How to Protect Your Business from Financial Crisis

July 18, 2011 by Leave a Comment

Businesses are struggling to stay afloat financially. The pressure to take out loans to cover necessary expenses is becoming more of a reality for owners of small and medium size organizations. More often than not, these business owners rely on a combination of business and personal loans as well as  credit cards to make ends meet. This makes circumstances even more dire for the owner if profits are lagging, as owners can face filing Ch 13 bankruptcy.

Keeping a business financially viable means paying constant attention to the bottom line, as well as how your products and services are doing. Keeping a competitive edge in today’s business world requires sound financial planning and responsibility that extends beyond management level to the employee level. This is true for businesses of all sizes, but especially for small and medium size organizations that typically work with less revenue and staff.

All businesses need to have a sound business plan, a working budget that covers costs, and accurate profit and loss statements. Another key is hiring the right employees. Having the right human capital is an integral part to ensuring that your business can avoid a financial crisis. Many large corporations conduct extensive background checks on potential employees before extending them an offer. However, small business owners tend to forgo the cost of conducting a background check to make sure their candidates are credible and responsible, which can ultimately put the business at risk.

As part of the hiring process, employers must do their due diligence on candidates with the following:

  • Conduct a criminal background check
  • Run a credit check
  • Verify employment history

Following these procedures can help safeguard your business from employee theft and other problems.

 

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Beware – You Can Budget Yourself into Bankrupcy

July 12, 2011 by Leave a Comment
Budget 

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From Capitol Hill down to your home, everyone is concerned about the budget. Budgeting a household even with the best intentions, can lead to catastrophic situations. Here are some common budgeting mistakes to avoid

Budget Money You Really Have

If your income remains the same every pay period it is easy to predict what you will have every month. But too often people spend phantom money they plan to get with some overtime or a quarterly bonus. Until you have that cash you don’t know what might happen. You might miss work or get passed on for the bonus. It’s not real money, until it’s money in your hand.

Expect the Unexpected

A monthly budget balance to the penny can be destroyed by a surprise debt: illness, accident, taxes, etc. You might find a large chunk of your money is wiped out if you don’t have an emergency fund set up as protection.

Budget for the Future

If you spend exactly every penny each month you have nothing for the future. Build into your budget a plan for tomorrow. Purchasing stocks, bonds and mutual funds a little at a time with some money each month will pay off big time in the future.

Budget for Fun

You may have many bill and loans to pay, but you still need some fun. Put a few dollars away every month for a vacation fun or to buy yourself a present. You’ll be glad you did.

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What is a Mutual Fund and Why Should I Care

July 10, 2011 by Leave a Comment
Mutual fund 

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The world of finance has its own special language. Words like bears and bulls, accruals, kurtosis, and teenyo mean nothing to most people. These specialized industry words are known to only select few and may never see the light of day outside financial circles. Sometimes the words leak out and have meaning for us all. We know about loans and equity, but what is a mutual fund?

They are a long-term collective investment that collects many investors together to buy various stocks, bonds and other financial securities. There is a board of directors and fund manager that oversees the mutual fund to ensure it is giving proper returns to the investors and making appropriate trades (buying and selling) when it is not. The investors pay part of the returns to the manager and board for expenses and to act on their behalf and steer the mutual funds toward greater returns. Like any investment, there are no guarantees and some do lose money.

Mutual funds allow people who often don’t have enough income to invest as individuals to buy the more expensive stocks and securities. Combined as a group these individuals have more investing options and can take part in more diverse and lucrative finances. Mutual funds are overseen by the US Government but not insured by them.

Mutual funds give people many more options with their personal finances than investing alone.

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Keeping Your Finances Stable

July 9, 2011 by Leave a Comment
NEW YORK - MAY 20: In this photo illustration...

Image by Getty Images via @daylife

With the strain many people are feeling as the economic recession continues, it is becoming increasingly difficult to keep finances stable for some families. Unfortunately, due to this fact, there has been an increase in foreclosures and bankruptcies that have left people in difficult living situations and put their credit in turmoil for years to come.

However, there are ways that people can gain control of their finances and create stability, regardless of how deep in the hole they might find themselves. Below are some of the more commonly used methods that people are turning to for financial stability.

Stop the Unnecessary Fees

One of the biggest problems people face while in financial disarray is the constant barrage of fees associated with being late on payments and going over the limit on credit cards. For people already in debt, these fees simply add fuel to the fire. However, financial institutions that offer services such as a payday advance can help neutralize fees by providing money before payday. This helps make sure bills do not get paid late as a result of a paycheck hitting on the wrong week.

Develop an Easy-to-Follow Spending and Savings Plan

Creating a straight forward spending and savings plan is one of the best ways to get out of debt and gain some financial stability. Going this route will help you keep track of spending, while simultaneously eliminating careless expenditures that are a drain on your finances. Additionally, it will help you allocate these funds toward outstanding debt, allowing you to pay more off at a faster rate.

 

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