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Future Financial Challenges and Opportunities for Small Businesses

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While the economy has rebounded from the Great Recession, Biz2Credit found big banks still only approve about a quarter of the small-business-loan applications. Many companies are experiencing increased opportunities and funding. Yet, small businesses aren’t enjoying the same spoils. That may make it seem like the future of finance in small business may be more challenging.

Biz2Credit noted small-business-loan approval rates remain stagnant among institutional lenders. Small businesses can always entertain the possibility of earning funds through traditional banks. However, it’s smart to investigate other financing avenues as part of the future of finance in small business.

Many of these newer avenues to financing are poised to disrupt the industry. This is much like the small businesses they support. As financial outlets develop, they are addressing the challenges facing small businesses. However, there are other issues related to the future of finance in small business.

The challenges with the future of finance in small business

Traditional banks and financial institutions are built to service large businesses. This means their systems and processes are designed to assess risk in terms of big businesses with varied resources.

Some of the problems originate from simple data-gathering issues. The data isn’t consistent because three main credit bureaus are deciphering and delivering information about a candidate’s creditworthiness. Underwriting asks for endless reams of data about a business’s revenue. They also want to know about lines of credit and borrowing history. The time spent reconciling that information can also feel endless.

Worst of all, many lenders will use a small-business owner’s personal credit risk as a symbol of the business’s risk. Because these lenders use scoring models designed for either big businesses or individual consumers, they’re forced to try to apply their template for individuals to a small business. This results in the need for lots of judgment calls and system overrides. The more hoops a business owner has to jump through, the more likely he is to get caught in one of them.

That’s the process a small business endures with just one lender. Multiply that by five if an owner is shopping rates, and they are juggling several lengthy processes. Also, they are unearthing different sets of information for each. Because each asks for unique information, it’s difficult for many business owners to understand how they can improve their chances of accessing credit. Thus, they may find themselves in a loop of credit madness, using the same techniques to generate different outcomes and never knowing why.

The options shaping the future of finance in small business

Traditional lenders could be great options for small businesses. However, they would need to develop systems to evaluate small businesses by standards specific to their size and resources. Updating their scoring models, automating data collection, and streamlining their funding processes would benefit both. This would better indicate the degree of success a business could achieve with a lender’s help. Alternative finance, however, offers a window into what traditional lenders might hope to become.

Online lending

Online lenders offer loans similar to bank loans. Yet, they offer a more streamlined product. These loans typically have less stringent qualifying requirements in terms of revenue, tenure and credit rating. Their processes are built on online platforms that allow for application and funding in the same space. Therefore, they demand fewer reviews and offer enhanced accessibility. These lenders eliminate lengthy wait times for qualification. Additionally, they assess more than credit history. Therefore, small businesses do not have to offer extensive collateral.

Kabbage, an online lender, streamlined its application process. They focus on live data connections to analyze a company’s real-time business performance over credit scores.  A candidate must have been in business for a minimum of one year and achieved $50,000 in revenue in the past year or $4,200 per month over the past three months. This allows businesses to access lines of credit up to $250,000 with a free application that only takes 10 minutes.

Kabbage renders its decisions in real time. This means small businesses can use their lines of credit upon approval. It also highlights the benefits for users. Owners can maintain equity and control of their business. They keep their personal finances separate. Also, they avoid alienating those closest to them by accessing funds through a third party instead.

Crowdfunding

Crowdfunding platforms are another alternative financing outlet. This online pitching asks small-business owners to convince others that their companies are worth investing in. Crowdfunding asks people to invest in a given business, product or campaign. But the funds often don’t need to be repaid directly. Small businesses may issue lenders a free version of the item they supported or a percentage of future revenue.

Fundable is a crowdfunding platform dedicated solely to businesses. The site educates users on the fundraising process. They have built guides on crowdfunding, business operations and investing. It prohibits certain types of businesses and charges a monthly rate in lieu of taking a cut of the money earned. Also, Fundable allows users to determine whether they want to give rewards or equity to investors.

Future Financial Challenges and Opportunities for Small Businesses

Invoice factoring

Invoice factoring is an alternative funding method. It relies on outstanding invoices rather than a business’s credit history. In this model, an invoice factoring company purchases a small business’s unpaid invoices at a discounted rate. This puts the focus on customers’ ability to pay rather than on the small business.

BlueVine is a company offering invoice factoring. It has built a streamlined dashboard that allows small businesses to attach the invoices they want funded. Small-business owners can see the rebates the same day. These are advanced at rates of 85 percent to 90 percent of the invoices selected. BlueVine does not require much paperwork.

Online banking

Online banking also defines the future of finance in small business. It simplifies previous processes while enhancing the services of its brick-and-mortar sisters. Banking apps make it easy for small-business owners to keep tabs on their finances with one click. They can handle everything from transfers to deposits without visiting a branch. Many online banking platforms offer services geared specifically toward small businesses. They integrate with QuickBooks and other SMB financing software. Also, these online banks allow in-platform invoicing and payment collection. All these automated services save small businesses time and streamline the tools used.

Chime is an online bank account built to help users save money. Its Automated Savings program empowers entrepreneurs to automatically set aside money or round up their purchases, putting the “extra” into savings. Chime offers real-time transaction alerts and daily balance updates to keep them on top of their finances. And, they can seamlessly transfer funds between accounts, pay bills and issue checks. Unlike many big banks, it doesn’t charge monthly fees, overdraft fees or transfer fees. Also, users don’t have to maintain a minimum balance.

Small businesses aren’t earning funding attention at the same rate as their bigger competitors. To avoid the roadblocks of trying to compete with big businesses that have vast resources, small businesses should consider alternative financing.

Source Article: www.entrepreneur.com

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Reasons to Work with an Employee Benefits Consulting Firm

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A competitive employee benefits package is critical to acquiring and retaining quality talent in your company. But, there may come a time when creating one becomes a tedious and complex task, especially for owners who are not as knowledgeable about dealing with its many factors. Other than brainstorming what to include, you need to know how much do employers pay for health insurance,so you don’t accidentally overspend.

When the going gets tough, employee benefits consulting firms are your solution. They know well how to maximize benefits while minimizing costs. To understand more about these firms and why you should hire them, check out our list below:

Create a Competitive Package

Many employers believe that a great salary is all it takes to land top talent. Little do they know; employees look beyond big paychecks and want to see the compensation and benefits a company can offer them. The better the benefits, the more likely they will accept your job offers and stay.

Various businesses strive to create the perfect employee benefits package to help them fish for the best workers. By hiring an employee benefits firm, you can receive guidance on making the most competitive package that works best for the employer and the workers. They’ll also ensure your benefits remain compliant with laws, offer tax advantages, and the types you should include.

Gain Access to Expertise

We all want to receive the most desirable advice when making crucial decisions for the sake of our organizations. Putting together an effective employee benefits package is no walk in the park, and because it plays a pivotal role in the competence of your business, you don’t want to make a mistake.

Employee benefits consulting firms have consultants with years of experience, knowledge, and hindsight on every prospect of compensation and plans that work best for your firm. They know the ins and outs of every insurance agency and give you all the information you need to understand the complexities. Employee benefits consultants can also show you practices to help you comply with various laws and regulations.

Partner with Health Compass Today!

You can save $1000 per employee through the right innovation and management. Do you want to know how? Schedule a free consultation with CEO and Founder Donovan Pyle from Health Compass through their website https://healthcompassconsulting.com/.

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Can I implement ISO 9001 without a consultant?

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ISO 9001 consultant

Yes, it is absolutely possible to implement ISO 9001 in your organisation without the help of a consultant. However, here comes the mind blowing fact that might change your decision to hire a consultant- there is no guarantee about the efficiency of your Quality Management System (QMS) if you implement ISO 9001 on your own. In this article, we will talk about why hiring an ISO 9001 consultant is beneficial for you and your business.

Who is an ISO 9001 consultant?

Simply put, an ISO 9001 consultant is an individual who has undergone specific training in the development of a QMS as per the requirements of ISO 9001. This individual also has real-life experience of implementing, troubleshooting, modifying and evaluating QMS in different organisations. Therefore, it would not be wrong to call them experts of quality management and ISO 9001 requirements.

Why should you hire an ISO 9001 consultant?

It all boils down to expertise. If you, as a business owner, are familiar with the requirements of ISO 9001, then you will have no trouble understanding the clauses and selecting the ones that are relevant to your organisation. However, if you are a novice, you will find the same task excruciatingly painful.

Similarly, if you are familiar with quality management principles, you will be able to build a QMS that focuses on the needs of customers, has a lean approach and is continually improving. Unfortunately, without the real-world experience, your QMS will have rudimentary functionality.

1.Save time and effort

Hence, if we have to summarise why you should hire an ISO consultant, it can be said that an ISO 9001 consultant will save you precious time and effort, allowing you to achieve first-time compliance. Without their expertise, the certification process, especially aligning the documents and identifying hidden non-conformances, can become time consuming as well as overwhelming.

2. Professional performance

In addition, advocates of hiring ISO 9001 consultants also push forward another compelling argument. They say that even if business owners have the expertise or experience with ISO 9001, they should still hire an ISO 9001 consultant, as it helps conserve energy.

See, as a business owner, you are already have to juggle a lot. It makes no sense to focus your energy on a certification process that can easily be delegated to someone with expertise. Your energy is better utilised in envisioning your future aspirations.

3. Experience identifying opportunities

Lastly, the advocates of hiring ISO 9001 consultants also have another argument, stating that an ISO consultant will bring with them a “fresher set of eyes.” To understand the importance of this statement, it is necessary to know that a QMS is just not focused on identifying risks, but it also uncovers hidden opportunities.

So, something that is not so apparent to you, will be extremely evident to a consultant who has immense real-world experience in your industry. As a result, you will be able to explore opportunities and expand your business.

Benefits of ISO 9001 consultant

There are many benefits to hiring an ISO 9001 consultant, including:

  • Faster implementation: ISO 9001 consultant saves you precious time and speeds up the implementation process of your QMS. In fact, many ISO consultancy services claim to help you achieve certification in less than a month.

  • First time compliance: Due to their expertise and experience, there will be no non-conformances in your QMS, thereby guaranteeing first time compliance.

  • Identification of skill-gaps: ISO 9001 consultants conduct a gap analysis within your organisation to identify any inherent skill gaps. Additionally, they will suggest training programmes so that these skill gaps can be appropriately mitigated.

  • Better documentation: Their expertise helps you align your documents as per the requirements of ISO 9001.

  • Troubleshooting: As your QMS is in its infancy, it will encounter small obstacles. This is the nature of any management system that is absolutely new. With the help of a well experienced ISO 9001 consultant, you will be able to troubleshoot, modify and improve your QMS.

  • Better performance of your QMS: ISO 9001 consultants will suggest you industry-specific corrective actions that will further improve the efficiency of your QMS.

How to choose an ISO 9001 consultant?

With so many ISO 9001 consultancy services, it can become overwhelming to select an ISO consulting service that is a perfect fit for your organisation. Before you even begin your search, we recommend that you sit down, take a breath, and clarify your expectations.

Do you want an ISO 9001 consultant who acts as a leader and coordinates activities between your team members, or would you prefer someone who is willing to get their hands dirty and actually sit with you in every step.

This is highly dependent upon the current nature of your management system. If you already have a decent management system, you would require a consultant who acquires the role of leadership, whereas if your QMS is still rudimentary, you would need a subject matter expert. Additionally, the criterions that you should factor in include specialisation, experience and ethics. ISO 9001 consultant should have considerable amount of experience in your industry and should not be willing to take any shortcuts.

Conclusion

Yes, it is absolutely possible to implement ISO 9001 without a consultant, however, there is no guarantee about the efficiency of the QMS. Hiring an ISO 9001 consultant saves business owners time, effort and energy. Focus on the specialisation, experience, ethics as you select your ISO 9001 consultant and ensure that you have a good idea about what role you want the consultant to play in your business.

If you are looking for ISO 9001 consulting that has expertise, experience and commitment, we suggest you to use ISO Counsel services. For more information about cooperation, costs and time required for ISO 9001 implementation, visit isocouncil.com.au website.

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