Any entrepreneur should be aware of this staggering statistic, that eight out of ten businesses fail in the first year and a half. Often times these small business owners are investing their own capital into a business in order to help it succeed. Because they invest their savings, and often unable to draw a salary, the failure of their business can be much more devastating than the average person losing their job. In order to prevent your business from going into debt and becoming another statistic then follow the helpful tips below.
Know when to outsource versus hiring help in-house. Outsourcing often involves only paying for professional assistance during the allotted time needed, rather than paying a full salary and benefits to employees that might not be needed full time. Consider accounting and finance employees. A small business might be okay hiring an part-time accountant to their taxes and bookkeeping, however, they might not be able to afford someone full time.
If you are in the real estate development business then development finance specialists might be able to help you get the needed funds without taking on unmanageable debt. With the booming economy roaring back it’s making sense to increase residential and commercial development more than ever before. Development finance allows you to receive funds based on the ever increasing value of your property, sort of like low interest collateral. This can be a win-win situation for the borrower and lending both.
Software and ERP systems are a necessity for any size business these days. They handle everything from the point of sale to the shipment and delivery of the product. These systems have become quite data intensive, which means the IT hardware costs and the costs of the people that run them can be astronomical. This is precisely why more information software companies are beginning to rent out their systems monthly, so that the upfront cost isn’t nearly as much. As such, this software is often accessed via the cloud. The cloud is more cost effective, and often times more secure, than running it all on your own servers in-house.
Follow these simple tips and you can avoid the fate of so many other entrepreneurs. Avoiding taking on long term debt can help keep interest and debt payments to a minimum so that you are able to invest more capital back into your business.