Free-Reprint Article Written by: Braxton Heitz See Terms of Reprint Below.
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Most new business owners fail to understand that running a business is a complex operation, which will require the business owner/manager to pull many hat tricks to stay afloat. Additional Article Information: =============================== 1265 Words; formatted to 65 Characters per Line Distribution Date and Time: 2009-07-22 10:48:00 Written By: Braxton Heitz Copyright: 2007-2009 Contact Email: mailto:[email protected] For more free-reprint articles by Braxton Heitz, please visit: http://www.thePhantomWriters.com/recent/author/braxton-heitz.html ============================================= Special Notice For Publishers and Webmasters: ============================================= If you use this article on your website or in your ezine, We Want To Know About It. Use the following URL to let us know where you have used this article, and we will include a link to your website on thePhantomWriters.com: http://thephantomwriters.com/notify.php?id=4552&p=load HTML Copy-and-Paste and TEXT Copy-and-Paste Versions Of Article Are Available at: http://thePhantomWriters.com/free_content/db/h/manage-cash-flow-well.shtml#get_code --------------------------------------------------------------------- Small Business Owners Who Manage Cash Flow Well Profit Tremendously Copyright (c) 2007-2009 Braxton Heitz Jobs And Paychecks http://www.jobsandpaychecks.com/ Starting a business is always a tremendous undertaking. It is the most stressful undertaking a person could ever attempt to do. Most new business owners fail to understand that running a business is a complex operation, which will require the business owner/manager to pull many hat tricks to stay afloat. As the stress of the business grows, many new small business owners find themselves completely overwhelmed by all of the work required to keep their new business afloat. Much of the strain of establishing and running a business is centered on successfully juggling the finances. When working as the head of a corporation or as a sole proprietor, every decision made will affect the future of the business. Having a means of relief in place in the event that a wrong decision is made can often mean the difference between success and failure of the business. When a bad financial decision creates a situation where payroll cannot be met on time, a business can quickly find itself without staff to continue operations. Business Credit Cards For New Businesses In many cases, start-up companies seek out a loan at the beginning of their business. For business owners who are not comfortable taking out a large loan, there are other options that can be considered as an alternative. A credit card designed specifically for business is an option many companies will choose to pursue. This is just like a traditional credit card, but it also provides a variety of business directed incentives. Credit card companies generally offer low interest rates to attract new business enterprises. While the credit history of the owner of a small business is going to be considered in factoring how much credit a company can receive, other factors are considered to carry greater significance. The business plan and financial projections of a new company are going to be the most important categories available for banks to examine. Lenders and credit givers are fundamentally interested in learning about your projected financial expectations. For companies that have been around for awhile, an in-depth look at its financial history and business projections are going to be the most vital pieces of information a credit card company will want to know. A business credit card provider is going to be most concerned with the stability of the company. Some banks are so concerned about the stability of a business that they will not risk the investment of offering any type of credit to a start-up company, even if that company has a checking account at their bank, until the company has maintained their business checking account for at least one year. This is by no means meant to discourage a business owner from pursuing business financing. Instead, it is simply an observation of the difficulties that many business owners face when trying to establish business credit. Each bank has their own policies on business credit cards, and some banks will prefer to be more cautious than other banks. The Pitfalls and Advantages of Business Credit Cards As with any credit card, the most common pitfall of owning a credit card is the potential to overspend. It is always best to limit the amount of money that is charged on a credit card, whether in personal finances or business finances. Business start-up costs can be astronomical. There are also times when a company needs a few extra dollars to keep their utilities from being disconnected. If someone is not careful, they can easily charge their way into a deep pit of debt that could ultimately destroy their business. The truth is that cash flow is always a problem for new businesses. Small business credit cards can make it possible for a business owner to pay all of their bills on time. The danger, of using credit cards to maintain a business' cash flow, is when the owner is in a state of denial about the true health of his or her company. Unfortunately, some business owners become dependant on their line of credit and use it to prop up a business cycle that cannot sustain itself, ultimately leading to financial disaster. On the other hand, acquiring a business credit card could also be one of the best decisions an owner could make towards the long-term stability of his or her business. When a business owner has access to additional funds to float his or her business during a short window of cash flow problems, that extra money could be just enough to keep the business alive to continue operations. An example of such a situation could be when the company's bank intends to hold a deposited check until after the next payroll date. It is one thing for an owner to decide they can wait a few more days to be paid, but it is quite another thing altogether to ask a company's employees to wait five days to be paid their wages. Being able to access the financial means to keep a business steady and on sure footing can provide a terrific sense of security to the business owner. The time when a credit card becomes especially handy to the business owner is when tax time comes; a business credit card can be a true asset. No one is better at finding accounting flaws than our federal government, and almost every new business is going to be audited in their first year. If a company's transactions are all done with a business credit card, then the company will have a permanent record of all of their business transactions. Having documentation of all of your expenses is vital, when dealing with the IRS. The most important thing that a small business credit card can do is to provide you with the means to establish a reputable credit history with banks and lending institutions, so the business can gain access to higher credit lines than what the typical start-up company is afforded. Inspiring Examples One of the most successful cases of a small business succeeding by the use of a business credit card can be found with Google. Some would argue that Google is the most successful search engine on the Internet. It has become such a phenomenon that the company name has morphed in to a verb for all online searches. It is amazing to think that it all began in a dorm room. Its next home was in a garage. Eventually the founders of Google, Brin and Page, realized they needed larger equipment. They bought all of their new equipment on credit cards, because banks were not interested in lending money to a small dot-com company. Over 380 million people in over 35 different languages regularly use Google to enhance their online experience. All of this success was made possible by the start-up funds provided to the Google founders by credit cards. In Conclusion Business credit cards can mean salvation for a fledgling company. Having the resources to maintain your companies financial stability can make any business owner more confident with in their decision. A good line of credit for your business can also lead to countless openings for future growth. Establishing a strong and steady financial history can be the perfect asset in finding interested investors and development opportunities, when it is time to reach out for a bigger line of credit. For those small business owners who know how to utilize the credit system to grow their business, the future may be greatly enhanced. For those business owners who start their journey with credit cards, the climb to greater credit availability is made that much easier. --------------------------------------------------------------------- Braxton Heitz writes about family finances and the struggles of the job search. 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Learn more about our article distribution services by visiting: http://thephantomwriters.com/x.pl/tpw/info/article-distribution/index.html The content of this article is solely the property and opinion of its author, Braxton Heitz http://www.jobsandpaychecks.com/ --------------------------------------------------------------------- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ---------------------------------------------------------------------
