Category: Content

Budding entrepreneurs are often attracted to places that offer them better infrastructure, entrepreneurial connections, and resources. Networking events, investor meet-ups, and demo days all provide opportunities to find good advice and investment opportunities. Finding solid connections is one of the initial aims of any entrepreneur, and these valuable connections help them slowly integrate into the ecosystem of the corporate world.

Hub Culture

The idea of start-up hubs is one thing that reduces entrepreneurs’ worries by a bit. Here, you can find all sorts of resources in one place – from necessary connections to valuable information. There are a variety of hubs available depending upon the region you’re willing to operate in. There are multiple start-up communities, and one may also be able to find a virtual start-up hub.

However, a choice comes in deciding which hub will yield better results here. Virtual hubs are convenient and can be accessed by an entrepreneur from an area that doesn’t have many entrepreneurial resources. However, brick-and-mortar hubs allow entrepreneurs to meet mentors and investors in person, better grasp information, and present their ideas.

Virtual vs. Brick and Mortar

The basic idea of both kinds of hubs is the same. However, there are clear differences between the two. The number of goals you’ve already set and the guidance you need can be the major factors in choosing between the two. Suppose you are clear with your business plan and have very specific requirements (for example, requiring a professional for accounting tasks such as bookkeeping). In that case, you may just be able to go to an online or virtual hub to get a contract to help you fulfill that particular requirement. However, if an entrepreneur needs more guidance, going to a brick-and-mortar hub is recommended to get quick information from experienced entrepreneurs quickly.

The two main reasons for entrepreneurs to opt for a virtual hub are:

1. Obstacles like geographic location that hinder access to a brick-and-mortar hub
2. The entrepreneur has a late-stage, well-settled start-up and seeks contacts to help start operations or grow.

A brick-and-mortar hub has its benefits. Interacting with investors and mentors in person can achieve a lot. Moreover, a physical hub allows the entrepreneur to join a community. Knowledge sharing can help grasp a better understanding of the entrepreneurial world.

Both types of hubs have the same aim, which is to help budding entrepreneurs. Many entrepreneurs believe the kind of hub they choose doesn’t make a difference. Most believe their location is the only significant factor in choosing between the two. Most entrepreneurs say that if they are in a big city with many resources, they’d prefer to go to a physical hub. Meanwhile, if they are in a remote location far from a big city, a virtual hub would be where they’d access the needed resources.

Some entrepreneurs emphasize that both kinds of hubs have a different impact on the start-up’s geographical location. Meanwhile, other entrepreneurs believe both hubs are essential and that utilizing both is necessary for success in different start-up stages. They also believe that to build a solid company, the entrepreneur must attend a brick-and-mortar hub for guidance and mentorship while using a virtual hub’s services for contacts necessary to achieve goals.

Conclusion

In conclusion, the decision between virtual and physical start-up hubs hinges on various factors, including geographic location, stage of business development, and specific entrepreneurial needs. While virtual hubs offer convenience and accessibility, brick-and-mortar hubs provide invaluable opportunities for face-to-face interactions with mentors and investors.

Ultimately, leveraging both types of hubs can be beneficial, as each offers unique advantages in fostering entrepreneurial growth and success. Regardless of the choice, the overarching goal remains to provide budding entrepreneurs with the support, resources, and connections needed to thrive in the competitive business world.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In the bustling world of small and medium-sized enterprises (SMEs), where dreams are built and ambitions soar, there lies an elemental force, often understated yet undeniably pivotal to their success: liquidity. Picture liquidity as the lifeblood of SMEs, a vital fluid coursing through their financial veins, empowering them to thrive, innovate, and conquer adversities. This fun, engaging dive into the significance of liquidity will not only enlighten but also entertain and inform, peppering facts and statistics to solidify the argument that liquidity, indeed, is the cornerstone of SME triumph.

Imagine an SME as a sleek, high-performance vehicle. Liquidity represents the fuel in this analogy. Without enough fuel, no matter how advanced or potent the engine might be, the vehicle won’t go far. SMEs operate in a similar fashion. They could have groundbreaking products, stellar services, or a revolutionary business model, but without sufficient liquidity, sustaining operations, let alone scaling, becomes a Herculean task.

So, what exactly is liquidity? In the simplest terms, liquidity describes the ease with which assets can be converted into cash without significantly affecting their value. For SMEs, this translates to having enough cash on hand to meet short-term obligations — from paying suppliers and employees to keeping the lights on.

Why, then, is liquidity hailed as the key to SME success? Here are a few compelling reasons:

Smoothing Out Cash Flow Volatility

SMEs are often subject to the whims of market fluctuations, seasonal demands, or client payment schedules, leading to periods of cash flow volatility. High liquidity ensures businesses can weather these fluctuations without resorting to drastic measures like layoffs or operational cutbacks.

Enabling Quick Decision-Making

With ample liquidity, SMEs can make quick decisions, seize growth opportunities, or pivot strategies without being hamstrung by financial constraints. This agility is a significant competitive advantage in today’s fast-paced business environment.

Enhancing Creditworthiness

Lenders and investors scrutinize an SME’s liquidity closely, as it indicates the business’s health and its ability to meet short-term liabilities. A solid liquidity position facilitates easier access to finance and often secures more favorable terms.

Buffering Against Unforeseen Challenges

The COVID-19 pandemic underscored the importance of having a financial buffer. SMEs with robust liquidity could more effectively navigate the crisis, adapting to changes and even innovating amidst adversity.

Now, let’s sprinkle some facts and statistics to highlight the indispensability of liquidity for SMEs further:

• According to a survey by JPMorgan Chase, the median SME holds a cash buffer large enough to support 27 days of their typical outflows. This startling statistic underscores many SMEs’ precarious financial balancing act and the critical need for adequate liquidity planning.
• A report by the Federal Reserve found that 85% of SMEs experienced financial challenges in the recent year, with the most common being securing funds for operating expenses. This indicates a widespread struggle with maintaining liquidity.

On a positive note, SMEs that prioritize liquidity management tend to outperform their peers. A study by U.S. Bank noted that 82% of business failures could be attributed to poor cash flow management, highlighting the direct correlation between liquidity and business viability.

In practice, how can SMEs boost their liquidity? Here are some practical strategies:

Efficient inventory management

By balancing just the right amount of inventory, SMEs can reduce holding costs and free up cash, enhancing liquidity.

Stringent credit control

Implementing strict credit terms and diligently following up on receivables can accelerate cash inflows, improving cash positions.

Exploring diverse financing options

Beyond traditional loans, SMEs can explore lines of credit, invoice financing, or even equity financing to bolster their liquidity.

Prudent cash flow forecasting

Regularly forecasting cash flows helps anticipate and plan for periods of cash tightness, allowing SMEs to make informed decisions about spending and investment.

In conclusion, liquidity isn’t just a financial metric to monitor; it’s a strategic asset that empowers SMEs to navigate the ebbs and flows of business with confidence and agility. By understanding and actively managing their liquidity, SMEs can unlock their full potential, driving growth, innovation, and resilience in the face of challenges. So, let’s toast to liquidity — the unsung hero of SME success, ensuring that the entrepreneurial spirit not only endures but flourishes.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

What is Personal Budgeting?

Budgeting is essential not only for businesses but also for an individual’s personal life. Personal budgeting is a method of monitoring and controlling your finances. It helps in monitoring personal finances and managing them accordingly. At times, we are so far from having a budget that we end up broke within a week of being paid.

This not only leaves you stressed out, but it even affects your professional life. You feel like you are not paid enough, or there is no use in getting paid, as you eventually end up with nothing within a week. While working and being broke, an individual’s mindset can be drastically impacted. Hence, a person needs to monitor their financial spending, analyze the problematic areas, and design a budget to improve their financial position.

Assess your Current Financial Position

It becomes frustrating when you know that you are working on a low salary and your expenses carry the weight of a mountain. Low-income budgeting seems hard at an initial level. However, you will figure out your budget plan more effectively if you start small. 

Categorize Your Expenses

The first and best way to budget is to monitor your current lifestyle. Observe your spending habits and monitor your current financial position. Before making any budget quota, list your expenses in the following categories.

Debt

Your long-term expenses include student loans, car loans, unpaid bills, credit card balances, etc. Writing them down will give you a shockingly realistic yet clear picture. Don’t worry. However, they are not impossible. 

Monthly Bills that are Fixed Expenses

Monthly bills are something that you cannot avoid. They are things that you have to pay for. However, listing them gives you a clear snapshot, and you can even reduce them to a limited extent. These expenses include rent, utility bills, cell phone plans, gas, and food.

All the Variable Expenses that You Can Balance

Variable expenses are all leisure or emergency expenses that do not occur every month, such as buying new clothes, dining out, buying new gadgets, getting your car fixed, and other fixtures and expenses at your residence. You cannot simply eliminate all of these expenses. However, you can manage a few of them and see which expenses are repeated often.

Identify Your Problem Spending Areas

When you are done listing all expenses, you will be better able to pick out the problematic areas straying you away from your budget every month. This problem could even highlight the areas that need your immediate attention. For example, if your car asks for monthly monetary attention, you need to get it fixed properly once and for all before it breaks down completely.

Making a Budget

Designing a budget is not difficult unless you don’t manage your steps carefully. It is essential to design it step by step as it will help you design a practical and applicable budget for your expenses. 

Step 1: List all your liabilities and plan your gradual repayment method. Once you have listed your liabilities, you must design your payback method. You should not overburden yourself by paying all of your liabilities together. Although, going for a crash repayment will leave you dissatisfied, and you could add more loads.

Step 2: List all of your necessary expenses.

Step 3: Prioritize your money goals.

Step 4: Cut your unnecessary expenses. Now, this is the most challenging part of it all. You might feel it is practically impossible to cut down as every bill you pay is a basic necessity. However, once you have crossed the monitoring and budgeting steps, you can figure out the failure in your current spending methods.

Step 5: Be Frugal.

Tips to Create a Budget and Save Money without Going Broke

• Be realistic in setting financial goals.
• Record every transaction meticulously.
• Prioritize bookkeeping to track expenses.
• Exercise control over your spending habits.
• Balance frugality with enjoyment; don’t eliminate all recreational activities.
• Seize upcoming opportunities for savings or additional income.
• Continuously update your budget, reallocating freed-up funds towards other financial goals.
• Maintain emergency funds for unexpected expenses.
• Allocate remaining cash based on percentages to ensure balanced spending and saving.

What are the Budgeting Benefits?

Budgeting offers numerous benefits:

1. It allows you to concentrate on your financial objectives.
2. It fosters financial stability and organization over time. With a budget in place, you gain better control over your finances, enabling you to manage expenses more effectively.
3. Budgeting ensures you have surplus funds for emergencies and provides a clear overview of your finances.

Overall, it also helps identify and rectify poor spending habits, leading to financial improvement.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Poor Management Team – A Standard Startup Error

A frail management team is An unfathomably common issue in the startup of any business. Feeble management groups commit errors in various areas:

• They frequently fail to build a correct strategy. Making a product that no one needs to purchase is a sign that the management neglected to do the necessary work to gather and refine ideas before and during development.
• They are generally poor at execution, which causes issues with the products not being produced accurately or on time. Furthermore, the go-to-market execution will be inadequately actualized.
• They will assemble vulnerable groups beneath them. There is a well-demonstrated saying: A players employ A players, and B players get to enlist C players (as B players would prefer not to work for other B players). So, whatever is left of the organization will be fizzled out in months.

Running Out of Cash – A key Startup Consideration

New companies fail to identify in the startup phase because of their lack of finance. A key component for the CEO to consider is to see how much money is left once the startup is launched and whether that will take the organization to a breakthrough that can prompt adequate financing with a positive cash flow. An efficient bookkeeping system is a must to ensure this.

Breakthroughs for Raising Cash

The valuations of a startup don’t change abruptly over time. Because you are in the second year of business since its inception, it does not imply that you are worth more cash. An organization must accomplish specific key turning points to achieve an expansion in valuation. In the case of a software organization, these might look like something as follows (these are not hard and fast standards):

• Progress from seed round valuation: the objective is to eliminate some fundamental risk components.
• If the product is completed, but there isn’t yet any client approval, valuation won’t likely build much. The client approval part is significantly more vital.
• The product is already in its delivery stage, and clients have made prepayments for it and are giving positive feedback.
• Product/Market fit issues typical with a first release (a few missing highlights that were most required in many sales situations, etc.) have generally been wiped out. These are early signs reflecting that the business is beginning to decline.
• The business model is recognized and endorsed. It is now known how to procure clients, and it has been demonstrated that this procedure can be scaled. The cost of gaining clients is acceptably low, and unmistakably, the business can be productive as an adaptation from every client surpasses this cost.
• The business has scaled well yet needs extra finance to speed up development. This capital can be extended globally to accelerate development in highly dynamic market conditions or support working capital needs as the business develops. Efficient bookkeeping strategies are needed to sustain such financing issues.

What Goes Wrong?

What often goes wrong in the startup causes an organization to come up short on money and unfit to raise more because management neglected to accomplish the future milestones before the money ran out. Commonly, it is possible to raise finance by debt-servicing methods. However, the risks would be too significant in the long run. Not placing due emphasis on bookkeeping methods can lead to such an outcome.

When to Hit the Accelerator Pedal

One of the CEO’s most imperative jobs is managing the accelerator pedal. At the beginning of the business, while the product is being created and the strategy refined, the pedal should be set softly to save money. There is no point in enlisting numerous marketing individuals if the organization still completes the product to the point where it meets the market requirements. This is a widespread error and will bring about a quick failure and loads of frustration.

Product Problems

Another reason organizations fail is neglecting to build a product that meets the market requirement. This can be because of execution or a strategic issue, such as an inability to accomplish Product/Market fit.

More often than not, the first product that a startup brings to market will most likely not meet market requirements. It will take a couple of modifications to get the product/market fit right in the best cases. In the most undesirable scenarios, the item will be off the track and require an entire reexamination. On the off chance that this happens, it is a good sign of a group that didn’t take the necessary steps to get out and have their ideas validated with clients during and before development.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Many organizations and business owners face fraud yearly due to their employees or business partners. New entrepreneur startups and small businesses are more vulnerable. The risk of fraud has increased due to the advancement of technology and the progressive development of the world into a global village.

The increased awareness of technological developments and complex organizational structures requires corporations to incorporate internal anti-fraud approaches to combat fraud. According to 2014 research reports by Global Nation, organizations face a 5 % loss due to fraud each year, of which internal employees committed 85 % of severe fraud cases. Organizations should develop multi-layered fraud prevention strategies while keeping these statistics in view.

Organizations and businesses should do the following ten things when they suspect fraud.

Be Calm and Don’t Panic

Fraud is scary, and you will likely want to panic and react abruptly when you suspect fraud at your organization. You may terminate the fraudster on the spot or meet them head-on for confrontation. But these are harmful rather than good for the organization. Don’t react when you are emotional or angry. Prepare a plan, investigate, and do what benefits the organization. Make strategies and policies to handle fraud before it happens.

React Logically

It is not preferable to overreact or have no reaction at all to a suspect. If you don’t react and take it easy, the perpetrator will think they can do anything. Childish behavior toward fraud will worsen, and the perpetrator will commit fraud without fear of consequences. Always take action when you suspect fraud but react logically.

Be Careful

If you suspect fraud, don’t declare it until you have evidence. If you react without evidence, the fraudsters become alert. The fraudster will try to hide and destroy evidence if they know they are being exposed and you are watching them. After suspecting something is wrong, don’t make it obvious. Investigate carefully. Otherwise, you will not be able to get any evidence.

Back up Financial Data

Always maintain backup data of your organization’s financial dealings. Save on hard copies or hard drives. Get a copy of a hard drive of your suspect discreetly. Preserve all records of transactions, emails, payroll, and bookkeeping. Perpetrators often utilize this information, primarily bookkeeping records, to commit fraud.

Rehiring

Be mindful and prepare to hire new personnel. Termination is the minimum consequence of fraud detection. Managers and executives are often so involved in fraud that filling the new position can be challenging. Prepare yourself for such challenges.

Defend Your Reputation

Fraud damages the image and reputation of the organization in front of the public, customers, partners, and donors. Try to react calmly and defend your reputation. Resume the trust of partners and customers by assuring them that the organization has taken corrective measures.

Don’t Save Money

Financial loss due to fraud is recoverable, but the reputation is not recoverable. Hire a certified fraud examiner to make policies for fraud prevention and detection. Your organization may try to save money by not hiring a certified fraud examiner but will suffer a lot after an incident of fraud. Realize that money is not everything. What matters more is the hard-earned reputation, which fraud can easily damage.

Set an Example

Set an example by handling fraudsters with tight hands. Otherwise, you may encourage others to commit fraud in the future. After fraud, the penalties recommended are a civil lawsuit, termination, and criminal prosecution. Impose all three penalties severely, if possible. Moreover, the employees will see zero tolerance for fraud in your organization and face severe consequences if they go there.

Get Help

Don’t try to handle fraud alone because it involves accounting and legal issues. Call a certified fraud examiner for help. Furthermore, they know where to get evidence and how to explain it to the legal system.

Make Positive Changes

Learn from an incident of fraud and prepare the policy for detection and prevention of fraud in the future.

Conclusion

Overall, fraud in business can result in significant financial loss, wastage of time, and a ruined reputation. Fraud should be handled when suspected.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Loan amortization means paying off your balance over time through regular payments distributed over a certain period. The term is generally associated with paying off loans. However, amortization has broader applications in accounting terms and can be applied to various balances.

Each monthly payment for your home or auto loan may appear the same. However, it never is and is made up of several parts, which change over time. As you reduce your loan balance, also referred to as loan principal, the interest rates, which are initially very high, come down gradually, resulting in lesser monthly interest payments.

Loan amortization for long-term loans would generally include high interest costs at the start. As more and more amount goes into your principal over time, the cost drops significantly. The period is specified before the amortization process and is designed to ultimately pay off the debt within the specified period.

Showcasing the True Cost of Borrowing

An amortization table will highlight every payment you must make to pay off the debt. The table highlights a starting balance, an ending balance, a fixed payment amount you have to make each month, a principal amount calculated by subtracting the ending balance of each month from the starting balance, and the interest payments that would decline every month.

Instead of focusing on monthly payments because they will remain the same, a loan amortization table can help you calculate the exact amount of interest that needs to be paid. Typically, people base their decisions on the amount of the monthly payment.

However, the actual cost of borrowing is more accurately determined through interest costs, usually stretched over a long period. Therefore, to evaluate the actual costs associated with a loan, you must always consult an amortization table.

Loan Amortization Helps in Decision Making

Deciding which loan to choose can be tricky, as assessing each lender’s terms can be challenging. Interest rates or shortening the payment span can significantly influence the amount you can pay. There are also ways to skip interest charges on loans if you make early payments.

 It will always pay off if you decide on factual information instead of going with a good offer. Amortization of the loan ensures you are offered detailed information on every payment to plan accordingly. Loan amortization makes decision-making a lot easier.

How to Amortize Loans

There are many ways to create amortization tables. You can build one or use an online calculator to create one easily. The online option is more convenient and reliable for loans over a long period. Figuring out how the table works is simple math.

The payment is centered on the amount of the loan, the interest rate, and how many years the loan lasts. Those three ingredients affect how much you pay each month and how much total interest you’ll pay. As you lower the interest rate, the payments will also decrease.

Stretching out the loan over a longer duration would lower the payments. However, you end up paying more interest. All values work in response to one another.

Types of Loan Amortization

Auto Loans

Auto loans are usually five years or shorter and are often paid through fixed payments. Because the loan is not a tremendous amount of money compared to other types of loans, buyers prefer to pay them in equal payments without stretching them out and raising the interest costs.

Home Loans and Mortgages

This loan is spanned over extended periods, such as 15 or 30 years. People generally tend to refinance these types of loans at some point.

Personal Loans

Credit unions, banks, and online lenders offer personal loans at fixed interest rates to be paid back within a specific period. A loan amortization must be done for all personal loans to ensure you can plan for future payments.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The retail industry has been challenging and dynamic for many years. Retailers constantly face various obstacles, such as economic downturns and changing consumer preferences. However, the industry has undergone significant changes in recent years. This makes it even more challenging. The rise of e-commerce giants like Amazon has revolutionized the market. Therefore, this has led to a shift in consumer behavior. People increasingly prefer to shop online, often at the expense of traditional brick-and-mortar stores. 

Moreover, the COVID-19 pandemic has further transformed the retail landscape. Many businesses are forced to close their doors temporarily or permanently due to lockdowns and social distancing measures. As a result, consumers have become even more reliant on online shopping. This has accelerated the growth of e-commerce and posed a significant threat to physical stores.

In such a rapidly changing environment, retailers struggle to keep up with the competition. They find it hard to adapt to the industry’s new realities. Moreover, they need to find new and innovative ways to reach consumers. Enhance the customer experience and remain relevant in an increasingly digital world.

Despite these challenges, there is still room for new retail entrepreneurs to succeed. By understanding the latest challenges the retail industry faces and taking steps to overcome them, new entrepreneurs can position themselves for success. However, here are some of the latest challenges the retail industry faces and what new entrepreneurs can do to succeed beyond them.

Challenge #1: Competition from E-commerce Giants

One of the biggest challenges facing the retail industry today is competition from e-commerce giants like Amazon. With a vast selection of products, competitive pricing, and fast shipping, e-commerce has become the preferred shopping method for many consumers. However, this has left brick-and-mortar retailers struggling to compete.

Solution

To succeed in the face of competition from e-commerce giants, new retail entrepreneurs must focus on what they can offer that Amazon can’t. This could be personalized customer service, unique products, or a memorable in-store experience. Furthermore, entrepreneurs can attract customers looking for more than convenience by focusing on what makes their store unique.

Challenge #2: Changing Consumer Preferences

Consumer preferences are constantly changing, and retailers must adapt to keep up. Consumers have become more conscious of their environmental impact in recent years and have started prioritizing sustainability. Furthermore, they also seek more personalized experiences and products that reflect their values.

Solution

To succeed in the face of changing consumer preferences, new retail entrepreneurs need to stay up-to-date on the latest trends and be willing to adapt. This could mean offering sustainable products, creating a personalized shopping experience, or using social media to connect with customers. However, by staying ahead of the curve, entrepreneurs can stay relevant and attract customers who are looking for something new.

Challenge #3: The Impact of COVID-19

The COVID-19 pandemic has had a profound impact on the retail industry. Many stores closed for months, and consumers hesitated to shop in person. Retailers have had to adapt quickly to stay afloat. While some retailers have been able to pivot to e-commerce or offer curbside pickup, others have struggled to survive.

Solution

To succeed in the face of the COVID-19 pandemic, new retail entrepreneurs need to be flexible and adaptable. This could mean offering online ordering and delivery, creating a safe in-store experience, or using social media to connect with customers. By being proactive and responsive to changing conditions, entrepreneurs can position themselves for success even in uncertain times.

Conclusion

In conclusion, the retail industry faces several challenges. But there is still room for new entrepreneurs to succeed. By understanding the latest challenges the sector faces and taking steps to overcome them, new entrepreneurs can position themselves for success. Whether it’s offering personalized customer service, staying ahead of the latest trends, or being flexible in the face of uncertainty, entrepreneurs who are willing to adapt can thrive in the competitive world of retail.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

You can schedule how your company’s resources are utilized and track varied costs associated with resources’ usage for a particular project. It involves machine hours, employee hours, inventory goods, and other usages tracked for job progress.

If a job has been running for an extended period, you may transform such costs on the balance sheet to work in the process account. Doing so allows you to analyze the costs and include them in your income statements whenever required.

Work in process is a prompt step that inputs labor and materials and converts them into consummate goods. The balance in the work-in-process account is the total value of semi-completed inventories at the end date of reporting.

Large companies know the significance of calculating work in process to make their inventory perpetual. However, trade businesses, in which a tradesperson employs transitory methods of inventory by taking physical resources of consummate goods into account, can use this formula for determining work in process.

Importance of Calculating Work in Process

The role of calculating work in the process is essential in these manners:

• To make sure that the work is going to make maximum profit
• Understanding of cost structure is enhanced
• To effectively manage employees and projects in a profitable way
• Enabling the company to make informed decisions that are relevant to the business

Rate to Cover Your Payment

You can calculate your rates to recover your payments. If you make a $10,000 net profit in your business in a single year and have yet to take payment, you had better work at KFC, which has a better wage system and fewer worries.

The first step should be determining how much you need because the wage depends on your circumstances. You need to consider every need, including mortgage payments, cost of living, etc. Trade businesses are usually covered by doing paperwork such as generating invoices, bookkeeping entries, bills, etc.

The next step is finding out how many hours you can work. No tradesperson can physically work for 24 hours. However, they need to dedicate more working hours to make maximum profit. If you work 40 hours a week and 2080 a year, you must consider your holidays, sick leave, and official leave. If the holidays account for four weeks and ill and other leaves account for three weeks, 52 weeks will become 45. That means you are working 1800 hours in a single year. This way, you can manage your costs and profits and calculate your work.

 Rate To Cover Your Running Costs

You can calculate this rate to recover your running costs for the trade business. If a tradesman does not charge for a single hour, you still have to pay for power, rent, and vehicle costs. You must begin by analyzing your previous costs because, if you do not, you will not generate profits in your succeeding business.

 Profit Margin

Calculating this would help you get the return you want from your business. You should build a specific percentage of the profit margin for every hour of chargeable time. This margin must go hand in hand with the reasonable time you allocate to this calculation.

In addition, you should compare your charge-out rate to the industry averages to know whether the total rate could be competitive. Do not forget to charge after an hour of work to find appropriate rates. If the rate is lower than the average rate, it will allow you to win in the business. Charging too little is the same as charging too much because it can undermine the confidence of consumers and employees in your industry.

 Material Costs

When calculating work for charge-out rate, material costs are not included. These costs are separately added to the markup. It can be done in various ways. You can use the wholesale or retail price or the actual price to put the mark upon.

Conclusion

• Be realistic in your business and meet the expectations of your employees
• Understand the cost of the business to generate maximum profits
• Find material and variable costs, including bills, vehicles, overtime, etc.
• Review changes and revise the costs whenever required
• Analyze the cost structure instantaneously and know what other competitive businesses are charging
• Be aware of what the market wants to pay
• Neither look for lower or higher rates than the average but keep them in a sustained manner

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The gearing ratio measures the proportion of funds borrowed by a company to equity. It is calculated as the total loan (liabilities of the long and short-term included in this loan) divided by the total equity of the shareholder. This is an important term used in bookkeeping. A specific formula is used to calculate the gearing ratio in bookkeeping.

It is the amount of equity needed to pay outstanding debts. Low gearing is the best option for SMEs because a company with a 10% gearing ratio could pay off debts more quickly, and investors consider it a low-risk company. Also, companies with a high gearing ratio of around 50% or above are considered a greater risk because they could be defaulters or bankrupt if profits decline for small periods or rates of interest increase.

The gearing ratio is one of the most common tools to evaluate the financial fitness of a company. The formula to calculate the gearing ratio in bookkeeping is as follows.

Gearing Ratio Formula = Debt / (Debt + Equity)

Types of Gearing

Financial gearing

Financial gearing includes using debt to fund a business.

The risk is increased by financial gearing, though returns are raised. The debt is a risk for the business. It is a relationship between loan and equity, i.e., how a business is funded.

Operational gearing

This term is used less commonly. It is the relationship between fixed costs and variable costs of the business.

Disadvantages of Higher Gearing Ratio

A higher gearing ratio suggests abundant leverage when an SME is consuming debt to pay for its ongoing operations. In a trade recession, such SMEs may face distress while meeting schedules of their debt and are at risk of bankruptcy. The condition is hazardous when a firm is involved in debt engagement interest rates, which are variable because a sudden rise in rates could lead to serious problems in the payment schedule.

A regulated industry such as utilities is not as affected by this. They have a monopoly in business, and regulatory authorities will increase the rate to cover the gap and ensure their continued survival. Possible requirements by financiers to lessen this problematic situation are restricting agreements that disallow the payment of shares, enforcing extra cash flow into debt repayment, constraining substitute usages of cash, and imposing conditions for shareholders to place additional equity into the firm. Creditors have a similar concern but are commonly incapable of enforcing alterations on the firm’s conduct.

SMEs that require large fixed assets have higher gearing ratios. A company with a low gearing ratio may manage finances conservatively. However, it may indicate that a company is sited in highly cyclical diligence and can’t afford to turn overextended in the aspect of an unavoidable downturn in trades and revenues.

Methods to Reduce Gearing Ratio

In bookkeeping, the value of the gearing ratio of a company can be reduced by the following methods:

Trade shares

If an SME is able to get permission from its board of directors to sell shares, then the revenue received after selling shares could be utilized to pay loans. 

Convert debt

These debts could be converted into shares after negotiating with lenders. 

Decrease working capital 

There are two ways to decrease the working capital: reducing inventory levels and escalating the speed at which receivable accounts are collected. The second is to increase the duration in which accounts payable are required to pay and lengthen the days needed. These methods produce cash, which is used to pay off debts. 

Escalation of profits

Practice all known methods to increase revenues so that more cash is generated, which could be used to pay off loans.

Conclusion

SMEs should maintain a low gearing ratio as it shows that the company is financially stable. This will result in attracting a large number of potential investors or lenders.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Are you looking for a fun, lucrative way to make money in the real estate industry? Look no further than fix-and-flip properties! This strategy involves purchasing a property needing some TLC, making the necessary repairs and renovations, and then selling it for a profit. While it sounds simple enough, many factors should be considered before diving in. But don’t worry, we’ve got you covered! 

In this article, we’ll share valuable insights on generating profits using the fix-and-flip approach. Once you have these tips and tricks, you will quickly be on the path to financial success! Let’s get started!

Here are six essential strategies for making money from fixing and flipping properties.

Research and Analysis

Before you get started, knowing what to expect from the industry is always critical and a good starting point. Conducting thorough research and analysis is the first step in any successful fix-and-flip investment. This includes researching the local real estate market to determine if it is favorable for fix-and-flip investments. You should also conduct a comparative analysis of similar properties in the area to determine the property’s potential resale value after repairs and renovations. This lets you know what to expect from a buying market once your flip hits the market.

Establish Your Budget

Once you have identified a potential property to flip, the next step is to establish your budget. This includes determining the property’s purchase price, the cost of repairs and renovations, and any additional expenses such as holding costs, insurance, and taxes. It is important to establish a budget and stick to it to ensure that you can generate a profit on your investment.

Hire the Right Contractors

Hiring the right contractors is one of the keys to success in fix-and-flip investing. It would help if you found experienced, reliable contractors who can work within your budget and timeline. You should also obtain multiple bids from different contractors to ensure that you are getting a fair price for the work.

Make the Right Repairs and Renovations

When fixing the property, it is important to make the right repairs and renovations. This includes focusing on repairs that will add value to the property, such as updating the kitchen and bathrooms, replacing outdated plumbing and electrical systems, and repairing any structural damage. It is also important to focus on cosmetic improvements such as fresh paint, new flooring, and landscaping to enhance the property’s curb appeal.

Price the Property Correctly

Once all repairs and renovations have been completed, it is important to price the property correctly. This requires considering the current market conditions, the resale value of similar properties in the area, and the total cost of the repairs and renovations. Setting the right price is critical to generating a profit on your investment.

Market the Property Effectively

Finally, it is important to market the property effectively to attract potential buyers. This includes using high-quality photos and videos to showcase the property, creating a compelling listing description, and utilizing social media and other online platforms to reach a wider audience. You may also want to consider hosting an open house or hiring a real estate agent to help you market the property. 

In Conclusion

To summarize, fix-and-flip investing can be a lucrative strategy for generating profit in the real estate industry. However, it requires careful research and analysis, establishing a budget, hiring the right contractors, making the right repairs and renovations, pricing the property correctly, and marketing it effectively. Following these steps can increase your chances of success and profit from your fix-and-flip investment.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.