BY PETER MEYER,
Market President at TD Bank, America’s Most Convenient Bank©
The financial and emotional impact of the Great Recession has probably made many Queens small business owners ask themselves, “Is owning a business even worth it anymore?”
The answer can be, “Absolutely!”
According to the TD Small Business Happiness Index, a survey that examined the attitudes and behaviors of small business owners in a dozen North American metropolitan areas, the top stressors for business owners in 2010 included (you guessed it): managing budgets and cash flow, demanding responsibilities, and long hours with limited time off.
However, despite the ongoing challenges of managing and growing a business, the survey also found that overall, small business owners remain happy – citing personal accomplishment and being their own boss as sources of satisfaction.
So, Queens small business owner: What is your current mood?
Here are five proactive tips towards eliminating stress and enjoying a leap of spring success for your small business!
Apply for a new SBA loan
Under the Small Business Jobs Act of 2010, the SBA has permanently increased limits under its popular 7(a) and 504 programs from $2 million to $5 million – and up to $5.5 million for energy-related projects. These loans can be used for general business purposes such as working capital, equipment purchases and real estate acquisition.
With the increased size changes, business owners can anticipate significant cash flow enhancement and lower equity.
For example, consider a TD Bank customer with $3,000,000 in revenue and 25 employees looking to buy a new, $400,000 CNC machine to support their manufacturing operations. Under the SBA financing solution (6 percent, 15-year-note), the annual principal and interest payment would be $40,500 – increasing the customer’s annual cash flow by $52,300 versus conventional 5-year financing at 6 percent. The payment terms are based on the useful life of the asset to be purchase and combined with putting less equity upfront, the cash flow for the company significantly improves.
Study these business-friendly programs and seize the opportunity, if applicable. Learn more by speaking with a SBA loan expert at a bank designated as a SBA Preferred Lender.
Update your current business plan
Did you meet or exceed your 2010 business goals? If not, review what didn’t work and learn from these mistakes. Write down realistic goals and expectations for 2011 and review them on a regular basis.
From a financial aspect, an effective business plan should include an accurate business balance sheet, income statement and cash flow forecast. Exact information on revenue and expenses, net worth and descriptions of assets and liabilities is crucial.
Finally, if your small business is in a position to grow, the better you can present a successful business plan, the more likely you will be able to convince lenders to approve your new loan on favorable terms. Specify what a new loan would be used for as well as an elaborate plan on its repayment. Most importantly, make sure your business plan proves positive cash flow and a profitable track record.
If you have questions or concerns about your business plan, speak with a small business expert at a financial institution.
Save money on insurance
Many businesses today do not have the time or resources needed to staff a full-time employee benefits manager. Talk to your insurance agent about the needs of your business and what competitive, customized benefit plans are available to you and your employees.
Small business owners should also stay updated on the proposed changes concerning the Health Care Reform Act. Although many of the reforms don’t take effect immediately, some are already impacting small businesses. For example, the federal government can now subsidize up to 50 percent of employee premiums if a small business is willing to pay the first 50 percent.
If it has been a while since your last insurance quote, chances are an updated quote can lead to higher savings. When reviewing your 2011 insurance plan, if you feel that lower rates can be discovered elsewhere, partner with a broker who can help you shop for the best deal.
Take advantage of commercial real estate opportunities
One positive aspect of the recession is that it remains a buyer’s market for businesses looking for new space. Since 2007, commercial real estate value has dropped up to 45 percent nationally. High vacancies in ideal locations have led to desirable options at reduced and affordable rental rates. Search online, review the classified section of your local newspapers, or take a stroll in an attractive area. Before committing to a bank, look at their history of service and convenience to handle your every day checking and deposit needs. Ask about their ability to lend for various products such as lines of credit, mortgage financing for owner occupied, and investment real estate. A financially strong and well-capitalized bank should have a high-quality Moody’s rating (preferably Aaa) and never had to accept TARP funding. Your chosen bank will be a key partner in the long-term growth of where you conduct your business.
Maximize online banking services
Online banking is a necessary tool for any business owner and is available at most financial institutions. The benefits of this useful service include 24/7 access to real-time information, account transfers and payment management. You can easily schedule and manage your payments, submit remittance information, and have an audit trail for your payment history. Many banks, including TD Bank, also offer free (and secure) online bill pay – saving you money on postage costs.
Finally, tracking your accounts through online banking helps you avoid trips to the bank and allows you to focus on what’s most important: the success of your business.
Following these five proactive tips can put you on the track to happiness and increased profits this spring!