Businesses of all sizes have expenses. Payroll, supplies, equipment, bills, and more can really eat into a budget before any revenue gets to the bank account. For smaller businesses trying to manage finances, there are ways to run and grow operations without decimating your budget or taking on a ton of debt.
1. Purchasing equipment isn’t necessary
While every business uses equipment, the large cash outlay to purchase machinery, vehicles, and tools can deplete capital reserves or force business owners to take out loans. If you run a small business, or simply want to reduce expenses, try leasing equipment instead. Leasing agreements are flexible and the payments are manageable, so businesses can get the exact equipment they need. Leasing companies also handle maintenance and repairs, which also eliminates extra expenses for your small business.
2. Use Contractors or Staffing Agencies
If you run a small business, you may want to staff your operation with contractors or use a staffing agency. While contractors may get paid more per hour than regular full-time employees, you also will not have to include them when filing your quarterly IRS taxes. The cost of contractors and temps can actually end up saving your small business money when it comes to employee taxes and liabilities.
3. Loans shouldn’t be your first answer to financing
Small business owners are staying away from debt-based financing because of how it impacts cash flow and internal finances. Additionally, loan requirements have tightened over the years, and newer businesses may not have the credit ratings or collateral to qualify for the financing they really need. Loans can place a strain on finances because revenue needs to be portioned out to make those monthly payments. A short-term loan now can end up placing a strain on finances later.
4. Speed up revenue for your small business
The wait between sales and revenue can sometimes seem like an eternity, especially if your small business issues invoices with payment schedules of 30, 60, or even 90 days. While you are waiting for payments from your clients, you still need to make payroll, cover the bills, and pay any other expenses that arise. To speed up the rate at which revenue comes into your small business, use invoice factoring. By using factoring, unpaid invoices will be converted into cash which will be made available within 24 hours. This allows your business to stay on top of finances, cover expenses, and plan for growth projects without relying on debt-based financing.
New Century Financial is a national leader in invoice factoring services. We offer fast and transparent services and allow you to choose which invoices get factored without any long-term contracts or hidden charges. Contact our offices today to speed up your revenue.