With the advent of internet and home based entrepreneurship, numerous avenues that did not previously exist have been opened for the aspiring women entrepreneurs. A case study even points out that 50% of women between the age group of 18-24 wish to launch their own businesses. While the acumen of female driven ventures is being acknowledged everywhere, do we see an adequate rise in the sources of funds or business loans for women?

According to the National Association of Women Business Owners (NAWBO), Public Policy Survey of its women members still relies on personal savings as their main source of business funding and they often don’t apply for business credit because they believe they will be turned down.

104 million businesses in America are majority owned by women. These businesses have created more than 12 million employment opportunities and have produced more than a trillion dollars in sales revenue. There is a much felt need to encourage and educate women entrepreneurs in finding finance opportunities to start and sustain their businesses effectively to ensure a steady growth of the economy.

A plethora of government agencies and financial organizations are willing to offer assistance to women entrepreneurs but to avail these the business women must learn about the types of financing available to them. There are numerous sources of funds which can be explored.

Secured loans

These loans are backed by collateral by the loan seeker. This is to ensure the repayment of the loan in time. If there is a default of payment the collateral gets confiscated and the money recovered by selling it.

Unsecured loans

These loans come without collateral but have a very high rate of interest as compared to secured loans. The financial background and the credit history have to be really good in order to be eligible for these loans.

Microloans

These are small sized loans, generally given for start-ups and come with a specific small time for repayment. The amount ranges from $13,000 to $35,000. Banks can be approached with an SBA (Small Business Administration) backing.

Grants

Various state or local programs for funding can be explored. The Non-profits, the state and the local government keep coming up with funding women entrepreneurs. These options need to be found and combined with other means of funding.

With the above mentioned sources of finance the women business loan seekers should keep in mind that unless and until they meet the eligibility criteria put forth by the granting authorities, the chances of their loans being sanctioned are bleak. Generally the banks look for a good credit history, a solid business plan, education, past experience and proof that the business is bound to succeed.

Last but not the least, there are plenty of funding options to sustain the eligible female business owners from commercial loans to grants aided by the government. These women entrepreneurs must be prepared and willing to seek the required financial assistance.

Did you like this article?

1. Please share it with your network, we’d really appreciate it!
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images: “Young businesswoman multitasking isolated on white  / Shutterstock.com“

ZDNet, on the other hand, defines pretexting as “misrepresenting your identity to gain access to privileged information.” For AllThingsD, pretexting means a “fancy word for impersonating a person to try and get access to their cellphone billing records” while in the UK, pretexting is also known as “blagging” or “bohoing.”

Hewlett-Packard scandal

The biggest case of pretexting scandal happened when an independent investigation firm had interrogated Hewlett-Packard’s board of directors using the method of pretexting.

In this particular incident, the motive of HP’s head honchos was to weed out information about who had leaked HP’s strategic plans to the media. Although this does not mean that the Average Joe will be victimized in this particular use of pretexting he may not be spared from pretexting by the Average Joe Identity Thief either.

Late night phone calls

Pretexting, in the context of identity theft, may involve a phone call in the middle of the night, asking the Average Joe or Average Jane Victim about their credit card information, bank accounts, or even SSN. The victim gets a call in ungodly hours for one reason: they are more likely to be less alert, and therefore more prone to disclosing pertinent information. The moment the vulnerable average victim gives up their data thanks to a successfully carried out pretexting scandal, the process of identity theft would then be set in motion.

The Average Joe Identity Thief can perpetuate identity theft himself, robbing his victim of hundreds to thousands of dollars over time. Or, he may sell Average Joe or Jane Victim’s data on the black market, make good money, and the poor victim gets ”pretexted” many times over by the identity theft criminal who bought their details.

Either way, there is no doubt that either Average Joe and Average Jane needs privacy protection, and needs it badly.

Here are some measures to avoid being a victim of pretexting scandal in the middle of the night:

- Turn off all your phones, whether landline or mobile, while you sleep. Yes, somebody may die in the middle of the night, but their kin can always text and let you know in the morning. Unless you’re a doctor on call, a policeman, or a firefighter, honestly, you don’t need to keep your phones on all night long. By turning off your phones, you get to conserve batteries as well.

- You may use a call screening service. Call screening allows you to accept phone calls only from certain people in your calling list. Calls coming from other numbers will then be automatically rejected. This will ensure that potential pretexting scandalperpetrators will automatically be given the runaround with their calls.

Credit monitoring

More than keeping measures with how to protect yourself from pretexting attempts, there is another layer of privacy protection that you can make use of: credit monitoring.

Here is how credit monitoring helps: The moment you become a victim of identity theft, you will be notified as suspicious activity is detected on your accounts. You will then be able to take it from there, possibly ordering a credit freeze or an account lock or cancellation. You may then be able to dispute the transactions as they happen and appear on your report. This way, identity theft is nipped in the bud.

Identity theft is a devastating crime, especially when you become the victim. You have to protect yourself, whether through arming yourself with learning how credit monitoring helps and applying it to your accounts, through monitoring your accounts manually on a daily basis, or probably even putting a credit freeze on your accounts. If you prefer, you may even want to cut off the use of all of your credit cards and go completely debit. However, debit does carry the danger of not being insured properly, plus, when you lose money; you lose YOUR own money.

Other types of identity theft

Aside from being a victim of a pretexting scandal, here are other ways that your data can be stolen from you:

• Via mail theft, when your mail gets stolen by a potential identity theft criminal.
• Via trash theft, when documents in your trash get stolen and your details lifted off them.
• Via document theft, when someone, especially someone you know, takes your documents and uses your details to commit identity theft.
• Via skimming, when someone skims your card at a commercial establishment, or if you attempted to withdraw from an ATM machine rigged with a credit card skimmer.
• Via online identity theft, as you become a victim of phishing.

Take note of these ways of becoming a victim of identity theft and remain vigilant with your accounts. Familiarize yourself with how credit monitoring helps, and promote your own privacy protection.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”Masked hacker wearing a balaclava sitting at a desk downloading private information off a computer  / Shutterstock.com“

Borrowing from a bank is generally much cheaper than borrowing from other sources such as asset based lenders and factors. Whether your company is attempting to establish bank credit for the first time or you are looking to increase your existing facility there are several things you can do to increase your chances of achieving your objectives. These actions fall under three general categories.

# 1. Know your bank(s)

I use the plural for banks because you should approach more than one bank. Nothing succeeds like competition in any field and that certainly applies to banks. Many business owners will shop for a provider of IT services or of other business services, but fail to bring the same element of competition to a bank situation. This is probably due to the incorrect notion that all banks are the same.

Banks that make your go-to list should be large enough to handle your needs, but small enough that your business is important to them. You should get to know the banks, their lending standards, the approval process and timing of, other companies in your industry they lend to, the health of the bank in general

Don’t take the bank’s word for their answers to the above questions. Check them out with other clients and look at publicly available documents. These documents will tell you if they have increased their commercial lending, whether they have a bad loan problem, a sure sign they will not be increasing their lending at any time soon and the general health of the bank.

# 2. Be prepared

Prior to approaching your target banks, prepare a list of important documents to give each bank. This will speed up the process and will also show that you are professional and well prepared. These documents should include but not be limited to the following:

• Three years financial statements either audited or reviewed.
• Three years tax filings.
• At least a one year forecast (3 years is better).
• Latest Accounts receivable and payable ageing.
• An executive summary (see below).

# 3. Do part of the bank’s work for them

Prepare a 5 to 6 page executive summary for the banks. This is your chance to tell your story in the best possible light. Sections should include the following:

1. History and background.
2. Product and/or service.
3. Market discussion.
4. Senior Management.
5. Discussion of historical financial results.
6. Discussion/explanation of forecasts.

This executive summary allows you to explain your forecasted growth, any problems that are evident, and most importantly, how the bank will be repaid. It will greatly increase your chances of obtaining your goals and allow you to drive the process.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”The glass wall of the building with the inscription Bank / Shutterstock.com“

Protection of Income

Excellent disability insurance policies are designed to guard and protect the small business owner against loss of personal income. This is done by providing a percentage of the pre-disability value of income earned by the policy holder. This type of disability insurance is meant to help the small business owner, or any of his covered partners, to have funds for payment of daily living expenses that may occur.

Business Overhead Protection

When a small business owner is injured or seriously sick they have more than personal expenses to worry about. They must also pay ongoing overhead expenses following the event that caused disability. A good business disability insurance policy covers business overhead for things like building lease payments, rent expense, payment of taxes, staff salary payments and other overhead expenses that must continue to be paid. These things are necessary to be paid properly, even though the business owner has become disabled, temporarily.

Special Key Personnel Disability Insurance Coverage

If a small business depends on more than one owner, or key individual, for proper operation it is advisable for the business to have key person disability coverage. This type of coverage pays money to the company if any listed key person is deemed to be disabled and unable to work. The monies from this coverage can be used to hire a temporary replacement or outsourcing of some duties of the disabled listed key person. These policies are owned by the business and not by any of the key personnel. The company pays the premiums and benefits in case any key person listed is disabled.

Special Buyout Disability Insurance Coverage

It is not unusual for business partners to have buy/sell agreements drafted by attorneys to set out pre-arranged agreement on what should happen in the event of death or permanent disability of one of the business partners. Typically, the surviving business partner(s) will purchase the disabled, or deceased, partner’s interest in the business. This might be between the partners or take place between the remaining partners and their estate. This type of special disability insurance guarantees the business that money is available to complete these pre-arranged buy-sell arrangements, even in the worst case.

Have you thought about the purchase of disability protection for these various possibilities? What are your thoughts on the need for this type of protection for key individuals, business partners and small businesses in general?

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”Photo of a mature businessman with injuries talking on the phone whilst trying to work on his computer.    /Shutterstock.com“

Save a part of your income

A good technique to maintain one’s personal finance is to save a part of the income that a company earns. It means that all cash should not be disseminated by paying employee salaries, client’s dues and repaying earlier debts. So, at times when the going gets tough, the tough get going with personal finance. The saved money serves as ‘spare capital’ to fulfill the immediate financing needs of an organization.

Work on income and tax strategy

For a business it is compulsory to earn revenue. But it has to be done in a way that it saves on taxes. That means the business owner should operate the enterprise in a way that minimises taxes which are due to be paid. It can work on tax reductions by embracing things that help to “lessen” taxes. For example, balancing salaries of employees, working on pension schemes, health insurance schemes and thinking about dividends can help a company save on taxes. The method can be any but the idea is to arrive at an income strategy that is tax efficient. The right tax strategy of a company will ultimately help to build personal finances and so the entrepreneur will have more in-hand cash.

Hire trusted financial advisers

In a company’s daily operation, a Financial adviser is almost inevitable. Moreover, accountants and Financial advisers are found to maintain a good rapport among themselves. This is good for the company as they work together to help build the personal finance of the entrepreneur. It is good to hire such professionals as then the company’s success path becomes well defined.

Don’t overlook petty things

A business owner may incur a little more tax if he maintains a current account rather than a savings account. This may seem to be trivial to an entrepreneur. But in the long run, it can lead to a significant tax cut from one’s savings. If saved, the money could have served the company in several ways. At least, it can definitely serve to meet small expenses such as the illness of the owner or some other daily personal expenses. Planning out Personal finance can certainly help to meet the small expenses of life.

Pension schemes can be vital

Pensions should not be neglected under any circumstances and financial advisers will assist you with this. It helps to build the personal finances of an entrepreneur. The result is it accumulates a good capital that an entrepreneur can use to sustain his business at times of emergencies and later on it supports the entrepreneur in his retirement life too. The money that is saved from pension schemes adopted by the entrepreneur can help a business to retain its growth potential and also helps the entrepreneur to overcome difficult times in life.

Don’t just read this post and forget it. Use the advice to implement in your business and the results will be evident.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ” Graphic of a Personal Finance Street Sign on Cloud Background   /Shutterstock.com“

Find Insolvency Professionals to Help

One of the best things any business owner can do is find insolvency practitioners to help with the process. The professionals can offer advice on the best option available and whether it is possible to continue trading. If a company is still viable or shows that it can be viable in the future, there may be options to sell it onto someone else within the company to keep it trading.

Insolvency practitioners understand the Insolvency Act 1986 and will be able to act within the terms of the law. This is essential to avoid wrongful trading; trading even though you know it is impossible to pay off the debt owed.

Understand Where You Have Gone Wrong

Bankruptcy is often considered the best option when company owners struggle to clear debts and become insolvent. However, this is not always the case. It may be possible for a business to become viable again. When the business cannot be saved, the owner may want to look at other business ventures. The problem is understanding where you went wrong.

You need to know how the financial issues came about. Were they from poor management? Was it due to cash flow issues? Understanding the problems will help to prevent them happening a second time. It helps to find alternative ways to trade or work to avoid cash flow and financial management ever creating something negative. Without acknowledging your failures, you will be doomed to repeat the same cycle again.

Separate Personal and Business Lives

It is difficult, especially when you create a business from scratch, but it is important to separate your business and personal lives and feelings. This not only helps with dealing with the bankruptcy but also stops it affecting your personal finances. Being linked to your business personally will mean that you become personally liable to pay off the money owed to creditors. This is something to think about for future reference.

Seek Debt Advice as Soon as Possible

Financial problems do not happen overnight. They take time to develop. You may have started to ignore notices from creditors or found ways to avoid paying them for as long as possible. It is important to seek debt advice as soon as possible to prevent the problems causing bankruptcy. This will help you keep your business trading and help it to become viable again. Insolvency professionals will be able to help with this, along with financial advisors.

Dealing with your business going bankrupt is heartbreaking. You put all this effort into it and it fails. However, you need to acknowledge why it happened and seek advice as soon as you can, whether debt or insolvency advice. This will help you find the best options, find possible way to keep trading and prevent the issues occurring again.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”Bankruptcy concept with judge’s wooden gavel and petition notice / Shutterstock.com“

Surveys by the Exit Planning Institute indicate that North American business owners planning to retire over the next 10 years will generate over $10 trillion in personal liquidity (VIP Forum 2005)… if they successfully find buyers for their thriving businesses. Developing an exit plan is essential if you want to be ahead of the pack, and attract a buyer who can pay you what your business is worth.

Exit planning can be complex, and it takes time. For a business with $2-$10 million in revenues plan to spend a year or two prepping for a successful sale.

But the ROI from good planning could mean the difference between fire sale pricing for your assets, or reaping the full financial and personal rewards associated with seeing your venture carry on successfully for years to come.

Size Matters!

How Small is Small?

If your  revenues are roughly $2 million/year or less, you’re likely going to sell your business  for the fair market value of your assets, which could include some of the goodwill in the business. For example, if you own a dry cleaning business, flower shop or catering company, prospective buyers want to  generate an income doing something they love using the location and assets you’ve established.

Your buyer may need bank financing to supplement their own capital.  And if they don’t have enough cash to close the sale plus put  cash in the kitty for 3-6 months of operations, you’ll likely need to help finance the purchase. That means you accept the risk of being repaid for a portion of the purchase price over time by the new owners. This is often an important measure in closing the gap between the buyer’s offer, and the seller’s price.

A professional accountant should be able to help you get prepared for the sale and also estimate a reasonable price for the business. Business brokers and trade publications are both good options to attract potential buyers, and you’ll want to get legal advice about how arrange the sale while protecting your interests.

The sale price of your business will depend largely on local market conditions, and how confident a new buyer is that they can generate the same level of profit you have. Willing buyers and sellers will generally arrive at a fair price. Compelled sellers may be forced to accept less than fair value.

Super-Size or Regular?

For mid-sized private businesses it’s money well spent to  develop a comprehensive exit plan. You’ll walk away with more jingle in your jeans, and avoid a nasty date with the tax man somewhere down the road!

If your business generates $2-$10 million/year in revenue a year, and employs 20 or more people, the exit planning process is a bit more complex. Even if you plan to transfer ownership within your family, your pocket book and peace of mind with both benefit from a solid exit plan.

Money Making Exit Plans Have Six Essential Elements

I spoke with Gerry McCracken of Dialectic Business Solutions Inc. to ask about best practices in exit planning. Gerry is both a Chartered Business Valuator (CBV) in Canada, and a Certified Exit Planning Advisor (CEPA). We know each other from our days working at the bank, and doing some equity work together, so I trust and respect Gerry’s advice.

Based on information from the Exit Planning Institute, Gerry’s input, and my experience coaching business owners, here are some things you’ll want to consider when planning your exit strategy.

# 1. Clear Outcomes

Deciding what your goals are is the first step.  This usually takes a bit of soul searching and weighing options such as:

• Do you want to maximize your personal gains through a sale, or ensure future generations of your family carry forward in the business?

• What would you like to see happen to the people who work with you, and who have helped make your business the success it is today?

• What does retirement look like for you – and how much capital and monthly income will you need to make your life comfortable?

• Are you prepared to help finance a new owner? If so, what level of involvement can you accept?

# 2. Risk Mitigation

Imagine leaving your grieving family with a successful business but no one to run it? Or surviving a natural disaster like Hurricane Katrina and then going broke because you need 6 months to get up and running again?

Here are a few of the basics when it comes to risk mitigation:

• Shareholder Agreement. If there is more than one shareholder in the business, a shareholder agreement is critical. If  other shareholders are involved in the day to day management, chain of command succession should be addressed.

• Contingency Plan. Leave clear instructions about who should succeed you in the direction of the company, especially if these key people are not shareholders. Contingency planning should form a regular part of  management planning. Get this stuff out on the table now to avoid problems that can sink your business later.

• Business Interruption Insurance.  This provides you with cash flow if Mother Nature deals you a one-two punch, or other disasters knock your operations off line.

• Key Person Life & Critical Illness Insurance. These coverages pay money to the company to support lost revenue or expenses incurred when an owner or other key member of the leadership team dies of suffers a prolonged illness.

# 3. Baseline and Enhanced Value

Maximizing the value of your business helps attract buyers, and makes your transition smoother. Not to mention it plumps up your bank account quite nicely too! But how do you know what your business is worth to a prospective buyer? And how do you maximize that value?

Here’s how to put some credible information on the table.

• Establish Baseline Value. Selling your business as a going concern implies your buyer has the expectation of future profits. That’s far different than simply the value of your assets. In fact, if you are in a service business such as IT consulting or accounting, the value of your assets will be very low compared to profits your company produces. It’s a different perspective if you’re in a capital intensive endeavor such as manufacturing, although your goal is still to ensure the business is valued relative to its ability to generate cash and profits. Engaging a qualified Business Valuator is the best way to establish a base line value. Valuators can also assist with financing advice, and value enhancement strategies.

• Maximize cash flow, and profits. Seems obvious right? Keep in mind prospective buyers will likely need financing. That means you need a steady track record of profitable operations and strong cash flow to attract a buyer and position them to secure financing.

• Ensure financial records are up to date and accurate. You’ll need at least review engagement financial statements (larger business may need full audits) to work with a 3^rd party purchaser, as well as for bankers and/or investors. If you don’t currently have at least review statements, work with your accountant to identify any record keeping or management issues that need to be cleaned up so the due diligence process goes smoothly.

• Optimize systems and processes. The more the business runs on autopilot the smoother day-today operations are. Potential buyers and investors look at how well the business runs when you’re not there. And since you may retain an ownership position, or carried interest in the company to help finance the transaction, you have a vested interest in making sure things run smoothly when you’re not at the helm.  Flattering as it may seem to be indispensable to the business, it can be a handicap to selling it.

# 4. Clear Up Potential Obstacles

Getting your legal matters in order helps avoid surprises that can delay or derail a sale. A couple of things you should look after are:

• Share or asset sale. Buyers usually prefer to buy assets, while sellers would rather sell the shares. This is generally a tax driven decision, but could affect the price by a significant amount. Be clear on how the transaction is to be structure before settling on the price. Advice from tax experts is needed here.

• Ensure you can exit or transfer legal obligations. If you have a personal guarantee for a lease or bank debt, will you be able to retract it or transfer the obligation to new owners?

• Transfer title to assets that won’t stay in the business. Do you have assets in the company name that need to be transferred – say your lux guest home in the Bahamas? Or the SUV your kid drives to college?

• Examine your shareholder agreement or decision making process. Establish the legalities of decision making, including any shareholder or director resolutions that you can put in place now. Having a buyer at the table only to find a major decision maker isn’t happy is a waste of time for everyone.

# 5. Action Plan

There may be 100 ways to leave your lover, but options to divest your business are not quite as plentiful. Here are the most common ones:

• Transfer ownership to family members. If your plan is to keep your business in the family, there are some important and often contentious questions to consider. For example, if Junior takes over, do you have other children you need to fairly provide for as well? And, is Junior ready to run the show? How much, or how little, do you want to be involved after you retire, and how much of your net worth do you need to recover right now to finance your retirement?

• Management buy outs. If your long term plan has been for key people in your leadership team to buy you out, you’ve likely  been grooming your successors, and helping them build equity for some time. If not, you’ll need to decide when and how to approach this conversation and who you’ll extend the offer to.  Managing the ripples that occur around planned changes in ownership is vital to protecting your business before and during the transition.

• Sale to third parties. Business owners often have a short-list of prospective purchasers in mind. Competitors, suppliers and other businesses with natural synergies are all good candidates. But knowing when and how to approach your prospects, and what information to share, takes some planning. You don’t want your best customer getting spooked, or your top 2 employees jumping ship because they don’t know what’s going to happen to them.

• Liquidate your assets. Sometimes there just isn’t a viable option to sell your business as a going concern. If you’ve looked at all the angles and still can’t find a deal that works for you, winding down and selling the assets may be the best thing. Timing is important to ensure you’re able to repay debt, and exit long term obligations such as leases for equipment or premises. You’ll also need to decide when to break the news to your employees, customers and suppliers so all parties can manage their interests appropriately. Not easy, but it can be done.

# 6. Marshall the Troops

McCracken suggests that getting your business ready to sell is a bit like playing golf. A great caddy can advise you about the course and obstacles, and hand you the right club to play … but it’s up to you to take the swing.

As a business coach I endorse this view of things – it’s a big help to have an advisor who understands your needs completely, and will help you bring in specialists as needed.

So who do you need on the team to make your exit successful?

• Exit Planner. Your advisor needs to help you, your family and other vested parties reach agreement about desired outcomes and how to proceed. No small job at times! You advisor should have a sophisticated understanding about business structure and operations, but even more importantly you need to trust they are your ally in developing and executing a comprehensive plan.

• A Qualified Business Valuator. Hiring a qualified valuator is the best way to get an informed, impartial opinion of the value of your business. Training for Business Valuators is rigorous, so you can have confidence they won’t just “guestimate” what your life’s work is worth. Make sure you see the valuators qualifications and credentials before engaging them. A stopped watch is only accurate twice a day.

• Professional Accountant. When it comes to business taxation, corporate structure and related matters you want the best advice you can find. With tax rates in excess of 50% on capital gains in many countries, minimizing tax obligations is a big ticket item.

• Legal Advice. Experience is just as important when it comes to selecting the lawyer you work with. There is a lot of interplay between legal and accounting decisions so hire professionals with a track record of effective collaboration. The closing date on the sale of a business can be a very tense time – having a savvy lawyer with strong negotiation skills by your side can make things go a lot more smoothly.

• Wealth Management. Getting sage advice on how to invest the money you receive from the sale of your business provides peace of mind over the long haul. After all your goal is to enjoy retirement, and your new adventures, right?

Making a Grand Exit

With exit planning, as with golf, every shot has to be played where it lies. And just like golf the round has to play out until it’s in the cup…there are no gimmes.  So take a long view of things, get the help you need, and play the game of your life!

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”A blue road sign with white text saying Exit Strategy/ Shutterstock.com“

The study shows that the younger generation’s payoff rate of their debt is approximately “24 percentage points lower than their parents’” and roughly 77 percentage points lower than their grandparents’ rate.

Lucia Dunn, co-author of the study and professor of economics at Ohio State University, cited several reasons for the results, among them changes in interest rates, more readily available credit and less stigma attached to having credit card debt.

According to Dunn, Americans — young and old — should be concerned about the research results, stating that if they continue to consistently come out with similar findings, America may have a financial crisis in the future, particularly among elderly people who cannot pay off their credit card debt.

This is why, even at a young age, one should learn how to be financially savvy.

Why monitor your credit

If you want to have a healthy financial life, it may be best to know how to make and stick to a budget; maximize your cash flow and minimize your expenses whenever possible; set aside part of your income for savings and investments; and monitor your credit — among other things.

The latter may actually be one of the most important action steps you need to take to be considered financially healthy.

If you don’t monitor your credit properly, a number of things could happen. You may easily incur bad debt, which can in turn give you undesirable interest rates when you take out a student loan, a car loan or a mortgage. You might not be able to lease that apartment or office space that you want. It may even prevent you from getting a good job.

It makes sense then to know the basics of your credit report and related score, the attitudes and actions that could affect that score, and the different services available that help you monitor your credit.

Some people, however, may not take the importance of credit monitoring seriously — a mistake which they may regret later on.

Jane White, author of America, Welcome to the Poorhouse: What You Must Do to Protect Your Financial Future and the Reform We Need, shared her personal experience on the Huffington Post, when she discovered that she had “less-than-stellar credit reports despite having a stellar credit history.”

Upon checking her credit reports after a relative’s application for a credit card had been declined, White found out that her records showed totally false information — she supposedly had a “short credit history” and “high revolving balances.”

White’s experience just goes to show that credit monitoring is truly important.

How to monitor your credit

Jeff Hindenach, in an article on the Huffington Post, suggests checking your credit score regularly. Although you may follow all the guidelines for maintaining good credit, other things may affect your credit score, like your identity being stolen and credit being open in your name.

Checking your scores regularly — Hindenach recommends doing so at least once a year, or a few months before you plan to apply for a loan —  may even help prevent credit fraud. If you are able to detect irregularities or errors in your credit report as soon as they appear, you can report them to the relevant agency immediately.

In fact, it may even actually be possible to prevent identity theft with credit monitoring.

When checking your financial statements, look carefully for charges you didn’t make. When going through your credit reports, check if you have accounts listed that you didn’t open yourself — if there are any, you may have become a victim of identity theft.

If you see any inaccurate information or suspicious activity in your reports and statements, have them removed.

You may also want to consider signing up for commercial services that will monitor your credit reports for you. You will have to pay for this, of course, so make sure you understand what services you’re getting beforehand.

Protect your personal information at all times

Whether you choose to monitor your credit with credit monitoring service providers or on your own, you should be aware that while credit monitoring might contribute to identity theft prevention, credit card fraud is just a part of the bigger problem of identity theft.

Credit monitoring may help you discover problems before they worsen but will not completely stop thieves from using your Social Security number or other personal data. This is why you should always be careful with sensitive personal information.

Be financially healthy — count the ways

While avoiding bad debt and monitoring your credit are important for a healthy financial lifestyle, you must also keep in mind other important factors: being able to distinguish between needs and wants; knowing how and where to invest; having the discipline to save and build an emergency fund; and, of course, paying bills on time.

How about you? Do you have any useful tips to share? Please feel free to leave a comment in the comments section. Also, if you have found this post useful, do share it with your friends by clicking on any of the buttons below.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ” illustration depicting a sign post with directional arrow containing a credit score concept   / Shutterstock.com“

Business partners and life insurance

Not all businesses are a one-man deal.  For the most part, it involves partners or a group of people who run various tasks in the business . One partner might be on the product-development side, the other might be on the financial side, and the other on overall business strategy.

Google, per se, runs on three heads – the two co-founders Larry Page and Sergey Brin and their former CEO now executive chairman, Eric Schmidt.  But in the unfortunate event of someone dying earlier than expected, it could cause a dramatic decrease in revenue for a company.

Google may have a solid-rock foundation and pinch hitters who can step in, but what if your company doesn’t?  Without life insurance, the business might suffer after a premature death of one of the key persons.  While some companies believe that this type of planning is important many put the planning off and do not see key man life insurance as an urgent business matter that needs to be taken care of.

Life vs business insurance

How does life insurance in a business really work?  In individual life insurance, the policy will be able to give out funds to support your family, which may serve as a replacement for your income.  The same goes with life insurance for businesses – they can help ensure funds so the businesses will go on. For example, if you lose a key employee, you can have money to keep the business going while you search for a replacement.

Which life insurance policy?

As a business owner, you may also want to consider the type of  life insurance policy you would want to get.

1. The first and simplest policy would be a term life insurance policy. Term life is fairly basic. You choose how much coverage you want, and for how long of a term you want coverage in place. For instance, if you had an employee that was extremely valuable to the business, you might ensure his life for a million dollar policy that can support the operations of the business until he was replaced, or perhaps you would use the funds to retire and shut down the business if the business can not run without that key employee. Term policies cover the business for a set amount of years and are cheaper than permanent policies. You can also use life insurance as an incentive to keep key employees – known as “golden handcuffs”. This would require a permanent policy with cash value.
2. In a case where you want to make sure an employee doesn’t leave the company, you can purchase a whole life policy on the employee. The employee has to stay with the company a certain amount of years, and if he/she does, they would be able to take ownership of the policy and utilize the cash value and death benefit for their family. In permanent life insurance policies, as long as you pay the premiums, the insurance will be kept even for a lifetime.  Corporations buy life insurance on their executives all the time, and these are known as executive bonus plans. Life insurance is also used in business to fund the buy/sell agreements between partners.

Most people are aware of the many uses of individual life insurance, but are not aware of the uses of life insurance in business. While most business owners focus heavily on the growth of their business, they often neglect to focus on important issues that may affect the future of their business. If you are in this situation, take time out to evaluate your business and see if it makes sense for you to use life insurance to protect and grow your business.

Don’t put it off, put it on your to do list, and take the time to make sure your business, your income, and family are properly protected.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ”Road sign to business insurance  / Shutterstock.com“

However, even freelancers that have a constant stream of clients coming through the door may need to up their rates at some point. This could be because:

-          The cost of materials has increased

-          Their general cost of living has increased

-          Some of the freelancer’s higher-paying clients have gone elsewhere, leaving them with a group of smaller clients

No matter what your reason for needing to increase your rates though, you can guarantee that it’ll be quite a stressful time for you. Not only will you need to carefully consider your rate increase to ensure you get the right amount and don’t need to increase them again later in the year, but you’ll also want to second-guess your clients’ reactions.

This, however, can be easier said than done. There is a way to increase your prices without losing your clients though, and here’s how:

# 1. Follow the band aid method

As they say, it can be easier to remove a plaster all in one go rather than slowly peeling it off. The same can be said of your rate increase – do it quickly and you’ll see minimal fallout.

Say your current rate is £X and you need to increase it to £Y, which is a hefty 50% higher than your current rate. Slowly increasing your rates from £X to £Y over a number of months could make your clients feel displeased, as they will never know when the next increase is coming. Going from £X to £Y in one go though, may take them by surprise initially but they will quickly become accustomed to your new rate.

# 2. Be honest

Honesty is without a doubt the best policy in this situation. There’s no point lying about your reasons for increasing your prices – let your clients know exactly why you’re doing it and they’ll be more likely to stick by you for your truthfulness.

If you have to increase your prices because of the cost of materials, give them a real-world example that they can understand. Explain how the cost of materials can accumulate and how they are essential for your work.

# 3. Thank your clients

When increasing your rates, thank your clients for their commitment to you over the time they have contracted out to you. Explain how much it means to you that they have chosen your work, and let them know that you plan on working even harder with your increases. Acknowledge the fact that they too may be going through their own money problems.

# 4. Give them something for nothing

And of course, before you leave them with your rate increases, make sure you sweeten the deal for them. Give them a chance to make use of one of your services completely free of charge, such as a free website audit for web designers or a complimentary system check-up for IT consultants.

Raising your rates needn’t mean you lose out. You can easily keep your clients with you by being honest, and by giving them something for nothing in return for their continued business.

Did you like this article?  

1. Please share it with your network, we’d really appreciate it! 
2. Would you like to write for Tweak Your Biz? Or sign up for our RSS?
3. An outstanding title can increase tweets, Facebook Likes, and visitor traffic by 50% or more. Generate great titles for your articles and blog posts with the Tweak Your Biz Title Generator.

Connect with Tweak Your Biz on:                      

Images:  ” Cloud for business concept, Freelance  / Shutterstock.com“