Whether your business is small or large, every business started somewhere, and chances are you can find a dirty garage, or stuffy bedroom office somewhere in every business origin story.
Starting a business can be daunting if you’ve never done it before. Here’s where I hope this article helps to give you a few tips on what your initial steps can and should be.
To start, let’s take a little walk down memory lane.
If you lived and worked through the economic turn in 2008/09, sadly, there’s a good chance that, here in Alberta, you were an employee that lost their job, or an employer that had to lay everyone off, if not close the doors on your business altogether. And since this great province was built on (and is still largely based on) small-to-medium sized businesses, that meant a higher percentage of bankruptcies in that period than anyone could have ever expected, and these were affecting families in a very real and close-knit way. Families that supported not only their own children, but the children of their employees.
After spending the next decade building ourselves out of that disaster, fast forward to early 2020. According to ic.gc.ca, in the month of March 2020, there were a total of 5563 bankruptcies completed and another 11684 that were proposed to be completed later, bringing a staggering overall total to 17,247 personal bankruptcies, or initiates, that occurred in March 2020 alone!
Compare that to just 5 years previous when those people who’d managed to hold on in 2008/09 finally succumbed and we saw an increase of over 16% in bankruptcies in the same month, and yet still that overall total was only 8594.
How does this relate to short-term commercial lending?
Well, believe it or not, the insurgence of short-term commercial lending with no credit checks, like the ones we offer here, fueled the seedling growth of many new companies started by entrepreneurs who refuse to quit despite what has time and time again felt like impossible odds in their way.
But that’s the type of people this province was built on, was it not? (I feel a flag-waving moment coming on!)
When traditional lenders refuse to help because of a score card, reflecting nothing of the hard work and years of dedication of these entrepreneurs to build our towns and cities, enter short-term lenders.
What does that mean for the business owner today?
Today, after the crazy couple of years we have experienced, we have seen another great resurgence of small businesses and contractors who are themselves endeavouring to bridge the gap from A to B, keeping employees paid, keeping food on their tables, and working day and night to rise again.
Short-term lending solutions can help you to quickly raise the capital you need to supply your start up with inventory or hire new employees while they prove themselves through probationary periods, or even buy or repair new equipment in a hurry.
Our understanding and professional lending agents work with you to devise a repayment plan that fits your budget and can ensure you receive your financing immediately, with no credit checks and no big bank red tape.
Tips for ensuring success during your short-term lending period.
- Know and understand your complete budget. Just like setting up a personal budget, businesses must also have a solid understanding of their total budget. You really need to dig into those banking statements and find where every automatic payment is, and what dollars go where. (Don’t forget things like software licenses, IT support, cell phone plans, and courier services.)
- Project your cash flow. Every successful business owner must keep one eye on today and one eye on tomorrow. It is the only way to ensure that you are not caught off guard by surprise expenses. When you learn to project your cash flow, you take into consideration monthly sales versus monthly cash flow, and unless you’re a brick-and-mortar store, your cash flow is usually delayed partially if not entirely from month to month with deposits and accounts owing.
- Remember to properly allocate your taxes. This includes your GST and an accumulating budget for corporate tax, in case you report a profit at your fiscal year end. Falling behind in taxes is one very quick way to have ol’ CRA send the Audit Man out to you, and no one wants that. One year can back up into two years very quickly if you’re not careful.
- Remember to pay yourself. As a business owner, we must always remember to keep a third eye (don’t try to figure out the math) on your personal home budget as well. If your company is not making ends meet at home, you may be causing more stress on yourself and your family than the job is worth. You may find that you need to sacrifice some things at home so that your personal draw from the company is less, so that the company has more to go around. At least for a while.
- And finally, hire a professional bookkeeper (or marry one!). A good accountant is worth their weight in gold, but they are expensive and not usually something you want to pay regularly. However, find an excellent and reliable bookkeeper and they can make your life so much easier from day to day. In addition to being able to report at a glance your financial health, they can properly and clearly advise you of what your short-term loan repayment budget can be and for how long. Not to mention saving your higher-priced accountant a ton of time when year end rolls around when they don’t have to try to figure out daily logs and billing receipts.
For more information on using short term financing for your business, contact us today. For immediate assistance, apply online today.
