16. January 2017 · Comments Off on Small Business Finance – How to Calculate Your Needs · Categories: Finance

Your optimism on the future of the business may overshadow the crucial aspects and specific details required in keeping the business on the progressive status. Sometimes, owners happen to be very aggressive and confident in terms of financial standing that they tend to become very lax when dealing with borrowing money. This creates a big problem since every cent of the money borrowed needs to be put into proper use. Unfortunately, what happens to some is that when they have the chance to borrow money, they borrow more (or less) than they require.

So when it is time for you to take a small business finance, you have to know how to calculate your needs.

There are several factors that affect the amount of money you need. They are worth discussing one by one.

Credit rating – The eligibility for a loan, especially on small business finance, is based mainly on the credit rating of the person. A good credit score means higher amount of loan and lower interest rate. Tip: Obtain a copy of your credit report long before you approach a lender. With a good lead, you have enough time to improve it further or to have your score fixed should there be any inaccuracies. Also gather all your business documents. This includes financial statements with attachments and schedules, tax returns, financial statement (interim year-to-date), and other documents that will help the lender assess your loan application. By doing so, the processing time is reduced.

Savings – Establishing a business or keeping a business running requires a good capital. Pulling out money from your saving will significantly reduce the amount of money you require for a loan. Tip: before you borrow money from lender, tap your resources first. This can cut the amount of money borrowed and the interest you pay, which in turn will increase your profit further.

Expected return/monthly expenses – Before borrowing money, project the amount you can afford to pay back. Your expected income minus the monthly expenses should be well over your loan payment.

Amount required – How much money do you need? Where should the loan go? These 2 questions should be answered first before you go to a lender. You do not simply say, “as much as you can lend” when you asked by the lender on how much money do you need. A reply like this will definitely shut your chances of getting a loan. Have a good estimate of how much money you need. Know where the money should be spent. This way, you can better plan the repayment or project whether or not you can afford to pay the loan back. Another good thing about knowing exactly how much you need is you can carefully manage your finances against other factors that were mentioned above.

Your credit rating, savings, expected return, monthly expenses, and amount of loan required should therefore be included when calculating your needs.

How to Calculate Your Needs?

Once you know where the money should go, identify which items are optional and which are necessity. Having a good funding on your small business is imperative but creating an impartial judgment towards management of funds will bring you a long way. Pinpoint the total amount of money you need by enumerating the small detail. For example, the start up expenses you may include: installation of fixtures and equipment, fixtures and equipment, decorating and remodeling, starting inventory, licenses and permits, legal and other professional fees, deposits with public utilities, consulting and software, advertising and promotion for opening, cast, etc.

Then ask yourself, “Can you afford to pay for the loan?” Borrowing is easy, paying it back can be a problem. So to make sure that you can afford to pay the money back, make a good projection of the future income of your business. Compute your monthly expenses which may include the following: monthly expenses, salary of owner-manager and staff, rent, supplies, advertising, telephone, utilities, delivery expenses, insurance, interest, taxes, maintenance, legal and other professional fees, etc. Deduct these expenses from the projected monthly income. Is your net income more than enough to pay your loan? If yes, then the loan can be borrower. If not, then it is not worth the risk.

Finally tap all your available finances. Do not rely entirely on your lender. Subtract the amount of money you need from your savings. The difference should only be the money you should borrow.

29. December 2016 · Comments Off on Finance – Money, Money · Categories: Finance

Finance is a big word for some of us. It’s a little scary. Maybe you immediately go to thinking about “high finance.” That’s even scarier. But what is the field of finance really about? Money. Okay, so money can be a scary word, too, but it’s a little more manageable because we use it more often. In fact, money management is what finance is all about. It can also mean raising the money for something or lending money to someone on credit.

“Finance your dreams,” they say.

You read about people in ordinary jobs, with ordinary lives, who manage to save and invest their money so they can do the things they really love. There’s a whole book about that. Have you read “The Millionaire Next Door?” It’s a good book and it does give us ordinary people some inspiration about going for our dreams. You don’t have to become a millionaire, though to finance some of those dreams.

Think about it. What is it you’d really like to have money for?

Do you want to open a coffee shop? Self-publish your own book? Backpack in Egypt? Make jewelry and sell it at fairs? Paint?

Whatever your dream is, it’s do-able. Do the math. First you want to know about how much it’s going to cost to finance this dream of yours. That’s going to take a little research. Get on the web and look for information. Call people who have already done what you want to do and ask them out to lunch. Most of them will be happy and proud to tell you how they did it. You might even make a new friend.

You’re going to be surprised in many ways. First, it may not cost as much as you think to get started. Second, once you start thinking in new directions, new ideas on how to finance this dream will show up. Third, most of us could save quite a lot by putting a little bit of money aside from every paycheck. Even 5 percent adds up to a lot in just a year.

So what are you waiting for? An engraved invitation? Here it is “You are cordially invited to have fun financing your dreams!” Now get started!

08. December 2016 · Comments Off on Personal Finance Advice For Life · Categories: Finance

The airwaves are filled with personal finance advice, advocating countless products, investments and disciplines for creating wealth and financial largesse in your life. With all the advice available regarding your finances it is easy to get lost and lose focus on the simple principles that if applied, have been tested to create wealth in your life.

Any sound personal finance advice plan should begin with the most important rule of money, and the one we often find so hard to find the discipline to keep. To create excess money in your life, one must first learn to spend less money than earned from month to month. This is an inviolable rule of personal finance, and I recommend you breaking it at your financial peril. Your credit, bank statements and retirement income will reflect directly how well you hold to this principle, so my advice is to without fail spend less money than you make.

Personal finance advice is filled with such maxims, but how do we follow this advice. If you do not already find yourself spending less money than you make, work towards this goal. Cut expenses and bills where you can, and seriously evaluate what spending habits you have that are need vs. want items. With a cold assessment of one’s finances, there never fails to be a series of costs that can be cut in the name of achieving this goal. Take my advice, do whatever it takes to spend less money than you make.

Successful money management has its rewards too, and is not all about just cutting the pleasures of life that can be purchased with ready capital and financial success. In following with this precept, the next piece of personal finance advice is to increase how much money you bring in from month to month. It sounds like basic financial advice, yet how many do you know in your own life that do not actively put focus and energy into increasing their monthly income.

These two essential pieces of personal finance advice should be applied at all times to your life. Always maintain a focus on finding ways to keep your spending below what you make, and a dedication to pursuing methods of adding more value to others in order to increase the money you are capable of bringing in each month.

The difference in savings and increase will surprise you. Do not get lost in the shuffle of personal finance advice, hold to these essential principles and build the common sense money habits that will create wealth in your life today.

02. December 2016 · Comments Off on Can The Bible Help Me With My Finances? · Categories: Finance

Can the Bible help me with my finances? Yes it can.

The reason I am saying that is that I found answers there that helped me with my own personal finances. There was a time in my life when my curiosity peaked and I spent a year researching only the passages of Scripture that pertained to finances. To my surprise I found multiple references to this subject called money. To say it peaked my interest is an understatement.

There are over 7,000 promises in the Bible and over 2,000 of these promises deal with money. Jesus spoke more about finances than he did about heaven, hell, and his second coming. Beginning in the book of Genesis we see concepts about money that still apply today.

To begin we need to look at some concepts about money that are outlined in the Scriptures;

1) The love of money is the root of all evil – there are so many crimes committed not because of money but because of an unhealthy love towards it. If we loved money less we would treat strangers better. People are reluctant to give because they can not see letting go of money.

2) You cannot serve God and money- God never says that He wants us poor; however he also never promised we would all be millionaires. His desire for us is that we seek Him first and not make the pursuit of money our life goal. We need to have enough resources to meet our family needs.

3) The worker is worthy of his wages – God believes in fairness. He wants us to be properly compensated for the work we do. Contrary to some beliefs, God wants us to work hard and be paid well for all that we do.

4) We must be content to experience joy with money – Money with joy is great. Nothing beats having money and people whom you love that you can share it with. You can have the best of both worlds with money and joy. That should make everyone happy.

5) Debt enslaves so we should strive to be debt free – Do the best you can to pay off your debts. The borrower is servant to the lender and being anyone’s slave by force is not good. Financial freedom is God’s plan for us all.

6) Your gifts make room for you – The gifts God has blessed you with are designed to make a place for you in the marketplace. Don’t sell yourself short.

Follow the Bible’s guidelines on money and watch your personal and company finances improve.

I dare you!

25. November 2016 · Comments Off on Why You Need To Manage Your Personal Finances · Categories: Finance

When personal finances are evaluated on a short-term basis, the importance of managing them well doesn’t really come into perspective. It is only after you analyze the issue with a long-term perspective and with regard to the future that you realize how important it is. You need to have good money management skills regardless of your income as this will determine how fast you will grow. You will be surprised to realize that there are people who make a lot less but they already have a set foundation especially when it comes to finances. You can very easily be able to set your finances in order so long as you follow the basics of money management.

Out of the many tips that you’re likely to receive regarding money management, the most important have a lot to do with budgeting, tracking your expenses and paying bills on time. These are the fundamentals for the modern-day person who has a normal working routine. The principals can also apply to people in business as they relate in a similar pattern. By looking at each of the aforementioned fundamentals, you will get a much clearer picture of exactly what it is you need to do so as to be financially stable.

Budgeting is a very essential part of personal finance as you get to know how much you’re going to spend and compare it with what you have even before you pull the money out of your pocket. It’s always a great thing to make the budget as you compare it with your income so as to assess whether the budget is within your income or not. The budget can be split to either be weekly, bi weekly or monthly; all depending on your flow of income. Come up with a reasonable budget that will not only focus on expenditure, but it should also allocate some money for savings and such like investments.

The other important aspect of personal finance is the need to track your expenses. There are many people who were surprised at how many unnecessary expenses they have once they discovered the secret of managing personal finances. Once you highlight your expenditure, you will be able to do away with the habit of impulse buying. You can thereafter put the extra money to better use and profitable investments that will safeguard your future. Paying bills on time is another thing to consider if you want to get your finances in order as this will help to avoid bills from piling or being carried forward to your next pay check.

The principals of personal finances clearly outline that the habit of paying bills late will destroy your financial future. This is because you will spend the money you get into paying those piled up bills and it will seem as though you’re not earning. Plan a workable schedule that will enable you to pay bills on time so you can be able to invest with the extra money that you’re left with. Planning your personal finances is very essential as it safeguards your financial stability as you never know when things may fall apart.

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