Reliant Funding provides customized, short-term funding to small and mid-sized businesses nationwide. The Reliant Funding mission is to help small and medium-sized businesses thrive. We work with our clients to find the best solutions to their financial needs while delivering the highest level of customer service and care.
Entrepreneurship for US veterans was a natural option post world war II and the Korean War. But the number of veteran-run businesses have dropped drastically in the past decade. This sudden fall in the numbers of the veteran-owned small businesses also impacts the number of veterans who are hired for employment.
There is still a stigma around hiring war veterans for employment, especially with ones that are physically disabled. It is proven over the years that only an entrepreneur who was a veteran himself trusts and accepts other veterans in his business.
Many veterans have entrepreneurial plans that are amazing. But, they go to the traditional financing institutions like banks where they are asked for two years of entrepreneurial experience for sanction of loan. Most of these veterans are fresh out of the military and face shortfall in this criterion.
Another major challenge faced by veterans is that they do not explore a lot of small business avenues. A study shows that 71% of the veteran-owned businesses are from these 5 industries; Finance and Insurance, Wholesale trade, retail trade, construction, and professional/ technical services.
There are many more industries like health-care, restaurant business, automobile, etc. that veterans can venture into. This will expand the chances of them succeeding as an entrepreneur.
Successful entrepreneurs are created out of excellent connections they maintain. In today’s all-volunteer armed forces, many veterans come from military families. This isolates them from the non-military Americans. Thus, it is difficult for veterans to mingle with their clients or their vendors. The curbing of outside connections also decreases the number of opportunities that knock on their door.
Though it is difficult for veterans to develop a friendship with non-military citizens, they can seize their opportunity during their service days.
“ The best advice I can give my fellow “vetranpreneurs” to grow their small business is to NETWORK! ”
Most of the commissioned officers in the armed forces are from prestigious or ivy league colleges. They are well-connected within their universities and are also investors’ darlings. So befriending them can be helpful when you come out of service and are looking for opportunities.
As a veteran business owner, you might have to face a lot of challenges to start off on your own but if there is a doubt of ‘Do I have it in me to become an entrepreneur?’ then this answer is for you.
“ You go through so much in the military, but really what the military is teaching you is how to be resilient. You plan a mission, and then you execute, but nothing ever goes according to plan. Your job is to continue to lead in not-ideal circumstances. ”
HalfakerVeteran Founder and CEO of Halfaker and Associates
The Help You Need to Grow
If you are confident about succeeding in your business but need a little external help to get your start-up running, then these business resources might help.
The US Small Business Administration’s website has a dedicated page (VBOC) of resources for veteran-owned small businesses.
Warm up: The Pre Business Plan Workshop gives a top-level understanding of running a business and also gives deep learning of using the internet and the digital space to run the business.
Picking the right concept: The Veteran Based Outreach Center conducts assessments and advises on the right concept suitable for business and also the investment involved. The strengths and weaknesses of the business plans are also discussed.
Finding the Right Mentor: VBOC will help you maintain the profitability of your business by conducting regular onsite visits, reviewing your financial records, etc.
VBOC’s are in most of the states in the US. So find the one closest to your place or the location where you want to start your business.
Money is another huge stop gate for veteran-run businesses. There are many alternative financing options that benefit veteran-run businesses that can be explored.
The SBA provides upfront guarantee free loans of up to $125,000 for veteran-run businesses. The guarantee is way less than for usual loans even for amounts above $125,000. The SBA also has partnered with other financing firms to get competitive loan quotes which allow you to make informed decisions.
Sustaining your business needs a continuous flow of projects. Veteran owned business certification from SBA can help you with this. All the veteran-owned small businesses that have enrolled in this will be given special privileges during government contracts and they will also be alerted if a service related to their field is required in the government offices.
There are many more advantages for service-disabled veterans and women veterans who start their own business. It is said that many more women veterans become entrepreneurs because of these schemes, though the exact number of women veteran-owned small businesses might be slightly tainted by the transfer of businesses from husbands to wives just to access these schemes.
Veterans own approximately 2.52 million businesses in the US and many of these businesses have sustained for years. Dreaming of being an entrepreneur and starting a business is a challenge, be it a veteran or a non-military citizen. Analyzing the weak spots, exploring new avenues, investing in the right technology are some of the things you can do to make your business a successful one.
The military is one of the best places where you can learn to lead a team, motivate them to do their best at high-stress situations. Hence, grow and sustain your business by leading your team with confidence and patience through all the challenges and sudden pitfalls.
As a restaurant owner or manager, you may hardly have time to jump from one task before being pulled into another. Even in the best cases, running a restaurant is characterized by hard work and long hours. Luckily, the ability to streamline how you schedule and track daily tasks is made easier these days by technology. We’ve found the top apps to revolutionize your restaurant business through improved communication, productivity and management. Read on to learn some of the best apps for restaurant owners/managers for 2019.
When I Work is a cloud-based employee scheduling solution that helps organizations track time and attendance, create and edit employee schedules, add new jobs to the calendar, review timesheets and fill shifts. It allows users to manage schedules and track time on mobile devices using native and browser-based apps. Employees get mobile alerts when their schedules change, and they can request shift changes or time off using the app. Managers are notified when employees make time-off requests and can approve them online. Users can import employee data from spreadsheets or CSV files and help avoid schedule conflicts. Communication methods such as group email services and custom texting are also supported.
Hootsuite is the world’s most widely used social media management platform with over 16 million users worldwide. It is designed for organizations to execute social media strategies across multiple social media networks, including Facebook, Instagram, Twitter, LinkedIn, Pinterest and YouTube. Teams can collaborate within a secure environment across all devices and departments to manage social media profiles, engage with customers, and generate revenue. Users can monitor social media platforms for both keywords and locations-which means that restaurants can both pick up on what customers are already saying about them and target potential customers who might be looking for recommendations in the same geographical area.
Orderly is the essential way to manage your food costs. It saves you time and money, taking you out of the freezer counting inventory and into the heart of your restaurant. Instead of stacks of invoices, data entry, and inventory management – you get a simple easy-to-read dashboard of exactly how your restaurant is doing. Just snap photos of your invoices and update your weekly sales projections. They will take care of the rest.
Restaurant365 is a cloud-based restaurant-specific software platform that combines key restaurant modules with an integrated accounting backbone. They provide greater control over food and labor costs, simplifies managing multi-units, and automates the accounting and reporting processes. They offer an integration engine with connectors, import/export functions, and a set of Open APIs to truly enable data to flow and systems to talk. It’s a real integration of transactional and useful information.
ReviewTrackers is the award-winning reputation and review management software trusted by over 40,000 businesses. Track reviews on Facebook, Google, TripAdvisor, and 100+ review sites. Centralize all your review data in one app and respond to customers faster. You can also request reviews via hassle-free SMS and email campaigns and harness machine-learning technology to find insights from your reviews.
While there are hundreds of applications to choose from to streamline your restaurant business, we hope you’ve found our list resourceful for 2019. Are you looking to expand your restaurant in the new year or need help covering overhead costs? We can help with our fast and easy small business funding solutions.
Reliant Funding recommends a review of each app to determine if each meets business needs and regulatory compliance.
Being an entrepreneur as a woman can seem challenging, especially if it is a small business. Not many budding women entrepreneurs are aware of the benefits of registering a business as a woman-owned business. For starters, you get officially certified as a woman entrepreneur at federal as well as local levels. The largest buyers of their products and services are large organizations and the government. They also sign contracts specifically with women entrepreneurs which turn out to be a continuous source of income.
To get these benefits you have to get certified. Certifications are of two kinds; Women-Owned Small Business (WOSB) and Woman Business Enterprise. The purpose of these certifications is not to give women any special treatment but to increase visibility. Some of the main differences that registering as a woman-owned business can make are discussed in the rest of this article.
The government knows how challenging it can be for women entrepreneurs to get federal contracts, to make bids and to compete with larger businesses. Many programs can help woman-owned businesses win federal contracts. This will give a constant amount of work for the business to grow and thrive. The 8(a) Business Development Program by the Small Business Administration grants millions to small business owners who are trying to grow their business. Women and minority-owned businesses are the primary candidates to receive economic assistance under the program. Agencies including the Department of Defense are striving to award 5% of their contracts to WOSBs.
Many resources can help you decide whether federal contracting is the right choice, find opportunities and make successful bids. The SBA provides a lot of government contracting resources, online & offline courses, contracting assistance programs. The SBA has also set up Procurement Center Representatives in six locations across the country for any additional assistance with federal contracts. Furthermore, Women Impacting Public Policy (WIPP), the SBA and American Express OPEN have Challenge HER, a program that provides women with events, webinars and education to compete for federal contracts using WOSB.
There are multiple Grant programs for woman-owned businesses. The most common source of grants is the government from local and state levels. They vary depending on which state the business is set up. For example, there is the Women’s Economic Ventures Small Business Loan Fund and Illinois has Minority, Women and Disabled Participation Loan Program. But there are also private organizations that do so. The main benefit of such grants is that they don’t have to be paid back. This is an excellent option for businesses running on a tight budget and may be unable to pay off a traditional loan.
It is not easy to get a grant sanctioned; whether it’s from a government or a private organization. The research to find the best agency that suits your business needs is tedious, and agencies have rigorous criteria that are often difficult to meet. Which is why out of the 2700 proposals submitted daily, only less than 200 grants are approved. Even if you get it sanctioned, you won’t be able to use the money as you please, you have to stick to the plan, comply with rules and submit regular reports to the concerned agency. The best substitute would be to get alternate funding for your business.
Small businesses owned by a certified woman entrepreneur can also stand a better chance of obtaining loans. The Prequalification Pilot Loan Program can help women entrepreneurs create loan applications and improve the chances of obtaining them. The program uses intermediaries like Small Business Development Company and Women’s Business Development Center to assist women entrepreneurs in applying and securing loans. Businesses can only get up to $250,000 as a loan from the SBA with 85% guaranteed up to $150,000 or 75% for loans over $150,000. Intermediaries like the above mentioned will help find more competitive lenders to secure a loan.
Many state governments facilitate registered women-owned businesses with specialized training and networking opportunities. Women entrepreneurs are actively encouraged to participate in municipal purchasing programs in the states such as Georgia and California. These programs can be game changers for small businesses, especially if they are in the startup stage. Some benefits of such networking opportunities are:
Whether it’s for feedback or for discussing multiple point of views, networking is great for sharing knowledge. Experienced entrepreneurs in the group may help you avoid some pitfalls that they faced when they were in the same position as you are in now.
You are not just meeting the people in the group, but can also subsequently meet people in their network. There is always the possibility of getting a referral if someone they know has a requirement that your business can meet.
By regularly attending networking and training sessions, people will begin to notice you and your business. This will build your reputation as a supportive thought leader who provides tips and information to people who need it. You are more likely to get more leads and referrals.
The entrepreneurial environment is progressively becoming more favorable for women entrepreneurs than it was before. This is evident from the fact that 36% of all businesses are women-owned in the US. It is essential for aspiring women entrepreneurs to get themselves certified and registered as a woman entrepreneur to get their business dreams moving at a much faster pace.
Located in Palms Springs, the highly rated downtown restaurant: Bistro Wood-Fired Pizza, serves up hand-crafted cocktails and delicious chef-inspired offerings. The owner took over the restaurant in 2016 and transformed the menu, creating a hotspot for patrons visiting during the busy tourist summer season.
They’ve gained attention for their revamped menu which includes a variety of dishes from thin crust, wood-fired brick oven pizzas, to grilled Angus miniburgers and craft beer and spirits. The unique ambience is set in an industrial, yet rustic space with an urban feel, keeping locals and tourists alike coming back for more.
The restaurant is wildly popular throughout the busy season, but business tends to slow down toward the beginning of the hottest part of the summer. When the temperatures rise, many of the local small businesses in the area struggle to cover operational expenses during the offseason. While some try and reduce costs due to the slump in sales, owners must keep the business afloat until the busy season kicks off again. The owners of Wood-Fired Pizza needed a fast solution to see them through their annual slow season. They reached out to Reliant for help.
“ I liked the ease of application process. ”
Slow Season: A fast funding solution from Reliant can see you through a slow season without the wait. Without the hassle.
Bridge Gap in Receivables: You know the money is coming. Quick access to working capital right when you need it keeps the business running as usual while you wait.
Purchase Supplies/Inventory: A slow season shouldn’t actually slow you down. Make investments your way and on your timeline.
“ I was pleasantly surprised at how easy the application process was and how fast we received the funds ”
Why Reliant Funding
Like many other small businesses, seasonality is a reoccurring issue for Bistro Wood-Fired Pizza. The owners needed to cover operational costs as well as pay fees associated with annualized expenses like property tax and license renewals. Before working with Reliant, they approached a bank to obtain the needed funds but grew frustrated with the loan process and level of difficulty it took to get a timely approval.
It’s a story that is all too familiar for small business owners in America. With the funds from Reliant, the restaurant could move forward, gear up for the busy season, without letting the slow season bog down operations.
Reliant Funding is proud to play a part in helping small businesses who need a quick cash infusion to get through a slow season. If your business could use a cash flow boost without the hassle of a lengthy application process, a funding solution with Reliant could be a right fit for you.
“ Compared to banks it was like night and day. ”
The best interests and future success of the businesses we work with are always top of mind.
We know every business is unique, which is why we’ve developed the fastest, simplest and most flexible business funding solution available in the market today. If you recognize an exciting opportunity for your existing small business but lack the capital you need to execute on it, we have dedicated account representatives waiting to assist. Learn more about how we can help your business by connecting with us today.
As the owner of a retail business, you would have probably thought about getting some external help. You can put up a “pro-needed” advertisement for the vacancy at your store to take over a part of your workload, but the most challenging part in itself is finding that right person.
Here are some quick tips on how to hire and manage your retail store employees so that you get the help you need and don’t continue to face increased recruiting and turnover costs.
It’s not easy to find and recruit great talent for your store. Your existing tactics and strategy might or might not be helpful to recruit as many people as you want but this advice by customer service expert- Anne M Obarski might help.
“ Great employees are not born, they are developed in a business atmosphere where training is stressed, individuality is encouraged and personalities are respected. Word travels about the work environment in all sizes of stores. The key to recruiting quality employees is promoting and possessing a positive work environment no matter how large or small you are. ”
By keeping this in mind, your initial step is to develop criteria for the ‘perfect retail employee’ by having a concrete retail job title and job description. Make sure you mention their responsibilities, day-to-day duties, physical requirements, qualifications, and experience level well in the job description.
You might have a cash flow crunch and not have enough budget to prepare flyers or boards to hang outside your store. So, you can implement cost-effective ways to advertise your job openings on social media accounts like LinkedIn, Facebook, Twitter, etc., or asking for referrals.
To hire full-timers or part-timers? To contrary beliefs of employing a number of part-timers to maximize your business’ flexibility, this might cause disengagement between your part-time employees and your business’ brand mission as they are juggling between multiple jobs. Thus full-timers are preferable for your retail stores.
Devil is in the detail: Asking generic questions about your candidate’s past experiences or future goals will not work in this industry. Make sure to probe upon their knowledge and check how detailed their answers are. Customers love the staff who are highly knowledgeable about their product or service and are also willing to enthusiastically share this knowledge. Thus, zero upon a candidate who can elaborate on any given topic and answer without getting agitated when asked repeated questions.
Why is your store their paradise: It’s not enough to grill new applicants you have to sell to them. Give them every possible reason why your store is a great place to work in. Talk about your retail store’s history, how you view the environment you have created for your customers, the exceptional services provided by your store, your management style and how you want your customers to feel. This is one of the most important aspects of hiring, the best applicants will see how you are a fit for their style of working and be more inclined to take this job.
Your gut can mislead you: If the applicant is successful in ticking off all the boxes that make him suitable for the job, then find something not to like about them. Don’t go with your gut instincts and get tripped, ask questions like – Can you give me an instance when you didn’t provide great customer service? What did you do to handle that situation? This is where you can analyze and differentiate the candidates. If the candidate pinpoints such an instance and tells you what they would have done differently and what their learnings were, then it marks the trait of a great employee. Whereas the low performer will just tell you that there was no such time, or it never happened.
Look for Team Players: Retail requires employees who are great people’s person. Your employee should enjoy being around people and taking care of their queries. This quality will make the customer experience pleasant. So, make sure during the interview you craft your questions accordingly.
Onboarding new staff is the process through which new employees learn the responsibilities, duties, and program they need to work on.
How to manage new employees
Hiring a new employee is only half the river crossed. You also have to onboard, manage and train them to deliver their best possible work.
Unlike large organizations, who have typical formal on-boarding and training programs for new hires, small business’ onboard people on a case-by-case basis.
Introduce the employee to vendors and key customers in your business.
Make sure you observe more than you talk and do not sound like a person who knows-it-all, be open to ideas, suggestions, and new ways of doing things.
Motivation is key, so understand what your employees are inspired by. Encourage your employees accordingly and make them do better at their work.
People make mistakes, help them learn. Consider helping them reflect on their actions, and on what can be done differently the next time around for improved results.
Well, after you put in so much effort and time to search, interview, hire, train and then lead a new employee, it’s devastating when they prematurely leave.
You have to go through this whole hiring process again. A bunch of highly energetic, talented and committed team is what makes a business successful. How costly it is to substitute an employee though?
There are various ways to increase retention for your retail employees:
Mostly, employees leave for better opportunities, not necessarily better pay. Make your employees see future opportunities within your company and envision where they could be in the next five years and provide them an advancement roadmap.
Get feedback and obtain your employee’s opinions and concerns in every aspect of your business.
Flat hierarchy in your workspace and keep your doors open for all your employees to walk in.
The expedition to find the best employees is a mixture of art and science. It requires good intuition as well as strong judgment. If you have made any mistakes in the past, learn your lessons, and move on. Hiring and managing employees is never an easy task, but that is how you get your store properly staffed. With the above-mentioned tips and strategies, you will have a better understanding of what else you can do differently to improve quality employee count in your retail store.
It’s well known that small business owners are fixed for time. Amongst everything they have to handle on a day to day basis, they simply have no or little time to market their business. Consequently, most small business owners use marketing only when business is slow, and stop all marketing when business picks up again.
Marketing requires a continuous effort for best results. An effective marketing strategy will require minimum effort from you, and still help position your business throughout the year. Unfortunately, there is no magic spell to it. The type of marketing a business requires depends on the type of business or service and its audience. After all, marketing simply ties the customer and business together. Ask yourself the following questions before deciding on a marketing plan:
What demographic is your customer base made of?
Do you get more footfalls or are they online?
Where do they look when searching for the product/ service you offer?
Who/ What influences their buying decisions?
In the digital world, marketing offline can seem unnecessary. However, this can help you stand out from the rest of the crowd.
Use your Community: Once you understand your demography, the easiest thing to do is connect with them through your local community. You can sponsor local events, distribute free samples, or even help out at charities.
Create an Elevator Pitch: You should always be ready to market your business on the go. You never know when you may bump into a potential investor or customer, and talking to them in person about what you do can actually create a lasting impression. Most adults have an attention span of eight to ten seconds, and if you create a great pitch, you may be able to hook them onto your business.
Networking: No, we don’t just mean Linkedin. Go out there, meet some people and shake some hands. Anyone and everyone can add value to your business, so attend conferences, meet different people and build a network. This will help you know the who’s who of your industry, and learn how you can be of service to others and perhaps they, to you.
Collaboration: Collaborate with other businesses in the area or industry during events. It’s hard for small business to create sales or offers that don’t cut through your profits but connecting together with other businesses may let you put out attractive deals for customers. Do this during local holidays, fairs and other events to get the maximum outreach.
Be an Expert: You’re an expert in your business so let everyone know. Sign up to Help a Reporter Out (HARO) and give journalists information and quotes to spread the word about your business. Give out speeches at local events and follow industry news. Portray yourself as a thought-leader in the business space.
Rank on Google My Business: Google My Business is the best way for local small businesses to attract local clients. When you add your business to Google My Business, all your Google business data is pulled into one central place; Google Maps, Google Reviews, Google profile, Google Insights, etc. It’s not at all hard to manage, once you’ve created a profile and updated reviews, Google handles the rest for you. If anyone in your locality searches for a business in your industry, your business can rank before even organic results.
Content Marketing: Content Marketing is one of the strongest ways to market your small business. Paid advertising can help bring in short-term results, whereas content marketing can go the long run. Content marketing not only includes blog posts but all content media including videos, podcasts, images, etc. The perks of content marketing is simply this; the more content you put out, the more you register in the minds of your customers. Creating content can be a challenge, but luckily several agencies can handle this for you. And in case you aren’t able to spare the budget for one, you can always opt for a short-term financing option.
Facebook Ads: Facebook ads are one of the best in social media for small businesses. This lets you do focused marketing only for your target group based on factors like age, sex, area, interests, online shopping habits etc. This system is also one that’s easy to use and isn’t heavy on the wallet.
Social Media: Facebook, Twitter, Instagram and LinkedIn each target different range of demographics and each can be used optimally depending on your business. All content created can be shared across social media though this may be a time consuming process. However, several tools such as Buffer can schedule and post the content for you for a decided period of time.
Email Marketing: Email marketing is proven to have the highest click-through rates. In fact, it is one of the easiest marketing techniques to use because it can run fully automated and reach out to a larger base of customers. The key here is to incentivize with valuable, key information that your customers will actually read, rather than deleting or sending to the spam folder. Email marketing has proven to have the highest conversion rates.
In the end, a marketing strategy can change from business to business, but every business needs one. Contrary to belief, most ideas don’t work in a jump but only as little at a time. Study your demographic and your marketing strategy options and experiment with various tactics and techniques. In case your business needs the help of an agency or paid tools, small alternative financing solutions can help you meet your requirements.
At the core of every successful business is a well-organized invoicing and payment system. Having one in place decreases the risk of late payments or non-paying clients-which eventually causes a substantial gap in your receivables. As a small business owner, your time is precious. Luckily, managing your finances in 2019 doesn’t take an accountant, and there are many cost productive options for you to choose from depending on volume. Here is our shortlist of the best invoicing software for small businesses, contractors, freelancers and entrepreneurs in 2019.
One of the best cloud solutions for small business that streamlines tracking and invoicing. It allows you to collect payment online, and it is packed with advanced analytic features. As far as invoicing: FreshBooks offers two basic invoice templates that are customizable. You can change the colors, font, and logo or header. You can add terms and notes to invoices. There’s also a convenient feature that sends automatic overdue payment reminders to your clients. Plus and Premium users can send reminders, charge late fees, and set recurring invoices. With Freshbooks, for $19.95/month, you get estimates, invoicing, expense recording, time tracking and reporting, but only for 25 clients.
Billy is a cloud-based accounting application for small businesses and freelancers in all industries. Primary features include billing, invoicing, quote management, contact management, accounting, expense management and financial reporting. Billy’s combination of tools and usability make it a good choice for freelancers and sole proprietors who need to track income and expenses and invoice customers.
Square Invoices are a great way to bill your customers without having to worry about entering your customer’s payment card information. Square Invoices is an invoice generation platform for businesses of all sizes. It allows users to send and track invoices for free and only applies charges after the users receive their customer’s payment.
QuickBooks is the leading accounting software for small businesses. Manage all your finances with either our licensed or online version. Instant access to customer, vendor and employee information. As a customer, you get free support and upgrades with an online version. It also comes with a 30-day free trial.
Hiveage helps small businesses and freelancers to send invoices and estimates, accept online payments, track time and expenses, and charge subscriptions. Users can send professional online invoices with custom branding and make it easy for clients to pay on time. It also lets users send unlimited invoices to an unlimited number of clients, and accept online payments using more than a dozen popular payment gateways including PayPal, Stripe and Braintree. Users can also send estimates/quotes, track time, expense and mileage, send recurring invoices and charge subscriptions automatically, and manage multiple businesses and teams with different levels of access with a single account.
This holistic, cloud-based asset is a robust and secure payment haven that automates the entire mass global payment processing operation, from onboarding to tax compliance. The app will streamline the way you make payments to customers, partners, vendors, and affiliates across an impressive base of 190 countries. In the meanwhile, it will ensure that all tax and regulatory requirements are met with minimal human intervention, and it will achieve your initial goal – enhancing vendor and customer payment experiences while remaining focused on quality.
Moon Invoice is unique and the first invoice app with iCloud Sync for iOS and Mac OS X for small businesses. It’s a simple slick and handing app that lets you generate, manage and track invoices on the go. It is a complete invoice solution that allows creating/editing/deleting invoices viewing/open/paid/overdue invoices and managing tax overheads in a simple way.
Invoicing software offers many benefits for busy small business owners. It’s crucial to track every activity, especially in our paperless world. We hope this list of resources helps to simplify and automate your billing processes.
From time to time, small business owners may experience a lag in payments from their customers. It’s one of the most common challenges for our clients. We speak to owners every day about how our funding can help them through obstacles they face. Are you dealing with gaps in receivables and need help floating expenses? We can help with our fast and easy small business funding solutions.
The automotive aftermarket industry in the US is expected to reach $316 Billion in 2020. A growing number of Americans are aware of the importance of preventive maintenance and scheduled servicing to maximize their vehicle’s lifetime value. And as a result, the average car in the US is 11.5 years old. Auto repair businesses are riding high on the increasing demand for their services.
But do you know how much your auto repair business is worth? Knowing how much your business is worth can help you get investors and bank loans. Let’s look at the most important metrics you should measure to value your auto repair business.
Periodic car count
Like how footfalls can be a useful metric to measure how well a retail store is performing, the number of vehicles coming into an auto repair business can be used to measure its performance. It indicates how busy your shop is, its growth potential and from where revenues are derived. Keep an exact count of the number of vehicles coming to your shop and these numbers can be used to generate weekly, monthly or other periodic reports.
Average repair order
The average repair order is how much your average customer pays for your services. Compare your shop’s average repair order with the industry standard to measure the effectiveness of your services. This can also give insights into how you can increase sales.
A business is more desirable when its revenues are high and has the potential for growth. Calculate how much revenue the auto repair business has brought in over the past couple of years. Has it been improving year on year? You can also compare your revenue with the industry standard through a business broker.
Labor costs make up a good portion of an auto repair business’s operating expenses and should be carefully monitored. Compare your shop’s ratio of labor costs to sales with the industry standard as it is essential for the valuation of your auto repair business.
Wage payment method
Are your technicians being paid hourly or as per a flat rate system? Auto repair shops following the flat rate system pay their technicians based on the national standard of the amount of time it should take to complete a particular task. For example, if the national standard for fixing a punctured tire is 20 minutes, the technician will be paid for 20 minutes regardless of whether the work was completed in 15 minutes or 45 minutes. This system can boost productivity if used correctly. As per the hourly wage payment system, technicians are paid for the number of hours that they actually work. The remuneration method you follow will impact the financial books and in turn, impact the overall worth of your auto repair business.
Cost of parts and equipment
The cost of automobile parts and repair equipment are to be carefully monitored because it has a direct impact on your business’ bottom line. While evaluating the worth of your auto repair business, look at the ratio of the costs of parts and equipment to revenue. Whether you have decided to buy or lease auto repair equipment should also be taken into consideration.
Owner’s discretionary income
Your shop’s net income might often be insufficient to measure its overall performance. A more accurate measure can be arrived at by performing a financial recast on the net income figure to calculate the owner’s discretionary income, which is a much better indication of the owner’s actual income.
The shop’s location
For any shop with a physical presence, location is one of the most important factors that influence the number of customers coming in. Your auto repair business is worth more if it is located in a place that makes it highly visible with a lot of drive-by traffic. Also, consider the price of real estate both (both present and future) in the area while calculating the worth of the business.
Number of lifts, bays and parking lots
The number of lifts, bays, and parking lots indicate the current and future capacity of the auto repair shop to accommodate vehicles. Having extra space means that your business is capable of meeting higher demand in the future. For example your shop’s growth potential will be limited without extra parking space. If you wish to immediately install extra lifts or similar equipment, you can always get automotive care business loans.
Age of the business
The longer you have been in business, the better. For example, a 20-year-old business is worth more than one that’s been around for 5 years. This is because people perceive older business to be better experts at their work than comparatively newer ones. The reputation that the business has built throughout this period is also important.
The effectiveness of your current marketing efforts plays a part in calculating how much your auto repair business is worth. If your advertisements are working and people (or vehicles) are coming into your shop, it is a good sign that business can be improved even more in the future. Consider this factor while valuing the worth of your auto repair business. Also, look at ways with which you can improve your auto repair sales during winter and other off-seasons.
It is just a matter of time before every business owner asks “How much is my business worth?”. It is an important question because it will have a profound impact on both the personal and professional aspects of the business owner’s life. Knowing the worth of your business provides a perspective from which you can plan the future course of action for the business.
Running a seamless small business requires a continuous flow of cash and its accurate accounting. Accounting plays a huge part in business, and it affects the profitability of your organization directly.
If you are a small business owner and if you are thinking that your accounting process need not be as good as the Fortune 500 companies, then you are wrong. In today’s fast-paced business environment, accounting is not just about debits and credits. It gives insights on your business that can be critical for its future decisions such as:
Finding the worth of each customer and the losses that might have incurred by spending more on pursuing the customers who don’t add value to the business.
Tracking and segregating expenses (increase/decrease) that come with the change of vendors, sellers, business processes, etc. depending on what works and what doesn’t for the business.
Understanding the business’s financial position and if needed look for a small term funding options that will be apt for the business.
Providing evidence in complying with law including departments like income tax, sales tax, customs and excise.
“ A study in 2018 found that 95% of the small finance business owners think their books are accurate while the experts believe otherwise. ”
Glitches in the financial records are ticking bombs that can blow up on your business overnight. Hence, it is essential to understand the importance of expert accounting, the challenges commonly faced by small businesses and the solutions for them.
This article will cover the accounting and invoicing challenges faced by small businesses and some expert advice to beat them.
Challenges of Accounting
1. Differentiate Personal and Official Accounts
You might be the owner of the business, but mixing up your personal and official accounts is not good for your financial books. Cleaner the financial records, the easier it is to account. If you have your family dinner bills included in your official statements, then chaos is not far away.
Including personal expenses into official records is one of the most common issues found in small businesses that can raise red flags among tax auditors, potential business partners, and their likes
2. Unforeseen Expenses
Small businesses bring unexpected expenses from directions you would have never anticipated. Insurance, professional fees, credit card fees, etc. are some of the general surprise expenses that small businesses face. Reduce the number of times you run into unforeseen expenses by creating meticulous budgets.
Cash flow can be tight on certain days and receiving a bill is the last thing you want at that time. Hence, ensure your accountant and you have left no loopholes in your budget plans.
3. Differences in Mode of Payment
Your accountant prefers accrual based payment, but your client prefers cash? There is always a difference in the preferred payment methods between accountants, business owners, and the clients and bringing in too many payment methods can create chaos.
Accrual-based payment is suitable for larger B2B businesses while owners of smaller B2C businesses prefer cash payments. It’s for you to decide which payment method suits your business and also enables seamless accounting.
4. Tax Returns Challenges
Businesses shut down after IRS and CRA penalties proving that tax filing can not be taken lightly. Almost 70% of the small business owners claim that they have filed their taxes accurately yet one-third of them think they are overpaying their taxes. Tax filing is not an easy task, and it can be stressful for business owners who are not great with financials. It is critical for you to have a small business accountant who takes care of your tax filing and also a tax software that can improve your accuracy.
5. Payroll Misses
Payroll time is the most dreaded time of the month for accountants and small business owners. Payrolls can be tricky and painstaking if you do not have these points in order:
A defined pay period.
A verified compensation and employee benefit plan.
Differentiation of a full-time employee and a contract employee.
Incorrect payments, improper records, exclusion of compensation or gifts, Form W-2 errors, etc are some of the common payrolls misses that every small business faces. Missing payrolls or creating payrolls with errors is not good for the business or its employees.
Challenges of Invoicing
Getting paid is the best part of any work be it working for an organization or owning a business. Sending out invoices on time and getting it cleared are important tasks that you should concentrate on.
Invoicing is a massive part of accounting that has challenges of its own. These challenges are even more for small businesses as you usually have only one accountant for all your accounting processes and this might affect the invoice’s accuracy and timeliness. But, the invoicing challenges have to be overcome quickly as small businesses thrive on immediate cash flow from their clients.
1. On-time Invoice Issuance
We all plan the invoices to go out on the assigned dates. But, is it possible to maintain this timeline in a small business environment where you and your accountant are swamped with work throughout the month? It is important to find tools and cloud computing software that can help you to prepare invoices and quickly send them out easily.
2. Overdue Invoice Follow-up
If you are the owner of a small business, you will understand how frustrating it is not to get cash in the expected time and to follow up on the invoice overdue. Many small businesses incur losses because of overdue invoices that have been missed or the business has given up after a number of follow-ups.
Keeping track of all your invoices and reminders for overdue is essential for your business but make sure the invoice amount is worth the effort.
3. Splitting payment across invoices
Payback time can be tricky. Clients may settle all your invoices at one go, and it will not be easy for the accountants to match the payments to the invoices. To avoid confusion, you can ask your clients to add invoice numbers to every payment they make. This simple exercise can help you find out which invoices have been cleared and which have not been.
4. Invoicing Accuracy
In accounting, accuracy is a factor that should be put on the pedestal. Carelessness can lead you to huge problems and losses. It should be made sure that all the invoices sent out are double checked and approved by you and your accountant. Inaccurate invoices might not be received well by your clients or vendors, and this might affect the business in the long term.
Accounting Best Practices
Challenges are always a part of the business. Accounting challenges might look like it impacts the business a bit more than the others because of the direct involvement of inflow and outflow of cash. On-point accounting is essential for you to avoid the dreaded chunks of last-minute work involved due to inefficient accounting from the very beginning.
There are some recommended best practices for accounting especially for small businesses that might be helpful for you.
Understand your business: Accounting tips for small business might be a little too general for you to implement. It is essential for you to understand your business, the sector it belongs to and other unique factors such as seasonality and then make your accounting decisions. The financial and accounting ideas for seasonal business might not work for an all-year business and similarly what works for you might not for another business in your own vertical. Hence a deep understanding of your business is a mandate.
Invest in the Best to get the Best: Your business might be small, and you might have enough financial knowledge to take care of your accounting. But, understand that your business needs the same accounting practices as that of multinational organisations. Invest in a specialized accountant and accounting software to see your accounting process vastly improve. If you are trying to curb your expenses by not hiring a professional accountant, then it is a huge mistake as you might be losing more money by not accounting correctly. If you have a money crunch, then consider taking a small business line of credit that can enable you to solve your cash problems.
Keep a Close Tab on your Receivables: There might be a lot of invoices sent out to many of your vendors and clients at different times of the month or year. Keeping a detailed track of these invoices are as important as sending them out. Take the help of accounting software like QuickBooks to make this process easier for your accountant. Running a small business is filled with tough choices and making your clients pay come what may is one of them. There is a risk of spoiling the relationship with them, but at the end of the day, it is essential to do what is best for your business.
Collect applicable taxes during payment: Include tax amounts during the time of invoicing to reduce the chances for errors. Longer the time between transaction and payment, the more the opportunity for discrepancies. Collecting tax during payment will also ensure, you are not responsible for a lump tax amount at the end of the year. You won’t have to go through tax penalties for a delayed tax settlement.
Keep Inventory Record: If your small business involves a lot of inventory, then the records for the same should be maintained meticulously. Detailed records of your inventory help in:
Maintaining clear accounts that can be recalled even after years
To avoid theft and misplacement of stock items
To prevent mismanagement of stock that causes loss to the business.
Focus on Monthly Profit sheet: We all know small businesses operate on quarterly, half-yearly or annual basis when it comes to checking their profitability. But, to keep track of your accounting process, check your monthly profits too. This will help you to get a deeper insight on your day to day processes that affect your profitability.
Your accounting process will also become transparent and detailed once you start taking notice of even the smallest transaction and its effect on your business.
Planning and maintaining the accounts for a small business can get complicated. A small mistake in data gathering, calculation or invoicing can impact your business at many levels. Like many other challenges, accounting and invoicing challenges can also be overcome with diligent planning and excellent execution.
“ Connecting with business owners in your field, attending seminars, workshops and actively participating in forums can help in understanding the challenges faced by your counterparts. ”
We always believe that prevention is better than cure, so don’t wait for accounting challenges to happen to your business. Act before it gets to you.
Creating a foolproof accounting and invoicing process is easier said than done. There might be many glitches on the way which might be even unique for your own business. Don’t lose your confidence when you come across such challenges or mistakes. Learn from the mistakes, seek the help of your mentors in the field and continuously modify your accounting methods.
Your business might be small and might not have more than ten employees now. But, setting the highest standard for your accounting affairs is vital to make it easy for you during expansion. There is one problem less when you are opening up your business for more people, and your accounting process is proficient enough to handle all the extra load.
As a small business, you might feel you can get away with bookkeeping on your own, but the tax filing or book closure can bring with it last-minute surprises. That is the time you will know how much information is still required to make your accounts close to perfect. Hence, we suggest that you start early, understand your strengths and weaknesses in the accounting and budgeting part of your business.
Professional help with accounting and invoicing nuances collected from research can help your business go a long way without any pitfalls.
For many small business owners the financial aspects of the business are things they’ve had to learn on the fly. Liquidity, solvency and other financial terms can be overwhelming and confusing especially when they are being addressed during times of financial hardship or stress. We’ve created this handy infographic to help individuals better understand what these ratios are and how to put them together.
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The Small Business’ Guide to Financial Ratios
What are financial ratios?
Financial ratios are tools that determine your small business’ financial health.
Activity Ratios: To determine how efficiently a company utilizes its assets
Inventory Turnover: How frequently inventory was replenished in a year
Receivables Turnover: How often the company collects and converts customers cash as receivables in a year
Payables Turnover: How quickly money is paid off to suppliers
Asset Turnover: How efficiently a company uses its assets to generate revenue
Liquidity Ratios: To measure a business’ ability to meet its short-term obligations
Current Ratio: Measures a company’s current assets against current liabilities
Quick Ratio: Measures the level of the most liquid current assets to cover liabilities
Cash Ratio: Measures the company’s total liquidity
Solvency Ratios: To measure a company’s ability to meet its long-term obligations
Debts-to-Assets Ratio: Measures assets financed by debts
Debt-to-Capital Ratio: Measures total capital financed by debts
Debt-to-Equity Ratio: Measures debt capital to equity capital
Profitability Ratios: To measure the ability of a business to earn an adequate return
Gross Profit Margin: Measures pricing decisions and product costs
Operating Profit Margins: Examines the relationship between sales and management-controlled costs
Net Profit Margin: Compares a company’s net income to its net revenue
Return on Assets (ROA): Measures how efficiently a company utilizes its assets