Business Condition And Solution

Since June 15, 2009, the United States Small Business Administration has been processing deferred payment small business loans of as much as $35,000 to be given out to 10,000 small businesses. This is covered by the SBA America Recovery Capital (ARC) Loan Program.

To qualify, companies should be private enterprises that are for-profit. They should have up to five hundred employees only and should be at least two years old. Furthermore, they should be able to prove financial need with a twenty percent decrease in sales, revenue or working capital. On the other hand, they should be able to prove that one of their two years in business has been profitable, and that with the infusion of cash they will be able to meet their existing and future debt obligations. This means positive cash flow projections. The ARC small business loans are intended to be used to pay outstanding debt such as payable to vendors.

For this batch of small business loans, there are no fees or costs involved, except if the borrower defaults on the loan later. In that case the SBA-approved lender can charge costs for securing and liquidating collateral.

The ARC small business loans also do not charge interest. Actually, the SBA pays the interest for the borrowers. Disbursement of the loan can take as much as six months but payment of the principal is also deferred for the next 12 months. After that, the borrower has five years to repay the loan principal.
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I. What is a Strategic Plan?

Business Owners or Managers are often so preoccupied with day to day immediate issues in their business they lose sight of their ultimate objectives. Taking a step back and reviewing their business is essential. There is no guarantee of success, but without it a business is much more likely to fail. A strategic plan is NOT a Business Plan. It is likely to be a very short or short document whereas a Business Plan is very detailed and much more substantial. A sound plan will:

• Serve as a framework for making decisions or for securing future support or approval as required

• Provide a basis for more detailed planning

• Explain the business to others in order to inform, involve and motivate

• Assist in performance monitoring or benchmarking as required

• Stimulate change, and become a foundation for the next plan

II. Why make a Strategic Plan?

Making a Strategic Plan is an exciting exercise, and gets the adrenaline going! It should be visionary, conceptual and directional, and because it must be realistic and attainable too, it will provide owners and/or managers to think strategically and act operationally. Being able to think strategically means that, when you make decisions and choices, you settle for the best strategic option. Operational issues are all taken care of, but without having to think too hard about it, you ensure that your decisions and choices are supportive of your long term strategic objectives.

Setting goals and focusing on them causes these goals to become subconscious drivers that guide your actions. Doing this in terms of a structured strategic planning system, means that you will tend to steer your business in the right direction all the time, and you will do this without consciously thinking about it.

Starting with developing a Vision and working from there means that the Vision becomes firmly entrenched in how you think about your business, and becomes a subconscious part of your thinking process.

The effect can be really powerful and rewarding. By putting the necessary effort into creating a comprehensive Vision and building on it, you become a strategic thinker. Taking the right strategic action becomes easy.

III. What is involved?

A critical review of past performance by Owners and/or Managers of a business, and the preparation of even a short Strategic Plan beyond the normal annual budgetary horizon requires the type of thinking described above. Some essential points which should be observed during the review and planning process include the following:

• Consider the medium term of 3-5 years

• It must be undertaken by Owners/Directors

• It must focus on matters of strategic importance

• It must take place outside normal day to day work

• It must be realistic, detached and critical

• It must be written down

• It must be reviewed periodically

IV. What does it contain?

In developing a Strategic Plan, it is necessary to clearly identify the current status of the existing business, its objectives and strategies. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived Strengths, Weaknesses, Opportunities and Threats. Also forming part of a Strategic Plan are the following requirements:

• Vision

• Mission

• Strategic themes

• Strategic Objectives

• Measures or Key Performance Indicators

• Targets or Goals

• Initiatives or Action Plans

V. Summary

The preparation of a plan is a multiply step process, but is not difficult to carry out, and can be done reasonably quickly. For business Owners who want to drive their businesses to the next level, a plan for the future is essential.

Setting up a home-based business may be a more cost-effective alternative to setting up a major company, but it may still drain the limited resources of a small business owner. To keep the business going, small business loans will definitely be necessary. These can be availed of through credit card services. This article will show you how.

First, you need to set up your home based business. Do your research on the type of business you want to establish. Find out what licensing and zoning requirements you need to meet and ensure that you meet them all. Do not attempt to cut corners here.

Get the services of an accountant, even if only on a consultancy basis, to help you set up your books and records correctly from the start. Ask for help in determining deductions so that you can plan on your business expenses. Establish a routine for keeping strict records of all income and expenses right from day one. Keep all business related receipts, invoices, client records, bank statements, bank deposit slips and canceled checks.

Being home-based, you need to set aside a particular place in your home just for your business. Make sure it can accommodate all the necessary equipment. Check that you have the appropriate electrical outlets and have them installed if needed to avoid overloading your system. Set up rules to keep the area insulated from household noise and disturbances.

Have a business phone installed that is separate from your residential line. Avoid having your children answer the business line. Install an answering machine to take calls when you are out or occupied.

Get a post office box so that you can use that address in your official stationery and other documents, keeping your business profile professional. Hold client meetings in rented conference rooms or set business meetings in good restaurants.

One of the most important steps in setting up your home-based business is to acquire credit card services that will enable you to accept credit card payments and debit card payments. These credit card services provide all the necessary software and hardware for you to be able to process payments in person, online or by phone. This step alone already expands the customer base that you can access.

Credit card services will also serve you well once your home-based business begins to feel the need for additional capital. When you need to get small business loans, you will not have to approach banks which are most likely not sympathetic to small home-based businesses.

The need for small business loans usually comes when the home-based business is already at least a year old. At such time, your home-based business would have created an average monthly credit card sales record with your credit card services company. You can refer to that when you approach your credit card services company for small business loans, sometimes called cash advances.

Credit card services do offer small business loans to their clients based on average monthly credit card sales, without the need for any collateral. The aforementioned average monthly credit card sales guarantee your company’s capability to pay the small business loans. Payments will be automatically deducted as a percentage of future credit card sales. This arrangement frees you from worrying about the amortization for your small business loans, too.

As soon as you pay up your small business loans completely, you are automatically eligible for new small business loans for as long as your home-based business is getting a good monthly average in credit card sales. With the help of credit card services, you can continue to expand and grow your home-based business.