Wobbly Banks – What Does This Mean in Your Steps to Starting a Small Business?

The FDIC seems to admit in today’s ABC news story, that there are more banks that really should be shut down, but the FDIC doesn’t want to hurt the public’s confidence in the banking system, so they are going to take it slow on bank closings, even though it will cost them more money in the long-term. What does this article mean for those starting a small business? It seems deposits are protected up to $250,000 by the government. But, what about your lines of facility for your business?Your loan is regarded as an asset of the bank and should a bank fail, its assets including its loans book is sold. The new bank may have completely different guidelines and lending policies. Not all banks are entirely comfortable with small business start ups, especially in these challenging economic times. You’ll need to understand your new banker’s criteria on loans to small business, especially if you are a small business start up. Does your agreement provide for annual reviews? Check this and understand their criteria before your review.If you do have a new banker, make a point of ensuring you do understand their lending and security criteria and importantly, work to strengthen your balance sheet. Is your loan subject to covenants? Check this now so that when it is time for your review, your numbers well and truly satisfy all the covenants.Covenants are like certain financial ratios you and your business must comply with, else the loan requirements are breached. It’s serious if the covenants are breached. If you don’t know what this means, take your loan agreement and seek advice from an accountant.One of the most important steps to starting a small business is securing stable and reliable lines of credit. Cash flow is KING! Any disruption to your facility lines means disruption to cash flow. If you can’t pay as a result of a temporary reason such as, your facility lines are under review or you have to reapply, suppliers, frankly, don’t care. They will just stop providing the goods….And what happens if you don’t have goods your customers want? …Your customers will just source the product from your competitor. Now, sending your customers to your competitor is simply not a good idea.What do you do now, having read this article?1. You can’t control whether or not your bank will fail, but you can control the state of your business
2. Check the requirements of your small business loan. What are the financial covenants if any?
3. Understand the bank requirements of your financial performance and put in place, now, the strategies so that you meet the stipulated criteria. With banks, there’s no excuses. If you have conditions you need to meet – just make sure you meet those criteria.
4. More bank failures mean instability, uncertainty and a lack of confidence. Consumer sentiment drives the economy. Look at your plan for the next year and trim your sails based on what you’ve learned in this FIDC announcement.
5. It looks like the economy’s not out of the woods yet. Remember, cash flow is the life blood of business. In your steps to starting a small business, plan always to have a reliable source of free cash flow.For more tips on steps to starting a small business, visit the link below.

I Want Small Business Accounting Software Without the Need to Be an Accountant

Isn’t it time that the majority of the big corporate accounting programs developers take a leaf out of a book of some of the small business accounting software developers. Without pointing any fingers it has become a world where big business is pulling the strings, Accountants are having a win fall and Small Business owners are being raped in the process.We Don’t Want To Be AccountantsI was talking to one of my friends late last week and he commented on how his accountant kept trying to push him into purchasing one of the more well know corporate programs titled as being suitable for smaller business. My friend went on to say that he had previously used this program in the past and that he wasted more time trying to work out how to use it then actually entering information into it, in the end he had to get a mobile bookkeeper to do it for him.So why is the Accountant wanting the change? My friend told me that in his belief it is because the accountant uses this system and it will make his life easier, but after my friend had already been there done that he was never going backwards again. To him changing from the software he was now using would actually be like taking a step backwards in time so he would rather change to a new accountant instead of suffering with the daily frustration of inefficient software.This is the same story being told by many small business owners around the globe as so many are fed up with large accounting software programs that strain and frustrate the average business user. To be plain and obvious “We don’t want to be Accountants.”Corporate Companies are Failing Daily so Stay Out Of Small BusinessIn a day when so many Large Companies are crumbling what makes any of these companies assume that they know how to create software for Small Business Users. Yes I am being very strong here but the jury has already handed down the verdict and it was already on the wall years before. Lets face it Big Business has become the dinosaur of yesterday so maybe its time to stop listening to all their propaganda.I am a realist so I am not stupid, there may be a time and place for some of the fluffiness they shove in with their propaganda, as sometimes it may actually be useful to maybe five percent of the average mum and dad businesses. But come on what about the other 95 Percent who are now having to get very big shovels to dig their countries out the pile of dung that has been left behind by years of greed, fat cats, deals and politics.It’s the Small Businesses of the world that are going to be bringing all our countries back into the green, so maybe its time to listen to what the average mum and dad want. If I have said it once I will say it again “We Don’t Want to be Accountants” we just want simple easy to use software that does what we need and nothing more, we don’t want all that other stuff as we never use it anyway.We only want to be able to record our income and expenses, account for sales tax, maybe an invoice or two, the odd quote and we want to achieve this without any fuss, without any loss of hair, without any frustration.This is why so many Small Businesses from so many countries are dropping some of the leading brands (highly advertised brands) for simpler software. These Simpler Software Programs do everything they want yet allow them to gain confidence with their own bookkeeping, and best of all there is no need for an Accountant.I am sure that some Big Corporations are waking up and are now taking a leaf out of the book of those companies that are creating today’s Small Business Software, but for the dinosaurs that have not yet woken up and are not listening to their clients I say “Good Bye” as you crumble into infinity