Four Ways to Know if a Business Line of Credit is Right for You

by Crestmark 11. September 2013 11:05

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Starting a new business is not the only time an entrepreneur may look for help with financing. Some small business owners—especially those who operate seasonally—experience fluctuations in cash flow throughout the year. A line of credit can help to smooth over the ebb and flow of sales and cash flow throughout the year. 

A business line of credit provides on-demand funding, and there are a number of different types of lines of credit ranging from unsecured, meaning that it is not backed by any kind of assets; to secured, backed on a general basis by all assets of the company, or by specific assets that are structured into the funding formula of the line of credit.

Here are four questions to ask yourself before approaching a lender:

1.) Does your business have uneven cash flow? The best use of a business line of credit is for paying off expenses in the short term that can be easily paid off in the long term. This works well for short term expenses such as payroll and inventory.

2.) Are you able to pay off the balance of your credit line? It can be tempting to carry a balance on a line of credit, but this will ultimately damage both your relationship with the lending bank and your company's financial health. Unless you are able to pay off the balance quickly, you should not run the risk of borrowing against a line of credit, but possibly consider a term loan for long term items like buying equipment.

3.) Would a business credit card be more appropriate for your needs? A line of credit will have a lower interest rate and higher credit limit than most business credit cards. It will not, however, provide line by line tracking of expenses along with date and location of purchases. This can be very valuable for record keeping and future planning, and also allows you the flexibility to provide individual cards to key employees/staff for travel or other day to day business expenses.

4.) Are all business owners available to apply? If your business is a partnership or has multiple owners, at least 80% of the owners must be represented in the credit application. This makes applying for a line of credit a decision that must be made across all owners of your business.

If you are just starting out, looking to obtain working capital for your existing business, or want to grow from your established base, Crestmark’s business development team can work with you to determine which type of financing solution is the best fit for your current business situation.

 

 

 

 

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Top 5 Mobile Apps for Entrepreneurs

by Crestmark 29. July 2013 03:56

As an entrepreneur, staying organized while on the go will help keep your business—and even your day—running smoothly. And while the ability to keep constantly connected to your work with a smartphone or tablet can sometimes be overwhelming, a number of business-minded apps have been developed over the past few years to make your life a little easier.

1. Evernote: With a motto like “Remember everything,” this is going to be a top-pick for any busy entrepreneur. Evernote makes it easy to keep notes, files, and even clippings of entire webpages in one place which can then be accessed by both mobile devices and the Web. Potentially one of the best examples of this is using it for travel since you can keep all itineraries, confirmations, scanned travel documents, maps, and plans in Evernote, ready for when you need them.

2. Pocket: How would you like to have a virtual cloud that can store anything from articles to videos, straight from your browser or apps? That’s exactly what you can do with Pocket. Formerly called “Read it Later,” Pocket can save just about anything for you to read when you’re ready.

3. Square: A card reader, simple pricing, and smarter business tools make it easy for businesses of any size to do what they love and get paid fast and easily. Use the free secure card reader sent to you to swipe cards on-the-go from anywhere. The Square Register app is free and easy to setup – just link your bank account and you’re able to accept payments almost instantly. You have the option to pay a flat monthly fee of $275.00 or a 2.75% fee per swipe. You will see your payment quickly and directly deposited within 1-2 business days.

4. Mint: This one is valuable for business and personal use. Named Best Finance App by the 1st Annual App Awards and TIME Magazine's 50 Best iPhone Apps of 2011, Mint enables you to track finances in real-time. You can enter transactions manually or sync your accounts automatically to track investments, sort transactions by category, set budgets, and create alerts.

5. FreshBooks: Speaking of finances, this cloud accounting app makes tracking time, logging expenses, and invoicing clients portable and painless. It also boasts team timesheets for projects involving more than one person’s billable time, multiple datacenters to back up secure data, and online payments so you can accept payments and put that money to work faster.

 

As an entrepreneur or business owner, what apps make your life easier? 

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Social Media Time Management for Small Businesses

by Crestmark 28. May 2013 05:13


Small businesses are told to have a social media strategy to stay competitive.  For the most part, they know it’s necessary; they’re just not sure where to go with it.  Which social media outlets are most successful?  Which platform will get your company the most publicity? How do you manage your time between the endless amounts of new social platforms being released every day?  With all the other management and marketing strategies your business has going on, social media may seem like the last thing you want to add to your “to-do” list.  However, it doesn’t have to be a stressful process.

Develop a Plan: First and foremost, before just jumping into the social media pool, you’ll need to have a solid strategy.  Don’t just start posting and commenting without a plan.  Know your target audience; get a feel for who you’re trying to reach and what you’re trying to get out of using social media to reach customers. This will help you maintain credibility and relevance as a business.

Test the Waters: So this is your first social campaign- maybe ever.  Don’t panic!  Social media is a platform that doesn’t thrive on perfection.  Use trial and error to determine what engages followers.  Ask questions.  Don’t be afraid to learn from others and even learn from your clients!  Being “new” to social media can be a great excuse to learn and gain respect from consumers who don’t expect you to know all the ropes just yet. 

Start Small: One of the biggest mistakes you can make in your social media endeavors is to take on more than you can handle.  If this is your first ever attempt at going social- don’t create a Facebook, Twitter, LinkedIn, Pinterest, Vine, and Instagram all at once.  It is always better to do one thing really well than to try and haphazardly to have your hands in everything at once. For entrepreneurs—and really anyone in a B2B industry—Linkedin is a great place to start to grow your network.

Track, Track, Track: Keep a close eye on your website analytics and definitely take a few minutes to install a social media dashboard. These custom Google dashboards will not only allow you to see how many people are coming to your site from every social network (whether you have a profile on there or not), but what devices those users are coming from and how those users end up converting.

Have you already gotten started with your social media efforts? Connect with Crestmark on Linkedin today! 

 

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Seven Questions to Ask Yourself When Testing a Business Idea

by Crestmark 8. April 2013 06:45

Most people have come up with a potential business idea at some point in their lives. After all, the idea is the easy part. Before investing time or energy into a new business, it's important to critically analyze the idea to ensure it will be a smart use of resources. Here are seven things every new business owner should consider before moving forward and getting serious with an idea: 


1. What is the customer profile? There’s no sense in starting a business without any customers, and the better you understand your potential market, the more likely your business is to grow and succeed. The current state of the economy makes it even more crucial to take some time to research your target audience because targeting everyone in general will be too expensive. Who are your potential competitors targeting? You might find they’re missing out on a niche market you can take advantage of once you’re in business.

2. What resources are needed? Understanding the full, up-front cost of a project is vital to ensuring its success. Consider the cost of materials, labor, advertising costs and other expenses. Will the costs outweigh the profits? If an idea isn't financially feasible, put it on hold for a later time.

3. What is the purchasing cycle? The longer it takes for profits to reach the business, the more money must be spent up-front. Understanding your purchasing cycle beforehand will help with budgeting. Once you’ve decided to move forward with an idea, remember—whether your business will have a short cycle like most retail stores, or one that lasts for months: find ways to reach your customers at each point in the cycle.

4. What product or service is this replacing? In order to effectively sell something, a company must convince its customers to buy its products instead of something else. Determine what item customers will be willing to give up in exchange for the service offered by the new business. This will also help when the time comes to advertise the product.

 

sales forecast5. What is a reasonable sales forecast? Determine how many sales can be reasonably expected, and compare this figure against the production cost of the item or service. For example, a restaurant owner might consider the occupancy of the restaurant, the average cost of a menu item and how many people could be expected to stop in on an average day. It might help to review competing businesses to draw estimates from their data. 


6. How much growth potential is there? If you’re producing a hand-crafted item, for example, can it be mass-produced if the demand requires? Services that must be rendered by a skilled individual cannot be produced in high quantities. Leave room for growth, but establish limits early on.

7. Will the idea be viable in several years? Some business ideas seem appealing at first but would not be attractive in the long haul. Before deciding on a new enterprise, an entrepreneur needs to decide if he could be happy at that same business two, five or even 10 years down the road.


Of course, a successful business needs more than a smart idea, but testing each new idea against these criteria will help to create a secure foundation for the business to grow upon. 

 

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The Internet’s Role in the Rebirth of Mom-and-Pop Shop’s Success

by Crestmark 24. March 2013 07:02

Family-owned businesses were constantly steam-rolled again and again by the all-powerful corporate conglomerates in the 1980s and 90s. These big-box shops were able to offer a wider variety of goods to their customers at a lower price, and their size enabled them to steamroll the smaller and more specialized businesses. Just think, if you had the choice between Starbucks or a shop called “Jim’s Beans,” chances are you drove right past the Beans for the Bucks. 

mom and pop shop

In recent years, however, a quiet revolution has begun to occur. Large companies, no longer able to sustain their growth and too bulky to adapt to changes in the economy and consumer needs, have begun to lose their footing.  As a result, small mom-and-pop businesses are taking advantage of the opening and have once more started to earn prominence.

This “rebirth” has all become a reality thanks to a little thing we all know and love: the Internet. With the growth of online stores, entrepreneurs are able to virtually market their goods all over the country. This increased visibility has led to some small online start-ups becoming extremely successful.

So how is the Internet acting as an almighty equalizing power?

-- For one, low overhead cost.  Having your store online is far less expensive than operating the full-on brick-and-mortar home front. And, if necessary to choose one over the other, it's possible operate the wired store with fewer employees. This enables these business owners to hold tighter profit margins and be more nimble in their pricing strategies.

-- Personal discovery.  More often than not, a consumer will search the web for ideas on what to buy before romping around the streets to shop.  With an easy-to-navigate site advertising your goods, marketing the products in your store is not only manageable; it’s easier.  This is especially true of specialized businesses. Specific goods occupying certain niches are easy to search for and thrive on the Internet.

-- Reaching out to buyers.  Gone are the days where small businesses can only cater to the locals.  Before marketing through the Internet became possible, the power companies that owned distribution channels were conclusively the most successful.  This is no more! With online shopping, the web makes it possible to market products to consumers around the world.

-- Marketing personality. While selling to buyers across the country may seem impersonal, the Internet has created an answer for that as well.  A cozy, interactive atmosphere is maintained through social media outlets.  Business owners can communicate directly with consumers through blogs, Facebook, Twitter, you name it!  This encourages interaction, and participation which helps to foster customer loyalty and relationships that big-box companies can’t compete with.

While an online strategy is beneficial to pursuing growth, what consumers most want to see is diversity.  A street-side store has to focus on making a bigger presence online, while strictly online stores are beginning to develop more physical locations.  With diversity comes the ability to reach as many interested customers as possible.  Technology is constantly changing and improving, therefore; it’s important for small business owners to stay on top of trends and continue growth.

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