SMALL BUSINESS = HUGE FINANCIAL HEADACHES
by Marc Joseph
You have just opened your business and you are very proud. Only 10% of entrepreneurs who say they want to go into business for themselves actually have the guts to follow through and open the business. There are all kinds of reasons why the 90% don’t make it to the goal line. The number one reason is they can’t secure the funding.
Cash to open businesses usually comes from several different sources. Self-funding is the most common. You may have been working overtime in your current job or had a couple of jobs to stash away a few bucks. You may have been able to save money in a 401K and felt it was time to put it to better use. At one time before this great recession, many people had equity in their homes to borrow against.
Using the credit on your credit cards is another scarier way to raise cash. Borrowing from family or friends is also used frequently. If there is any way to avoid using either one of these methods, for your long term sanity, please circumvent them. Credit card interest rates will haunt you for years to come and a relative you can’t pay back will haunt you for the rest of your life.
Getting a loan from your local bank plays out well in movies, but in today’s world where so many banks went under during the great recession, actually getting a bank to show an interest in what you do is another long shot.
In the headlines we read about these successful venture capital groups financing all these large companies, but in reality you really don’t see them on Main Street America. Many communities do have Angel Investors, which are usually people who have made it big and are looking to help out other entrepreneurs. Like the TV Show “Shark Tank”, they usually want a nice chunk of your business for the funding.
But I regress talking about all the financial reasons why entrepreneurs can’t get started. If your business is open now, you have figured out how to fund it. The key is once you are up and running, how do you keep the cash flow going so you can continue to keep the lights on and buy products to sell? Ideally, every business should establish a line of credit with their local bank to help with the seasonality of the ups and downs of sales ebbs. But most businesses have the same problem when they were trying to get funding to open in the first place – banks just aren’t as generous as they once were.
That is one reason why DollarDays worked so hard to establish a strategic partnership with First Bankcard to help offer credit through the new DollarDays Business Edition Visa card to the 23 million small business owners throughout the country. Having a credit card like this enables businesses to better manage their cash flow throughout the year and rewards the businesses for all of their purchases. Small businesses can now earn reward points on all of their DollarDays purchases, as well as earn three points for each dollar spent on certain types of qualifying business expenses important to small businesses. The rewards points can be redeemed as cash back as a credit to the account, for travel, merchandise or gift cards. Here is a link to this valuable financial solution.
Funding your business from the beginning through the day in day out sales has always been the most challenging part of running a business. Just look at the issues our government has been trying to overcome the last several years; and if we ran our business like they do, we would all be out of business. If you have deep enough personal pockets to pay your bills during the lean times; than more power to you. But since most of us don’t have this luxury; finding the right partners to fund you during the down times is crucial to long term success.