3 Tips for Startups to Achieve Financial Success

Guest post by Courteney Reed, Financial Industry Analyst at Credit Card Insider

Successfully growing a business is no small feat. It takes a great team, determination, and often a decent helping of luck. With so many things to contemplate, it is often hard to find a place to start seriously investing in your startup’s growth. Here are three suggestions:  

Separate your business and personal finances

As a business owner, you need to apply for an employer identification number (EIN) via the IRS website. This allows your business to build a credit profile and maintain a record of business transactions. Until you file your business as a separate legal entity, you could be held personally liable for all financial activities.

The sooner you establish your credit profile the sooner your business begins to build credit. Opening a business credit card and using it responsibly can help you track your expenses and profits, build your credit scores, and simplify tax filings. Conversely, mixing business and personal expenses on a personal credit card can quickly eat up your credit limit, causing a drop in credit scores and making it harder to apply for personal credit, such as car loans or mortgages.  

Consider these advantages of using a business credit card:

  • Separation of business and personal expenses
  • Higher credit limits than personal cards
  • Rewards like cash back, miles, points, and warranties
  • Potential to increase business credit scores for better business loan terms and high-tier business credit card rewards
  • Better cash flow management, allowing 20-30 days to pay business costs without interest

Finance To Fit Your Needs

Successful businesses often use outside funding to plan ahead for their business needs. Here are three tried and true options worth considering:

Small Business Loans

Small business loans provide access to capital before revenue streams begin flowing. Plus, by successfully managing a business loan, you’re increasing the potential of securing bigger business financing when it’s time to expand your company. Finding the right business loan may take time but you’ll have working capital you need to get off the ground.

Venture Capital Funding

Financing investors provide funding to startup companies that are believed to have long-term growth potential. This type of funding usually comes from wealthy investors, investment banks, and other investment companies, and ownership of a business is divided between the investors and the proprietors of the business. There are different platforms that provide a database of different investors looking to invest in new companies or promising business ideas, making it easier to find investors interested in your market niche.

Alternative Lenders

Alternative business funding is capital offered to small business owners by “non-bank” providers. Alternative lenders are particularly attractive to small business owners who don’t have an established business credit profile. 

Most lenders have their applications available online, making the approval a quick process. Their interest rates are typically higher, but if you need money in a timely manner, alternative lending might be the way to go. Typically lenders extend loan repayments from 6 months to a year, but depending on the type of loan you choose, you may not have to pay the money back until you actually draw from the provided funds.  

Leverage Software to Increase Efficiency and Reduce Costs

After getting approved for more financing, you’ll need to stay on top of all the financial details. The right software can help streamline multiple tasks and increase your team’s performance and overall efficiency. Here are three tools for keeping your finances in order:  

Effortless HR

Payroll management is often a burdensome task, especially as your business grows in manpower. Effortless HR is an HR tool that enables employees to self-manage their payroll preferences, time off, and access any other necessary information without the assistance of an HR employee.

Quickbooks for Finances

Quickbooks is simple to use and helps you keep track of all basic business transactions. Plus, they regularly roll out updates to their online platform for flexible financial management.

Dropbox

A cloud storage solution is a must-have for organizing and sharing important files. Depending on your specific needs, Dropbox contains tools that benefit secure record keeping and flexible collaboration.

Conclusion

The path to growing a successful business is not a concrete one. However, these three tips can begin to increase your financial literacy and day to day expense management in a simpler and more productive way. Seriously considering these recommendations will give your business a better chance of success and expansion in the future.

Automation Tools For Your Small Business

By Zachary Rimlinger Updated on August 9, 2018

The rapid pace at which both business and technology are developing means that there are a variety of tools for doing away with mundane tasks in order to focus on more integral work. Oftentimes, and especially for small companies, your business can lean on this kind of technology to keep operating costs low. 

Not only do automation tools eliminate repetitive work and enable you to keep a lean team, but incorporating such technology can also help you take care of your existing staff. For those team members who crave opportunities to engage in more challenging or soul-satisfying tasks, automation frees time from their schedules to do just that. There are few better methods with which to improve employee morale and job satisfaction, which will always circle back around to help your business thrive and evolve.

Here’s a quick list of six free or low-cost automation technologies that can help automate workflows for a range of your business operations.

One Stop Shop  

Zapier is workflow automation king. Amongst a variety of uses, it can help you automate the receiving of data, file management, and all sorts of notifications by integrating with your preferred apps. For example, if an email hits your work inbox, Zapier can send a backup to your Google Drive, or Dropbox and can alert you on Trello, Slack, or another project management app. Or if you’re in the e-commerce business and use an email service like MailChimp, you can set up a “Zap” to automatically add new customers as contacts in an email list. Browse these 222 Zap ideas and you’ll quickly see how Zapier can optimize some of your existing workflows.

Scheduling

Calendly removes all the back-and-forth of setting up meetings by automating the scheduling process. Calendly makes invitees aware of your availability and lets them choose their desired time slot. Calendly also syncs with apps such as Slack, MailChimp, and Stripe, so be sure to check out uses that would be beneficial to your specific business. Whether its scheduling prospect calls or one-on-one meetings with your team members, including a link to your Calendly in your emails or email footer will save you many unnecessary exchanges.

Online HR Services

Onboarding new employees and fulfilling payroll can be tedious are time-consuming processes, to say the least. Social security numbers, addresses, direct deposit accounts, taxes—there is the ever-present danger of human error that comes with manual entry. But with Gusto, simply invite employees to sign up after setting up your company’s policies. More than helping you fulfill payroll, Gusto is a low-cost solution for centralizing and managing HR function such as approving time off, enrolling in company benefits, sending monthly check-in surveys to your team, and even generating reports that can give you an overview of your business.  

Email Management

It’s called SaneBox for a reason: this automation tool organizes your email stream to preserve a little more of your sanity. SaneBox analyzes your mailbox and email history to identify unimportant emails, which are then filtered into a single folder for later review, keeping your inbox focused on the urgent and important. You also receive a daily SaneBox Digest to bulk-process unimportant emails in less time. 

Customer Support

Support service requests can be mind-numbingly repetitive. Luckily for your support staff, there is Workfusion Chatbots. Through artificial intelligence, Chatbots takes over repeat inquiries from your support personnel and engages with the customer in human-sounding conversation. Workfusion guarantees a 50% reduction in manual service effort, making Chatbot a powerful complement to customer service staff.

Social Media Marketing

Let’s say you also want to share curated content that would add real value to your followers’ lives.  DrumUp has you covered with the latest in social media optimization. Rather than spend your time scouring the web, Facebook, or Twitter feeds for articles to keep your audience engaged, DrumUp’s algorithm automates it for you across a wealth of social media platforms. You cut down the time it takes to manage your presence by up to 90% while barely making a dent in your budget.

Conclusion

The benefits of office automation software for your business are manifold. For starters, the use of automation increases your staff’s dexterity with tech tools, potentially reducing the onboarding time with software and applications you adopt as you grow your business. If you can get your employees plugged into new software sooner, they’ll be more receptive and more adept the next time.

If you’re ready to take the next step, read these tips for successfully pinpointing what areas of your business are ripe for automation and how to get your team to play along.  

How to Introduce Automation Into Your Small Business (And Make It Stick)

By Laura Lopez on May 10, 2018 

Previously, we’ve shared specific tools that accountants and small businesses can use to automate their workflows. By automating core accounting tasks, scheduling, and more, businesses across all industries can redirect staff time away from manually-intensive projects while simultaneously saving money. This is especially true for small- to mid-sized companies that are often strapped for resources at the same time they’re striving for growth. 

By making employees’ jobs faster and easier, a practice can accelerate growth through increased efficiency and strengthen its overall service. But how do you go about implementing automated processes? Don’t throw your staff into the deep end and expect them to swim. Below are some tips on how to ease into the practice of automation to make it stick. 

Establish a plan and contingencies

Before anything else, practices need a plan that spells out their end goals. For example, automating the backup of email attachments into Dropbox with a program like Zapier may be convenient, but a business must also ask related questions, such as how their team’s ability to easily retrieve the attachments will be affected? Will everyone have access or only a single point person? Will this make collaboration between teams smoother? And so on. Failure to establish a roadmap will likely result in miscommunication and crossed wires.

Identify areas of biggest need

One of the easiest ways to begin automating a practice is by identifying the exact areas within the company that need it the most. Quite simply, pay attention to constant frustrations. By first plugging the biggest holes in workflow, firms can alleviate their employees’ collective stress, increasing the chances of getting everyone on the automation train. And you’ll help your business run more efficiently, too.

Automate easier processes first

On the flip side, if a business is fortunate enough to not have gaping operational holes that demand immediate attention, they can start their automation journey by attacking easier processes first. Returning to the example above, backing up email attachments is one of the simplest activities to automate. Following this route will make the task of introducing further automation into the practice less cumbersome and easier for everyone to incrementally grasp.

Start with a small test team

At the end of the day, you know your team best. If you anticipate that your automation roll-out might be complex or come with a steep learning curve, there’s no need to bog down the entire company all at once. Instead, form a small team who can test the software in advance.  

Project management automation software like Basecamp, for instance, is ideal for experimenting with smaller teams. By test driving it with only a few people, you can determine whether it would be a good fit for a particular department or the rest of your company. If this small subset feels like the software is clunky, unintuitive, or not user-friendly enough, then you’ve just saved time and effort that would go into rolling the program out to the rest of the company. Plus, if the test users prefer the software, they’re better able to provide support to their coworkers as software is adopted.

Evaluate process efficiency

Owners do themselves and their firms a big favor by evaluating the individual processes they wish to automate before they set forth in that direction. This involves raking over the process(es) with a fine-toothed comb to pinpoint flaws. Multi-directional feedback is key. Seek input from your employees, then, devise a process map to help every worker visualize the various processes in your company and highlights which areas need attention. If you skip this step and blindly press on, all the automated software in the world won’t fix your processes’ underlying inefficiencies. By taking stock of your business’s inefficiencies and initiating steps to correct them before committing to new software, you can reduce the risk of flushing money down the drain when you try and switch over to a new tool.

Conclusion

At its core, automation is about enabling and optimizing professionals’ work. However, automation tools can do harm as readily as they can help. The fault is not in the programs but in how they are used or if they “fit”. Companies that don’t take the time to understand which of their processes to automate, or who use software as a bandage for underlying dysfunctions in their processes, will likely decrease their efficiency. But by following the above tips on how to wisely use automation to optimize existing practices, owners can pave the way for fewer speed bumps and more growth. 

Rise of the CFO-for-Hire

By Eric Romoff on April 18, 2018

Increasingly, companies are outsourcing the role of Chief Financial Officer (CFO), also known as CFOs-for-hire, and interim, or contractual, CFOs. It may seem odd that companies, from large firms down to small- and medium-sized businesses, would contract out an executive position. But understanding the challenges and opportunities this trend presents can help you evaluate potential payoffs for your business. 

Benefits

  • Lower costs. With permanent employees, benefits, opportunities for training and career advancement, and other aspects for retainment should be top-of-mind considerations. Having an outsourced CFO, however, sidesteps some of these factors because the position is either temporary or such logistics are handled by the CFO’s parent company (when there is one). And because you may not boast the payroll to accommodate in-house accounting, small and medium-sized businesses benefit from this exponentially more than their larger counterparts.
  • Minimize off-peak periods. Outsourcing gives greater flexibility to hire a CFO according to a business’s peak season. If a company doesn’t need a full-time CFO during off-peak periods, they’re under no pressure to hire one. Maximize payroll, and profit, by limiting overhead and keeping overall costs low.
  • Flexible commitment. Taking a test drive before finding a full-time financial executive might not be the worst idea. Depending on your particular arrangement with your outsourced CFO, it might be easier to make changes if they’re not living up to expectations. 
  • Trained professionals. By looking outside your own walls, you can rest easier knowing your next CFO comes vetted by a home agency. This puts your financials in the hands of trained pros, leaving you more time to focus on scaling your business.

The perks of contracting an outside CFO can be great, but below are some challenges to prepare for along the way.

Challenges

  • Longer onboarding. Syncing workflows and work styles with that of a CFO-for-hire’s parent entity can take more time than hiring and onboarding an in-house employee. This is especially true when it comes to establishing communication procedures. Both your company and a parent agency or independent CFO will have their own way of working, and acclimating an interim CFO to your set of processes will require an extra dose of patience. 
  • Less control. When working with a CFO for hire, you forgo some leverage that comes with managing a full-time team member. Some motivators for high performance, such as opportunities for long-term career advancement, don’t exist. Often times, the client company won’t exert direct control over the CFO, instead having to coordinate with the home agency to voice concerns.
  • Limited independence. Outsourced CFOs typically don’t make considerable financial decisions on your behalf. While you can still expect to save buckets of time by outsourcing financial leadership, meaty financial decisions will still fall squarely in your lap. Of course, you’d want to be working with someone whose expertise you trust and who is able to push back and provide financial reassurance when needed. 
  • Vulnerability. Increased protection against the mishandling of money is definitely a pro of outsourced CFOs if there’s a quality agency or parent company with skin in the game. But the risk remains that a hired gun may mishandle sensitive financial data. You might get the sweats wondering if an outsourced CFO is engaged in Tom Foolery. 

Conclusion

It’s important to also consider how a nontraditional CFO might fit with your company’s team makeup, structure, and culture. But ultimately, only you will know if an outsourced CFO will positively impact your company’s bottom line. That’s the thing about the for-hire business: testing the waters is a built-in feature. Whether you want to use sporadic financial advice, or put feelers out for a good match that can eventually become in-house, you can shape outsourcing to fit your company’s specific needs.