Min-Maxing Your Finances

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. A major part of your business is budgeting and controlling costs. Doing so will ensure your business’s success. The following contributed post is entitled, Min-Maxing Your Finances.

* * *

When it comes to looking after your business, you need to be very clear about what is going in and what is coming out. Where your money is stashed, and how you can make the most of it.

Photo by Sharon McCutcheon on Unsplash

It is harder in the early days to truly see what is coming your way. But, that is why you need to really lay that business plan down and make sure your cash flow forecast is as tight as possible.

Here are some extra tips to help you make the most of your money when it really matters.

Accounting
It would do you well to hire a bookkeeper and accountant. You can, of course, get yourself some really good accounting software and so it yourself but that will only help you out for so long. You can weigh up the costs in advance and make your mind up based on the money that you have available at the moment.

Costs
No matter what it is, if you can get it cheaper – for the same quality, then do it. For example, if you know that you need a medical refrigerator, carpeting in your office, a new computer – anything. Do your research and make sure that you are going to get the cheapest that you can get. And whenever possible, you are going to need to haggle on the extras. More extended warranty, free delivery, and installation – always push for more.

Projections
Having very clear financial projections will be you are keeping a closer eye on where your money is and where it should be. It will have you anticipate where your significant costs are going to be leaving your accounts and to make sure you have a buffer for them,

Invoicing
It is so tempting to let invoicing slide. A friend of a friend purchased 6 of something, but can only pay for 2 and will give you the rest of the cash later on. You can’t run a business on a hope and a maybe. Here are some tips for your invoicing –

● Send out invoices as soon as possible
● Have a definite date that the money is due by
● Include your terms and conditions
● Have a late fee applicable after the payment date has passed
● Follow up after you send an invoice and mention you have submitted it – could they check it has been received?
● Keep your references in good order.

Business Banking
If you use your personal account for everything, it can get very messy, very quickly. It is better that you open a business bank account, so you can keep track of all of your business transactions. It is also better for you come tax time as everything can be added up very easily. You will also have a clearer idea of what your profit really is.

Pay
You should always pay yourself first. If you aren’t paying yourself first, and instead you are paying all the debts and services for your business, your profit is not your actual profit. You are supposed to be able to make a living from your company. Of course, you aren’t going to be taking a full wage in the early days, but enough to cover your personal expenses is going to be ideal.

Thrifty
There is a temptation that because you own a business, you can then act far too big for your boots. Renting expensive cars, hotel rooms, and very lovely meals – all to impress potential clients. But the fact is this will all still need to be paid for, and it is going to land on your shoulders. It is much smarter to take care of the pennies and cents at all times. Set your salary as low as you can, and you will find that the lean months pay off in the future.

Traveling
For some reason, so many freelancers and small business owners want to travel as much as they can. Which is great – the world is big and beautiful, but for those few thousand dollars on flights – you can have a skype call for free. Most of the time, it is not really cost-efficient or required to have a face to face meeting. So try and hold off on them for as long as possible.

Marketing
For as long as you can manage it, do your own marketing. There will come a time that you are going to want to work with another company but in the meantime – you will learn so much about your company, clients and reach that you can remain relatively hands-on and involved. As well as having a really great set of marketing skills and experience.

Rent or Buy
If you don’t need to buy a giant piece of machinery or a building, then simply don’t. In the early days of business throwing, stacks of cash at long term commitments can backfire massively if anything happens. So leasing equipment can help you avoid maintenance costs, and depending on the item, you might get the opportunity to get a new one every 12 months – which is pretty sweet.

Loans
If you need a business loan, then take one. You will be able to see what your finances are doing long before it happens. And if you know that there will be some rough patches coming up, you’ll need to have some bounce. If you have space to use your own capital and savings, then try to do that too. The key is to know what is a sinking ship, and what is a small blip.

Eyes wide open
When it comes to money, far too many people try to duck the situation and refuse to deal with cash when they have the opportunity – which is sad really, because many a small business could have been saved if people paid attention to the small change as much as they do the big numbers. Minimize your expenses and maximize your income by making smart decisions.

4 Tactics That Are Guaranteed To Lower The Running Costs Of Your Business!

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. A key to successfully running a business is keeping costs low. Doing so will ensure that your business will survive and thrive. The following contributed post is entitled, 4 Tactics That Are Guaranteed To Lower The Running Costs Of Your Business!

* * *

How much it costs you to run your business matters. After all, its money that comes out of your profits! That is why it is so vital that you keep the running costs of your business as low as possible. Something you can get some sound advice on in my post below.

Work from home

Image

Working from home doesn’t just save you money, you can put your feet up as well!

First of all, you can save a whole heap of money by choosing to run your business from your very own home, rather than setting up formal premises. After all, you won’t have to pay for a lease or pay separately for utilities either, as this will be included in your home bill.

Happily, there is a vast range of business that can be run very efficiently from a home office. These include creative enterprises such as graphic design, illustration, and writing. Although you can be equally successful when working from home with more entrepreneurial options like reselling and setting up your own online store as well. Something that makes the lower-cost work from home option a smart move for many businesses.

Shop around for the lowest priced supplies

Next, if you are looking to reduce the running cost of your business, then you absolutely need to look at how much you are spending on office supplies. After all, even if you do choose to work from home, you will still need certain things to ensure you can complete the tasks you have.

To that end, shopping around for office basics like ink cartridges, paper, post-it notes, and folders at the lowest price you can find is crucial. In fact, by saving pence on a single unit of supplies for the office, you can actually accrue a considerable saving over just a year! Something that will ensure you have fewer cost to remove from your profits.

Understand your tax forms

No one is too keen on filling in tax forms for their business. However, doing so in the correct way can actually save you a lot of money. In fact, there are two ways that this can happen. The first is that if you correctly fill in your tax forms and return them on time, you will avoid having to pay a fine.

Secondly, many costs, including supplies, can be claimed on your tax form. Something that means they get taken off the final amount you will be taxed for. In fact, if you are working at home, you can even claim for part of your utility bills, thus saving your business even more money!

Outsource on demand

While it may be tempting to employ a large workforce, so every possible need is catered for, there is a more cost-efficient way of doing things. Its to outsource tasks you don’t specialize in or do not have time to complete, to someone else. This being an option that while costing money in the short term should save you over the long haul because you won’t have to pay out a salary to so many people.

Of course, fewer salary payments, and a reduction in the other running costs mentioned above means more profit for your business. Therefore you really can’t afford to ignore this guaranteed money-saving advice!

Hidden Costs For Small Business Owners and How To Avoid Them

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. Small business owners must be aware of cash flow and hidden costs. Control of these two things are life and death for any business. The following contributed post is thus entitled, Hidden Costs For Small Business Owners and How To Avoid Them.

* * *

When you start out with a plan to create and build your own business, you will get a business plan and a budget together. In fact, it is usually so precise and specific that you will have all of your costs mapped out for quite a while and know exactly what needs to be spent where, and what you need to be selling in order to cover any costs. But the reality is, when it actually comes to running your business, there are many hidden costs that arise that you can forget about.

Think about maintenance of equipment, replacing broken chairs in an office, or adding insurance; it all adds up, and may not be what you are initially thinking about when it comes to making your business plan. But if theses costs get out of control, then it can be damaging. So with that in mind, here are some of the things that you can be thinking about and doing, to make sure that you are able to reduce your ‘hidden’ costs and stick to the budget that you have planned.

image

Rent Equipment

When you rent a home, you pay for the home and essentially cover the mortgage, but you are not responsible for any of the things that might stop working, like the washing machine or dishwasher, for example. The same goes for when you rent equipment. As long as you have not purposely damaged any items, any repairs that need to be done, tend to be covered by the person that you are renting off. Take rental boilers, for example, they can be pricey to buy and repair yourself. Which is why renting could be better, so that you don’t have the hidden cost of having to pay for it to be fixed, should your boiler break.

Strict Expense Policy

If you have employees that are going to need some expenses paid for business related work, such as travel and so on, make sure that you have a clear and strict expense policy when it comes to what you do or don’t allow. If you keep the policy quite general, then you could be paying for expenses that aren’t really a legitimate business expense. So that is certainly something to be thinking about, as it can add up, especially if you have employees expensing a lot of items.

Negotiate

There will be plenty of deals and contracts that you will have as a small business owner over time. But if you just take things at face value, and don’t look into the contracts or even try to negotiate things on your contract, then you can be missing out. You can reduce some of your necessary costs through negotiating; it is always worth a try to ask. Otherwise, these kinds of thing can quite quickly spiral out of control, especially when things auto-renew before you’ve had to chance to ask for money off because of repeat custom.

Your goal should be to swim and get this business going, not be drowning in hidden costs. So take control and you can have business success.

Costs You’ll Need To Consider When Buying A Home in 2019

A key focus of my blog is Financial Literacy/Money. A key component for wealth-building for most people is the purchase of a home. The more research done ahead of the better. Markets are different as are years. The following contributed post is thus entitled, Costs You’ll Need To Consider When Buying A Home in 2019.

* * *

Will 2019 bring a big purchase for you? For some readers this will be the year in which all of your scrimping and saving pay off and you finally get a foot on the property ladder. It may be the year in which you upsize your home to accommodate a new addition to the family. Or it may even be the year in which you get your first ever investment property and begin to earn money as a landlord. Whatever your reason to buy, 2019 looks to be a promising year for property. Interest rates have been hiked multiple times throughout 2018 (more on those later) but they now show signs of stabilizing. Lawrence Yun; chief economist of the National Association of Realtors told the Washington Post;

Image by Pixabay

““The forecast for home sales will be very boring — meaning stable” although Yun was quick to note, “Home-price appreciation will slow down… The days of easy price gains are coming to an end, but prices will continue to rise.”

While 2019 seems as safe a time as any to invest in property, buyers will need to familiarize themselves with some of the costs incurred when buying real estate, especially if they are doing so for the very first time.

Interest rates

After years of stagnation, interest rates have risen sharply with no less than 3 interest rate hikes from The Federal Reserve in 2018. While rising interest rates are nowhere near bad enough to result in negative equity or chase buyers away from the market in their drives, but it is significant enough to add a little extra onto your monthly mortgage repayments.

The difference will depend on the size of the property you wish to buy. It could be as little as $50 or it could be a couple of hundred dollars.

Surveys

There are a number of different types of surveying which the property may require and it’s up to you to find a good engineer to carry them out. The property may well be subject to;

• ALTA / Land Title surveys (usually required by mortgage lenders)
• Surveyor’s real property reports
• Property boundary surveys
• Easement surveys (a survey that determines where an outside agency, for example, a utility company has the right of access to a portion of your property to carry out necessary maintenance or repairs.

Realtor’s costs

Unfortunately, realtors don’t like to work for free. Between your agent and the seller’s agent you can expect to pay around 6% of the value of the property in realtor’s fees.

Property taxes

They’re the only thing in life that’s certain other than… Wel, you know!

Closing costs

Aside from the surveyor’s fee you will likely also have to pay a range of closing costs to cover the legalities of conveying the property from the seller’s ownership to yours. These may include;

• Appraisal / valuation fees
• Wire transfer fees
• Underwriting and origination fees
• Document prep fee
• Credit report charges
• Title insurance: This protects you in the event that the seller doesn’t actually have full deed and authority to the property.
• Recording fees.

Miscellaneous running costs

Finally, you’ll need to account for all the extra miscellaneous costs that come with running your new home. These can quickly add up even if you live a frugal life. For example, if you’re used to an apartment, you may find that a house costs more to heat, water and tax.

Still, so long as you’ve taken the time to familiarize yourself with the inherent costs of buying real estate in this day and age, there’s no reason why you can’t enjoy the home of your dreams in 2019!

Financial Decisions That’ll Help You Down The Line

Two of the focuses of my blog are Financial Literacy and Money. Our everyday behaviors and decisions impact our where we end up financially in the future. The following contributed post is thus entitled; Financial Decisions That’ll Help You Down The Line.

* * *

Picture Source

When it comes to your personal finances, you need to think beyond your current situation. It’s essential to cover your basic costs, but you need to do so in a well-calculated manner so as to ensure that you’ve got savings for the future. In this article, we’ll discuss that point along with other helpful pieces of financial advice. If you want to protect your money then here are some financial decisions you could make right now to help you further down the line.

Investing some of your earnings.
The first financial decision you could make to help yourself down the line is to invest some of your earnings. This is something you should do on a continuous basis if you want to increase your wealth; it’ll bring you additional forms of income on top of your existing salary. And there are plenty of different investment routes you can take as a beginner. You might want to do some research on getting started in the property market. With the correct guidance and management advice, you could start buying properties to lease them out (that’d bring you a nice monthly income). You could even buy properties to fix them up and sell them at an increased value.

Of course, there are plenty of other ways to invest your earnings, too. Getting involved with trading can be very profitable if you do your research and learn how to monitor market trends carefully. You might want to consider spread betting over traditional trading methods. Earning tax-free profits is just one of many reasons to trade this way. Investing wisely is the type of financial decision that could really help you down the line. You’ll be able to start building up some savings for the future.

Creating an emergency fund.
Another financial decision that will help you down the line is creating an emergency fund. We all face unexpected costs at different points in life, so it’s important to have a backup plan in place for just such occasions. Your budget can only account for regular and predictable expenses, but you should also set aside a little bit of money on a regular basis for emergency costs. For instance, your house might need repairs after a natural disaster, or you might need emergency financial support if you leave one job and start searching for another. Creating a backup fund now could really help you further down the line. You don’t want to dip into your bank account for emergency costs and find yourself low on funds for necessities.

Spending your money sensibly.
This final suggestion is possibly the most important. If you want to improve your financial future then you should simply improve your financial present. By making a proper budget, you’ll be able to start tracking your expenditures accurately and making smarter decisions with your money. Calculate the cost of your essentials, and figure out how much income you need to devote to those necessary expenses. If you barely have any remaining funds then you could start reducing your basic costs in smart ways. For instance, you could save money on groceries by using coupons and start using price comparison sites to search for better deals from energy providers. You could reduce your monthly expenses if you did a little research. And it’ll benefit you in the future if you have more money to set aside for your savings.