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May 3, 2023 at 12:39 pm in reply to: Hi there, I’m an entrepreneur running a small business and I’m having trouble managing my cash flow efficiently. Can you share some practical tips and best practices for effective cash flow management that I can implement to ensure the success of my small business? #1280Richard BrodyParticipant
Here are some practical tips for effective cash flow management that entrepreneurs can implement to ensure the success of their business:
1. Simplify billing and invoicing processes to encourage timely payments and reduce late payments. This can include adding one-click payment links, offering alternative payment options, and updating payment terms to include incentives for early payments and penalties for late payments.
2. Create a cash flow forecast using a specialized accounting tool or a manual Excel or Google Sheets document to estimate monthly inflows and outflows. This helps identify potential cash flow problems and gauge the impact of changes in income or outgoings.
3. Build up cash reserves by setting aside money in a separate, interest-bearing account. Aim to set aside around 2–6 months of essential operating costs to protect your business from poor cash flow management.
4. Negotiate with creditors by renegotiating existing contracts, paying off debt with smaller but more frequent payments, negotiating reduced interest rates, bartering goods and services, or negotiating payment terms for large orders.
By following these steps and seeking professional advice or using specialized tools to streamline the process, entrepreneurs can take control of their cash flow and prevent strike-offs.
- This reply was modified 1 year ago by OnPage.
Richard BrodyParticipantSmall business investment companies (SBICs) provide small businesses with debt financing and equity, filling the role often taken by venture capital firms. A small business investment company is privately owned and licensed by the Small Business Administration (SBA). If an entrepreneur is seeking startup capital then an SBIC will often be the simplest and most effective means of obtaining the funds needed. Loan guarantees provided by the SBA enable small business investment companies to borrow at favorable rates. An overarching rule is that 75% of the capital they invest has to be invested in small businesses in the US, and for these purposes a US small business is defined as follows:
-The business has no more than 49% of the workforce based overseas
-The business has a net worth of less than $19.5 million
-The business has averaged a net income of less than $6.5 million over the previous two years
-In addition, at least 25% of the capital invested by the SBIC has to go into smaller enterprises in the US, defined as follows:
-The enterprise has no more than 49% of the workforce based overseas
-The enterprise has a net worth of less than $6 million
-The enterprise has averaged a net income of less than $2 million over the previous two yearsJanuary 4, 2023 at 1:50 pm in reply to: When the economy takes a downturn, how might fintech aid small and medium-sized enterprises? #1071Richard BrodyParticipantIn response, FinTechs (financial technology companies) have developed novel approaches to these problems. Here are five ways in which they might benefit American banks and small and medium-sized enterprises:
1. Crowdfunding platforms, made possible by advances in financial technology, are now a serious option for small and medium-sized enterprises in need of capital.
2. Financial technologies help small and medium-sized enterprises (SMEs) expand into new markets, where they may boost both revenue and output.
3. FinTech firms collect valuable information about their customers.
4. FinTechs have been instrumental in creating innovative, low-cost approaches for financial institutions to assess credit risk.
5. More adaptable and efficient liquidity provision is made possible by FinTechs.December 7, 2022 at 1:13 pm in reply to: What does “SME IPO” stand for? What are the prerequisites for initial public offering for a small business? #1038Richard BrodyParticipantA small or medium-sized enterprise IPO refers to the method through which a company raises money from the public. For larger corporations, the initial public offering (IPO) on the mainline is the standard route to public share sale.
Here, an organization’s stock is listed on a secondary market instead of the primary market where initial public offerings (IPOs) is typically listed. These smaller firms’ IPOs are subject to fewer laws and restrictions than those of larger corporations. According to the regulations:-
– The paid-up capital of the company must be under 25 crores.
The company’s net tangible assets need to amount to Rs. 1.5 crores.
– A corporate website is necessary.
– The company should encourage Demat trading and reach an agreement with both depositories.
After applying for a stock offering, there should be no change in the company’s promoters for at least a year.
– The compnay must have come into being under The Companies Act of 1956. -
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