going to use the investment money for a business process that will not contribute to business’ growth and expansion.
If your demand for money ends up being for any of the reasons mentioned above, you are likely to be rejected for your investment.
6) Show Your Passion
Barbara Corcoran, successful businesswoman and investor, says that she looks at the enthusiasm and passion of an entrepreneur for their business. She believes that you cannot fake passion. Whether you are pitching through an online platform or live in front of the investors, your passion can get them interested in your business even if it is not something they have done before.
7) Choose the Right Platform
In today’s digital world, you can gather funds from investors through an online platform, which is the most popular and successful way for entrepreneurs to gather funds for their start-ups. However, when it comes to choosing the platform, you must pick one that has a reliable network of investors, significant traffic, reputable online image and great exposure for startups. One that fulfills all these requirements and more is Funded. Funded is currently one of the best and most reliable platforms for startups, especially when it comes to angel investors.
Final Word
As a startup, the presence and preparation of your competitors might be intimidating at first, but that’s what you need to change about yourself. Your competitors might have reached to a bigger network of investors, more inventory and better technologies to support their mission, but what can make the difference is your passion and confidence in your startup pitch.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
As a business startup, you have no doubt developed a business plan that outlines your need for funding to get your company off the ground. While you may have a clear purpose and objective, angel investors are looking for specific details that let them know that your business start-up has what it takes to make it in the marketplace.
With a seed investor seeing hundreds of business plan proposals each year, you need to make sure yours hits the high notes and resonates with them. This means that you have to hone in on what is important to them and help them see why they need to put their funding dollars into your business. Use these tips to enhance your business plan and garner the attention of an angel investor for your business start-up.
Industry Experience
Angel investors are savvy when it comes to industry experience, and they want to see that you have what it takes to make it in the marketplace. They want entrepreneurs that have intimate knowledge of the industry they are looking to break into and have even worked in a similar business for a time or two. This can help your business plan sing as you are able to relate your experience to what your business should and shouldn’t do to succeed.
Market Need
Using your business plan to show that there is a definite market need for your product or service can help your angel investor see the potential of your business start-up. They will easily understand the consumer problem you are looking to solve and see how your offerings fit the bill. Be detailed in your references and be sure to show how the market will respond to the availability of your product or service.
Competitor Knowledge
Knowing your competitors is key to understanding where you will stand out and separate yourself from the pack. Remember that your private investor may not be as fluent in your competitors as you are and you need to break it down in your business plan for them to grasp as fully as you. This can prove to be beneficial in gaining the funding your need to grow your business.
Business Traction
Showing what your business startup has done so far to generate revenues is a boon for potential angel investors to see. This lets them know you are on the right track and that your company has traction. Be sure to detail all your revenue streams as well as any upcoming deals you have secured to ensure they see the big picture of your business’ potential.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
It can be easy to lose sight of the very reasons why you wanted to open your business startup. You can get wrapped up in the day-to-day operations, leaving little time to focus on what makes your business startup standout in the market. Having a strategies in place that allows you to keep you motivated can ensure your business stays on a path of success.
Fall In Love With Your Business
Any business that you invest your heart in soul in should be the great love of your life. You need to nurture it and watch it grow. Having a real passion for what you are doing and the products and services you sell can make your business startup a real labor of love. You should have a real hunger that drives you to do well. Making your business startup idea one that you can stand behind and love to eternity is the first step in achieving success.
If it seems that you are losing that connection with your company and not really feeling the love, take a step back and allow yourself to remember how it all started. This can spark your emotions for your business and allow you to fall back in love with what you are doing. Your passion for your business is often times enough to get you through the challenging times.
Surround Yourself With Good People
From your employees to your professional network, the people that you surround yourself with can have a strong influence on your business startup. These very people can give you new ideas and help educate you on your business’ operations.
Having positive people to lift you up can be a strong motivator and allow you to have someone to bounce thoughts off of when you feel uncertain about a decision. Use your network to gain valuable information and learn from your peers on what mistakes to avoid. They can prove to be a big part of helping you run your business and ensuring it is successful in its endeavors.
Don’t forget your employees; they can be a big part of keeping your focused on your business startup on a daily basis. Good employees will drive your customer service and in turn your revenue. When your employees believe in your business and the vision you have set for it, it makes it that much more important that you deliver now and into the future.
Create A Marketing Strategy
Having a marketing strategy in place to promote your business is necessary to help achieve strong revenues. You should have prepped and planned a strategy that you want to adhere to market your business startup to your customers. It doesn’t have to be a large portion of your budget, but it should include some effort on your part.
Think about where your customers go for their information. Be visible to them and make sure you use every opportunity that is available to you to market your business with both new and existing customers. Try social media, check into local advertising, hold and an event, and use what is available to you to reach your customers and introduce your business’ products and services to the masses.
If you stay aggressive with your marketing plan, you are sure to garner the attention of your current customer base as well as a new group of potential clients. This can bring in more revenue and keep your business startup on a path of success.
Get To Know Your Customers
It is your responsibility as a business startup owner to know everything there is to know about your customers. You should have a strong idea of who they are, what their likes are, and where they are located. When you truly understand your customers, the more effectively you can serve them with your products and services.
While your attention may be turned toward gaining new customers, don’t lose sight of your current clients. They are the bread and butter of your business, and you want to make sure you are not replacing existing customers with new customers at a losing pace. Show your loyal customers how much you appreciate their business. Without them, your business will only see marginal success, and you want to make sure to grow your business startup rather than be stagnate in its approach.
Take Time For You
It may be difficult to imagine, but you need time away from your business startup. You may think that you can’t take time away or that your momentum will crumple without you, but taking a vacation every now and then is one of the best things you can do for your company. When you step away for a moment, you allow yourself the opportunity to recharge and refresh. You’ll be able to see your business in a new light and be surging with motivation when you return.
You’ll be surprised at how much a vacation from your business startup can do for you. You’ll be filled with new ideas and solutions to problems that you previously thought unsolvable. Being able to see your business from a new angle can be just what you need to take it in a new direction, move it forward, or reach to new heights. Your business startup will appreciate the time you took, and you will be ready to take on new challenges with a fury as your drive will be restored and you will feel anew.
Plus, you have good people surrounding you that you can trust to steer the ship when you are away. Rely on your employees and allow them to do what you hired them to do. You’ll be pleasantly pleased with how quick they are to pick up the slack when you are away and the positive results you’ll see upon your return.
Having a strategy in place can ensure your business stays on track and experiences great success now and into the future. It is important to stay focused, think about your customers, and take a break when you need it. By embracing your business startup and trusting in yourself, your business will reach the success that you deserve and have always envisioned.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
You can review our featured partners to help your success with your business or project.
As a business startup, it is important to recognize the markets that are up and coming to help extend your business into these niches. It is also helpful for new startups looking for a business venture that will be successful and have some growth potential in the near future.
There are several markets that have emerged as of recently and should be paid attention to as they are trending and increasing in demand for products and services in these categories. Here are some of the top markets making headway in recent months that your business should pay attention to.
Green Living
It isn’t easy being green, but many people are turning toward the trend of living in an environmentally friendly way whether it be through green home design or products and services that help promote a reduced carbon footprint both in and out of the home. As a business startup looking for ways that you can promote environmentally friendly products and services into your business is sure to garner new customers that are hopping on the bandwagon to be a little greener in their everyday life.
From more energy efficient appliances to green kitchen design, there is a myriad of ways that your business startup can follow this trend and cultivate a new base of customers in the process. Plus, angel investors are savvy about what is trending in the market and will take notice if you are a little greener in your efforts or are able to capitalize on green living movement and its customer base.
Health And Wellness
Health and wellness is another niche market that is showing no signs of regress as consumers desire to look their best from head to toe continues to move forward. This market encapsulates everything from energy drinks to wrinkle creams and exercise equipment, that allow consumers to retain their youthful glow, fight disease and illness, and always have the best appearance.
Plus, an aging Baby Boomer generation is particularly focused on finding that fountain of youth you may be able to offer with your business startup. With Baby Boomers controlling, much of the spending that consumers do today and being an underutilized category, targeting your products and services directly to them can help you dip into a market that has a surplus of pocket money to spend on such luxury items.
Health and wellness products and services are also getting a nice boost from rising health care costs as more focus is placed on preventive health and staying healthy through personal care. This is only further complimented by an increase life expectancy for consumers and the need to look good no matter the cost.
Internet Technology Services
As fast as the internet grows, more services geared around helping internet users and website owners will continue to be needed. Products and services that center around the Internet will do well as there is a growing need for search engine optimization, website restructuring, and the ability to keep these sites safe through security protocols.
Add in the desire for online gaming as well as more educational opportunities that are online and you have a recipe for a high market demand that is focused on the internet and its usage. As a business startup, you need to think about how you can play toward this customer base with your products and services and tap into the revenue stream that this market offers new and emerging companies with internet technology service needs.
Mobile E-Commerce
Also, internet-focused is the ability to offer your products and services through mobile devices. Allowing your customers to buy directly from you using their cell phone, iPad or tablet can gain you in the revenue department as you are able to give them what they want immediately.
Having a website that doesn’t work with these devices can cost your customers that become fickle and choose your competitor over your business startup offering. Keep your eye on the ability to offer mobile sales to your consumers as this is the future of online sales as people use the most convenient platform possible to do their shopping now, during the holidays, and into the future.
Markets To Watch
While those are four markets that are heating up as of current, there are some new up and coming niches that are making advancements at an alarming rate. Keep your eye on virtual reality (VR) technologies as VR is becoming more of reality and the ability to integrate this technology into your business startup offering may give your business a leg up into the future.
Artificial intelligence (AI) is another area that is getting high praise as well as cloud-based systems that seem to be taking a hold in most every business opportunity. Internet of Things (IoT) is also trending in home products as consumers look to be connected to their dwelling no matter where they reside.
Security also gets a big push as more data breaches occur and consumers become increasingly concerned about fraud protection. Working your business startup into any of these market opportunities may be what you need to add to your revenue stream or reach a new base of customers with your products and services.
If you are looking to secure funding from an angel investor, keep these markets in mind as your private investor is no doubt tuned into these niche potentials as well. This may be the key factor you were missing in your business plan or a turning point for your business startup. In either instance, these are markets to pay attention to and get involved with as there will be plenty of spending on in these areas by consumers now and into the future.
No matter what market you are looking to enter with your business startup, be sure to evaluate the opportunity available to you and how it will affect your potential revenue stream. By always being watchful of new and up-and-coming markets can help you discover a new business avenue and allow to increase your revenue going forward.
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
You can review our featured partners to help your success with your business or project.
How to Get Angel Investors Interested: The idea is to have a sound business model that can be demonstrated by a business plan to have merit with goals of actions on how the model will get to point A to B with the funds provided by the angel investor or venture capital.
1: Have a concept, service, or style of doing business that is new or disruptive to the industry. This can be a service product or even an existing one, creating a unique advantage over the competition. If it is something more standard like investing in a flipping house, you can find how you may be unique to other house flippers. If you want an investor for a franchise, you can give work experience or know how to set you on top with location and research invested into the franchise, so it shows it can be a success from the start.
2: Invest in a Business Plan and Pitch Deck. Investors and banks like to see you have some plan to get from point A to B and an exit strategy for the investors’ money. Business Plans can organize your startup or exist by including major elements like Mission Statements, Distribution Channels, Corporate Structure, Marketing Research, and Financial Proformas. Pitch Decks are the visual aid that can paint a picture and a concept flow in a digital format.
3: Don’t price yourself out of the deal, but don’t give in too much. Any Angel Investors know it has to be a win-win. So, spend time wisely getting some model company financial comparisons and values on how the new capital will create a new deal on the business once everything is in place and moving.
4: Chose your platform for getting your pitch out there: You can go with crowdfunding, which can be very effective in some ways. You can raise many investors but also risk not meeting your capital requirements. You can choose a platform with only accredited investors and reach out with a posting and support. This can effectively see profiles available of investors in the industry and reach out directly or through the platform, depending on the forum. This can effectively raise capital from only one source and help provide valuable synergy and even external promotion of your new business.
Planning and patience are essential when pitching an Investor or Venture Capital. Even down markets and economies can be the best time to launch. You may get more interest and less competition as investors are looking to make equity stakes in the following future successes!
Who we are: Funded.com is a platform that is A+ BBB rated over 10+ years. Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
Engaging in conversation, especially when you have to start it, can be nerve-wracking. If you want to start talking to people around you or make some new friends, then you need to work on your conversational skills. Good thing you are reading this article. Here, we have highlighted and discussed vital tips that will help you better your conversation prowess.
Keep reading to find out more.
Become an Active Listener
Do you know that listening is different from hearing? Hearing is an inborn skill, but listening is one we consciously acquire over time. When you listen to someone speak, you hear what they say, you digest the information and try to understand before giving corresponding feedback.
So yes, if you want to engage in conversations more, you have to start practicing the skill of being an active listener consciously. Give full attention to the person talking.
Active listening is not just waiting for the other person to stop talking so we can immediately respond; it is more of being engaged with what they are saying, showing interest, clarifying, and asking questions.
This goes a long way to show that you genuinely care about what they are saying and about them.
Engage with Questions
If you find it hard to make small talk, have you tried the simple method of asking questions? It is no hidden truth that people love to talk about themselves as well as the things that interest them.
So, if you ever find yourself at a loss for what to say, ask questions, especially about conversation topics that you think or know would be of interest.
Whether it is someone sitting next to on an airplane or a stranger at the grocery store, you can always start a conversation by asking open-ended questions. For instance, for the airplane scenario, you could ask, have you tried this airline before? What did you think of it?
You’d be surprised at how the talk would flow from there. Social anxiety might be preventing the person you’re conversing with from becoming engaged. But if you start the conversation with non-personal open-ended questions, you’d eliminate that feeling of trying to force a conversation.
This method can make, even a stranger, feel that you know them, and you listen. If you are engaged, your fellow conversationalist will reciprocate, and you’d have excellent communication.
Confidence Speaks!
Have you ever been in a conversation where the other person mumbled or trailed off while speaking? This can be a major turnoff.
And the truth is this can only happen if you’re distracted or you’re overly worried about how other people would perceive you. Well, you’d have to come out of that shell. You can only form a connection with people when you show your true self rather than trying to conform to what you “think” their expectations are.
When you bring up a conversation topic, be confident in the fact that what you have to say is important and worthwhile. This would cause many people to be engaged in your line of conversation.
One of the reasons why so many fail at public speaking is because they lack vital confidence in what they’re saying. Try confidence and see how it boosts your conversations!
Gadgets
Gadgets, especially your phone, could be the main reason why you’ve been finding it hard to engage others in a conversation. And it’s so sad that in this social media age, so many of us are guilty of this.
Even when others engage us in conversation, we prefer to scroll through social media pages while we talk. And why we might want to justify this by saying we are multi-tasking; it just doesn’t work that way. There’s no way the person you’re conversing with won’t notice your unfocused attention. Being distracted by your phone could seriously harm your relationship.
Paraphrasing
Earlier on, when we talked about listening, you might have decided that one of the critical differences between hearing and listening is understanding. You want to understand what people say to you before replying, and you also want to make them feel that you heard and understood them.
One of the best ways to do this is reflective listening. This involves saying back what they said to you in a paraphrase. Though this might sound repetitive, it’s a superb mental trick that will help you have more engaging conversations.
Even more impressive, this will also prevent any form of miscommunication between you and the other person.
Stop Focusing on Yourself Alone
Sometimes we become so focused on ourselves, our problems, and all that is currently going on in our lives, that we completely forget to let go of all this stress while engaging with others. When you’re talking with others, you have to let go of these distractions, so the person feels important and worth your attention.
Body Language
The importance of paying attention to body language cannot be over-emphasized. So many researches have been conducted which shows that a vast majority, as much as 90%, of our communication is non-verbal. Your body language is as important as your verbal communication, sometimes even more so.
If you’re mindful of body language, you can quickly tell when someone is interested or uninterested in what you have to say. Having your body facing the other person will help. Direct eye contact is also great.
Bottomline
If you’ve been following, we’ve discussed eight different tips that will help boost your conversation skills, and help you start up talk with people quickly. However, don’t get discouraged if you still find it hard to start up conversations with people.
These things take patience and consistency, as long as you keep applying these tips to your daily lives, you’d soon become a conversation pro.
Access our network of Investors, get instantly matched with a Lender, or get a business plan by visiting us Funded.com
Whether you are running a mid-sized company or a startup, your company requires working capital with fast financing and flexibility. Factoring companies, in this regard, provide you this needed cash flow. A factoring company typically takes on waiting for burden for accounts to receive invoice payments. In return, it provides businesses and companies with timely advance cash.
There is no denying this receivable financing method is not only flexible but and also a smart financing alternative as compared to conventional business loans. Businesses need factoring when their account receivable invoices are essentially put up for sale at a discount to a factoring company. Banks, on the other hand, require businesses to go through a burdensome and long approval process to apply for a loan. Not only this, bank loan bears interest at the current market rate and often results in heavy business debt.
Reputable factoring companies, however, start your approval within twenty-four hours and can give you the funds on the same day. This duration can be of ten days, if you are a new client. Factoring doesn’t subject your business to any volatile interest rate. This means factoring financing is a great way to avoid debt on your business or company’s book.
Factoring financing is a long-term solution for business when it comes to enumerating its benefits. However, to make the most of this finance alternative, it’s important that you have sufficient knowledge of factoring. To clear the mist, here we list some potential benefits of factoring to help you understand why you should incorporate it in your business for steady cash flow.
Before plunging into the discussion of factoring benefits, let’s understand what factoring is.
What is Financial Factoring?
In financial terminology, Factoring refers to an invoice discounting and it is used as a financing tool for businesses, particularly for startups. When a business sells goods or services to its customers, it typically offers various payment terms instead of cash at sales time. Although there are a plethora of reasons why businesses practice this, developing a long-term relationship and increasing sales are the most important. In this kind of transaction, businesses usually get accounts receivable, which they hold on their books until customers clear the debt.
Businesses Can Benefit From Long-Term Factoring
If your business faces the following scenarios, invoice factoring can be really beneficial:
Volatile and unstable cash flow
Seasonal sales
Long duration sales cycle
Business needs funding to maintain production and substantial inventory
Delayed payments, such as corporate buyers and government agencies
How a Factoring Company Helps Business
A factoring company deals with invoice financing, particularly for startup and medium-sized businesses that want a non-bankable working capital solution. A factoring company, typically, purchases invoices for your business from creditworthy clients. Once you do it with crediting invoices, the company advances your business with 90 percent of invoice amount within 24 hours. The remaining balance is cleared when your client settles the payment in full.
You can submit your invoices directly after the product delivery or work completion. One of the interesting features of the factoring company is it keeps your revenues inflow and causes no collection hassles or delays.
Why Your Business Should Consider Factoring for Steady Cash Flow
Fast Way to Raise Money
As mentioned earlier, factoring is an alternative financing solution for businesses looking for swift working capital. A factoring deal does not take more than 24 hours to process and complete. If your business is in need to expand its operations quickly, factoring is your go-to option. Unlike banks and other financial solutions that take a whole lot of time in applying, processing and sanctioning, invoice factoring is a fast way to raise money. In general, businesses do not have that much time when it is about making investment or processing payments.
An Easy Way of Reliable Cash flow
There is no doubt that the availability of manageable and consistent cash flow is significant for operating a successful business. This means if your business doesn’t have a reliable cash flow, it may struggle to meet its daily financial requirements. Financing factoring, in this regard, is an effective and easy financing option that can help you improve cash flow. By using financial factoring and its steady cash flow, your business can meet its daily cash needs. You can even use that money to grow your startup into an established and successful company.
Growth and Expansion
Continuing from the last point, businesses in the growth and expansion phase require working capital. Whether your business needs to hire more employees or purchase new equipment, factoring can provide your growing business the working capital it needs. It may bring endless opportunities for your business to expand.
Maxed Out Your Business Lines of Credit
A state of maxed out credit line can bring your business cash flow to a halt. Even if your company has good credit, banks can limit the amount that you can legally obtain. This may be hazardous for your business growth. However, with invoice factoring, it is only your account receivable base size that can limit. For instance, you can obtain more working capital if your business makes new customers or signs new contracts.
A Way to Handle Slow-Paying Customers
Slow paying customers are something that businesses simply cannot avoid. Managing cash-flow becomes hard if customers take 40 to 90 days for paying the due amount. Even if you work with a Master Services Agreement (MSA), which is a payment term, there are customers who pay as per their convenience. Invoice factoring allows you to benefit from instant access to your due cash. All the due payments are received within 24 hours.
Final Thought
In a nutshell, financial factoring offers multiple benefits for companies in need to raise cash without any delays. Particularly, when a traditional bank loan is unattainable and your rapidly growing business needs to meet payroll, purchase material or cover its other operating outflows, factoring is undeniably one of the best ways you can solve all these problems.
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With the rapid growth in technologies, the ERP software market may cross $41.69 billion in profit by 2020. The statistics are enough to demonstrate the impact of this technology on businesses. This figure is undeniably impressive and reflects how important it is for companies in the future. Incorporating ERP software is one-way marketers can give their brand a competitive edge.
If your startup is in the initial phases and you are looking for a technology to help you manage business functions, ERP software is ideal, and if you don’t, this article is worth reading.
What is ERP?
ERP stands for Enterprise Resource Planning system. Many organizations use this software package to manage business activities, including project management, procurement, accounting, distribution operations, and manufacturing. It helps in day-to-day business functions while centralizing them within an integrated system.
The software is more useful when managing supply chain activities or keeping a track record of the moving parts of distribution and manufacturing. The use of ERP software is not confined to these business domains. It is utilized by many different domains that include nonprofit groups, construction, healthcare, and hospitality. Companies requiring inventory, staff, and customer management can rely on this advanced software.
In addition, ERP software stores data in a single database that allows different sections to collaborate by using the same information. ERP can organize and analyze data in the form of reports. In short, ERP software is great for bringing together the following functions into a single system:
Human resources
Financial management
Customer management
Business intelligence
Inventory
Supply chain functions
Here are some more reasons why your business needs ERP software.
Why Your Business Needs ERP Software
You might be wondering how ERP software is different from other software that performs similar functions. Although ERP software has the same goals of managing business functions, it has several unique features that make it extremely distinctive from other software.
Saves Money
You may find it a surprising fact, but ERP software is a good investment in terms of flexible pricing and saving money. For small companies, the initial price may seem heavy, but once they start using it, the software can save a lot of money.
This means ERP software can significantly increase ROI. It is merely because the system unifies multiple systems that businesses often use in fragments. From accounts payable to product development, the staff can access the necessary tools using a single centralized system. The software efficiently helps save time by keeping employees from hunting down information across different systems.
Improves Collaboration
This ERP feature generally varies as it depends upon the program business is using, but it does have a substantial impact on collaboration in one way or another. As mentioned earlier, ERP works with a unique centralized database that provides the business a source to work in collaboration. Not only does it reduces the risk of errors caused by incorrect data, but it also minimizes costs.
Moreover, ERP software reduces during projects as team members can access whatever data they need. The information doesn’t require merging within sources or systems because data is carefully collected, stored, and shared through one system. To put it simply, employees do not have to worry about the accuracy, completion, and security of data files.
Helps in Better Analytics
Businesses need ERP software if they want to improve data analytics and statistical reporting. In this regard, ERP software is ideal as its store’s data as input and makes for an unparalleled business intelligence tool. If vendors provide good functionality, ERP can be a great help in generating fast and accurate reports. The efficient software makes report compilation (that used to take days) a matter of minutes.
Besides this, the option of a customizable dashboard enables executives to see the reports when they are uploaded onto the system. The reports include information related to expense statements and custom KPIs that has essential insights for specific functions. Report access is also beneficial when a company has to make a quick and better decision.
Improves Productivity
There is no comparison of software and traditional methods that make tedious tasks even more difficult. Employees used to invest hours for monitoring inventory, generating reports, processing orders, and timesheet tracking. These tasks were time-consuming and lowered the morale of employees, increasing the risk of errors.
ERP software solves all these problems as it can conveniently automate even the most tedious task. With its integrated database, ERP eliminates all the redundant and time taking tasks, like data entry. It improves productivity by allowing the system to do advanced calculations quickly. The automatic features free up employees and allow them to focus on other essential tasks to improve ROI. That means ERP software can increase business productivity, profitability, and efficiency.
Simplified Risk Management
ERP is must-have software if your business expands internationally to keep track of imposed regulations on the business. Even if the business is local, there is a plethora of human resources, information security, and environmental rules you need to consider.
The good news is that ERP considers these regulations so that businesses can maintain compliance. The software incorporates built-in auditing features to assist businesses with documenting tax provision and chemical use. This makes everything incredibly easy, from formulating reports to sending them to the pertinent governing authority. This feature makes ERP software a great tool to manage risk.
Final Thoughts
In a nutshell, ERP software is a panacea of all the hectic, tedious, and manual business functions. The advanced software is multifunctional and helps businesses improve functions, accuracy, reliability, and financial management. The integrated system can manage a wide range of business activities, from supply chain management and procurement to accounting and operations.
In other words, businesses cannot deny this all-in-one software’s functional significance to enhance their overall productivity.
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