Sunday, March 22, 2009

factoring can help Sustain a new Business

Do you know the three reasons why a small business never gets off the ground? 1) Lack of funds, 2) Fear of failing, and 3) Limited ideas. But foremost, most new businesses just cannot keep going due to lacking the money to stay afloat during the start up phase.

With so many people out of work, many are seeking new start up business ideas. But with the excitement and anticipation of starting something new, there are also many concerns.

It is not just about working hard. One key ingredient is to ask yourself if you are passionate about the idea. It is proven that people who like their work, are more successful. Next, you must determine if there is really a demand for your new product or service. Doing research is critical. Take a look at your competition. Ask questions of others in this business, and do your homework and research, before you invest in the idea. Think about how much money you will really need to start up, then double that, or more. How will you market this new endeavor? How will it be different from others like it? How much money will you need to survive personally, and how much will be needed for the business to survive?

In reality, you need a business plan with a scope of operations, and a budget for how much it will cost. Short term planning is critical, but you may also want to think about three years out.

It can be challenging to pay all the bills on time. And you won't always get the money in on time either!

Accounts receivable factoring can be a huge benefit to small businesses. Single invoice factoring is one of the newer solutions tat provides short-term working capital to growing businesses.

Here's how it works. Because many businesses do not get paid right away for delivered products and or services, factoring will allow some wiggle room. Every business needs some cash on hand in order to sustain and grow. So what happens if you do not get paid for a few months by one client and you do not have time to seek alternative financing through banks or venture capitalists?

Factoring can be the answer to your troubles because it is an extremely fast way to turn your receivables into cash. In an ordinary scenario you might have to wait 30, 60, or sometimes even 90 days for invoices to be paid. But factoring companies look at your customers' credit (not yours) and can pay you the majority of what's owed to you fast. Sometimes even in less than 24 hours.

Invoice factoring will allow your new company to do more business, keep up with supplies, manufacturing costs and payroll, and continue to do more business and stay afloat.

To find out more about how invoice factoring can help your new business, simply search online for invoice factoring.

Kristin Gabriel writes for The Interface Financial Group (IFG), North America's largest alternative funding source for small business. The company provides short-term financial services such as accounts receivable factoring to clients in more than 30 industries. IFG offers expertise in accounting, finance, law, marketing and banking. Go to www.ifgnetwork.com to learn more about invoice factoring.

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