Mohit Tater's Blog, page 671

Why Companies Are Looking at Onshoring Jobs

After years of sending jobs to other countries, companies are reconsidering their policies. Outsourcing is no longer in vogue at many major corporations. Instead, they are reverting back to hiring Americans for jobs. What has changed? Companies are accepting that some of their opinions on outsourcing were wrong. Here’s why companies are looking at onshoring jobs.

Outsourcing Has Flaws

When corporations started shipping jobs overseas, they had a single goal for their choice. They wanted to save money. Thanks to the power of the American dollar against foreign currencies, companies could hire international personnel for a fraction of the cost. The median worldwide income is approximately $10,000. That’s barely 20 percent of the average American income of $51,939. Workers abroad are much cheaper to hire, and corporations can roll that savings into boosting their net revenue.

Unfortunately, outsourcing does more harm than good in many instances. Cultural issues can reduce the quality of infrastructure. Communication is a constant risk, since the people performing the requisite work are thousands of miles away from the base of operations. For that same reason, shipping and other logistics can be a nightmare as well as exorbitantly expensive. Finally, free trade agreements place an onus on American businesses forced to compete on the global market. Outsourcing looks better on paper than it works in execution.

Big Data Reveals Onshoring Is Better

Why are companies paying more for Americans to hold down the jobs that were outsourced until recently? The explanation is that businesses are relying more on big data. When statistics reveal imbalances that impinge on the bottom line, savvy employees discard conventional business tactics. Numbers don’t lie, and the results on outsourcing are emphatic.

Onshoring Satisfies More Customers

The primary use of customer service, the most popular outsourcing job, is to solve consumer problems. Most are basic problems, such as lost account information or bill payment options. As phone technology has advanced in recent years, automated systems handle most of these issues.

When a customer asks to speak with a live agent, he or she usually has a complex issue. Communication is integral to such situations. Available data indicate that outsourcing is harmful in such instances. It’s often an unfortunate byproduct of heavy accents that are difficult for Americans to decipher. Studies show that outsourced employees resolve complex issues only 45 percent of the time.

Onshored customer service is more popular, since workers speaking the same language as customers solve the same problems 88 percent of the time. That’s roughly double, which means people working with outsourced representatives must make twice as many calls to resolve their problem. Companies pay for all those excess phone calls, negating the potential savings of cheaper salaries.

Through onshoring, corporations guarantee that they have more satisfied consumers. Plus, they may have an easier time enticing potential workers who wonder whether customer service is the right career. Available data indicate that it provides a satisfying job experience, since customer-service representatives are able to successfully help customers in approximately nine out of 10 phone calls.

Outsourcing is out, and onshoring is in. The explanation is simple. Big data suggests that the idea of saving money by hiring overseas employees is a fallacy. Instead, companies satisfy more customers while claiming more satisfied employees when they implement onshoring.

The post Why Companies Are Looking at Onshoring Jobs appeared first on Entrepreneurship Life.

Reasons Smart Small Business Owners Must Invest In Security

Small business owners may not expect that they need to worry about security breaches – surely it’s only big companies like Apple or Microsoft that are targeted by hackers? Actually, the unfortunate fact of the matter is that hacks can happen to any company, no matter how small the website or network. Not only that, but obvious security breaches make you more likely to be targeted. Here are the biggest reasons why you should be investing in your online safety.

The High Probability

There’s a high probability that you might be the victim of a cyber attack, even if you aren’t expecting it. Hackers often target big websites, putting their malware in ads and on pop-up pages that you might unsuspectingly click on. From there, they could get access to your computer and whole network – and they only need to take a look around to see that you are a business owner with something to lose. While they may capture lots of useless data, you will stand out as a good target for further attacks. Statistics from security providers like McAfee indicate that these attacks are becoming more frequent.

The Cost

What’s the cost of a successful attack? You could lose money directly, as well as experiencing a loss of revenue if your website is shut down or corrupted. You may lose customer trust and loyalty if their details are leaked, and you could end up having to pay legal fees if that information is used in a malicious way. You could also end up getting a lot of bad PR. For a small business, this could mean the end, as operating costs become unobtainable and customers leave in droves. If you don’t invest in security, you could pay the ultimate price of shutting the business down and losing any personal finances tied up in it.

The Target Size

If you don’t have security, the size of the target on your head is huge. As we said above, hackers are normally looking not for the size of the business, but the size of the vulnerability. If you get hacked as a small business, it’s not bad luck or a random event. It’s simply because you didn’t put the right security measures in place. Sooner or later, that target will be irresistible to someone.

The Criminals

As Cyber Crime becomes more and more profitable – not to mention easy – lots of criminal organisations are moving into this sector. It has also become a tool in international warfare under the surface. Imagine how disrupting the businesses of a country on a widespread scale could weaken that country and the economy within it.

The Human Element

Even if you trust yourself and think that you would never make a mistake, we’re all human. We all screw up from time to time. If you have any employees, or if any other members of your family might connect to your work network, you need that security in place to defend against their mistakes too. It doesn’t matter who opens up that vulnerable spot – the criminals will be jumping on it all the same. You simply can’t trust that everyone will take as much care as you to notdownload bad software or click on the wrong ad.

If you want to keep your company safe and strong, you absolutely have to invest in security. Without it, it’s only a matter of time before you find out just how devastating a hack can be.

The post Reasons Smart Small Business Owners Must Invest In Security appeared first on Entrepreneurship Life.

Six Simple Ways to Maximize Work Productivity by Timesheet Tracking

It is indeed said that you need to be a good manager if you want to earn well.  Being a manager is not only managing your human resource but also manage the time effectively. Effective time management is the key to achieve the targets well before the deadline and assure productivity within the particular period. An organization that adopts timesheet tracking system to analyze the performance of their employees performs exceptionally well. It provides a clear image of the assigned responsibilities to respective employees as well as the time taken by him for completion.  In this article, we will discuss more enhancing productivity by integrating timesheet tracking software to a corporate environment.

USE INTERNET EFFECTIVELY

Most of the time while working we get distracted and spend hours surfing the internet such as checking emails, social networking and reading stories. This happens when there is no time tracking over your performance. A timesheet tracking application keeps record that how much time spent by a particular employee on an internet. That will help in performance evaluation as it represents that total time the employee was busy in doing nothing but unnecessary browsing and surfing.

HIGHLIGHT RESPONSIBILITIES

Being a manager or a CEO doesn’t mean that it is your responsibility to keep a check on everything and inspect every task. You simply have to assign targets to your subordinates and ask them to accomplish those within specific. Meanwhile, you can keep a strict on the timesheet of that employee that reflects the ratio of assignment completed by them at the given time. This will allow working more efficiently for bigger projects and your employees dedicated towards work.

MANAGE YOUR TIME

Assessing the time, keeping your tasks up to the date is the key step of being productive. Time management is definitely one of the major aspects that play a vital role in making any organization productive. Timesheet tracking software provides you a clear report that how well your employees are managing and assessing time.

IDENTIFY YOUR STRENGTH

By regular evaluation and timesheet tracking, you can identify your strength as finding which task you have completed on or before time.  The task that you have finished before the deadline clearly shows that you have certain expertise which were required to accomplish those tasks and by this, you clearly identify your strength.

  MAKE YOUR ROUTINE FLEXIBLE

Time tracking makes you versatile by a quickly switch between your strategies according to different circumstances. It is a good move to stick to your basics, but sometimes to get out of trouble, you need to be flexible and manage things with perfect timing. Tracking your time will show you that how much extra/overtime you have so that you could utilize it smartly. If you are well before time and already followed a schedule surely you will achieve a lot of over time so that you could use it at the time of immediate need.

EDUCATE YOUR EMPLOYEES ABOUT TIME-TRACKING

Before implementing timesheet tracking software to your organization make sure to educate and keep your employees in confidence that this application is just for the betterment of the company. It will enhance productivity, keep employees motivated and dedicated towards their responsibilities. It will also be a very useful tool for performance evaluation and appraisals.

Author Bio

This informative piece of content is written by Dave Jones. He is the manager in the company called Live Tecs. This company provides high-quality time tracking software, expense tracking software, and online timesheet tracking.

The post Six Simple Ways to Maximize Work Productivity by Timesheet Tracking appeared first on Entrepreneurship Life.

5 Tools Traveling Entrepreneurs Need

Entrepreneurs are a busy bunch who don’t have time to deal with fussy details. You likely travel lean and want to keep both your equipment and your arrangements as streamlined as possible. You probably receive many popular gift items such as packing cubes, travel pillows, and fancy passport cases — and you enjoy them all. When handling hard-hitting tools that take your business on the road, only a few items besides your laptop matter.

Unlocked Cell Phone

You won’t find a simpler or cheaper way to manage potential overseas phone and data expenses than dropping a local SIM card into an unlocked phone. Entrepreneurs who travel often will sometimes carry a second phone for use overseas, enabling them to leave their regular phone undisturbed. Load your second phone with travel apps, including offline maps, Google Translate, Rome2Rio, and TripAdvisor, and you’ll be ready to hit the ground running.

VPN Service

A Virtual Private Network (VPN) provides a safe, secure Wi-Fi connection even in public coffeehouses, airports, and hotels. The VPN encrypts your connection to keep your data safe. This network will fool most servers into thinking you’re still using a U.S. connection, which will give you access to domestic-only services and, sometimes, help you get around restrictive governments that block access to specific sites.

TSA Precheck

If you do much domestic flying, TSA Precheck is a time-saver. The program costs $85 for a five-year membership. Once you’re approved, you won’t need to remove your shoes, laptop, liquids, belt, or light jacket during a security screening. You can start your application online, but you’ll need to visit your nearest enrollment center for fingerprinting and a full background check before you can be approved.

Travel Protection

As your flight takes off or as your train pulls away from the station, you likely have many thoughts running through your mind. Is this thought one of them: “What if I get injured or sick while I’m traveling?”

A general travel policy will cover first aid costs while you’re overseas, minor theft of your phone or equipment, and other simple emergencies. However, you’ll need a rider to fully cover laptops and other expensive gear. A medical transport membership programs for travelers, such as MedjetAssist give you added peace of mind by arranging bed-side to bed-side medical transport from the hospital you are in to the hospital of your choice.

Travel Credit Card

Savvy travelers use reward cards to earn miles, nights at luxury hotels, and access to airport lounges. Sign-up bonuses can be appealing, but be sure to look at the ongoing perks and reward rates when choosing a card. If the nature of your work will require you to travel a great deal to conduct business, consider what types of features you’ll need for a travel credit card. Contact your credit card provider to get more details and study our options carefully.

Simplicity is the answer to travel stress. Seasoned travel pros make sure they have the above five essential tools within easy reach of their suitcases or passports. All you need are some clothes, your toothbrush, your passport, and your laptop, and you are ready for anything during your travels.

The post 5 Tools Traveling Entrepreneurs Need appeared first on Entrepreneurship Life.

Why Digital Marketing is Extremely Important in Today’s Time!?

When was the last time when someone you know opened some book like an encyclopedia or yellow pages to find some information? For some years we have found our fingers flying over some keypad every time when we are in need of some entertainment or information for any purpose. The world is finally at our fingertips. And this is the reason why the world of marketing has evolved from door to door salesmanship to digital marketing, which has increased the capacity of anyone to appeal to someone from a whole world away. Hence, here are 5 precise and important reasons for any entrepreneur, wannabe celebrity or an emerging or established company outlining the need to get under this humongous umbrella of digital marketing.

Importance of Digital Marketing
1. It’s Cheap

This should be one of the most important reasons that should excite someone enough to join the bandwagon. Digital marketing especially social marketing is way cheaper than traditional marketing strategies of advertising through print media etc. Start-ups or emerging companies can benefit from the greater revenue generated by investing way less. In fact, many of these channels of marketing are free, the prime example of these are Snapchat and Instagram.

2. Mass appeal

Digital marketing crosses local barriers. It provides a company or campaigns more space and time to tell its story. A person facing a screen seven seas away can get influenced by your campaign or website etc. Digital marketing allows the dream of mass appeal to come to a realisation. Also, it allows people to discover you through multiple channels of communication. The close relationship people have with their electronics further affirms beliefs that digital marketing is here to stay. For example, you must have noticed the constant ads that follow you once you have explored any shopping sites, thanks to google ads and facebook, this makes it easier to target ( and tempt )the consumers.

3. Flexibility

Digital marketing allows people to discover you through multiple channels across the internet. Those fond of reading can discover you for example, through blogs or the pictures on Instagram and snap chat or the mecca of videos i.e. Youtube. Digital marketing campaigns are way easier to manage and expand and can also be easily done.

4. Feedback

Digital marketing has made it possible with the help of simple tools to launch the campaign and then to track its reach & response from the consumers. It allows the consumers to connect and express their appreciation or grievances. Instant feedback allows us to tailor the campaign and respond to any problem etc. which is a major improvement over the traditional marketing approaches.

5. Provides a level playing field

There is no denying the fact that digital marketing has allowed even startup companies to challenge the big daddy’s of markets over time.

Innovative techniques of connecting across mediums such as twitter etc. by organizing contests etc have helped companies to connect with the masses and wield their influence by becoming their friend and not an intimidating big brother. Also, the scarce use of paper etc. makes it an environment-friendly way of marketing.

The post Why Digital Marketing is Extremely Important in Today’s Time!? appeared first on Entrepreneurship Life.

Failure is Just Another Word for Success

“I have not failed. I’ve just found 10,000 ways that won’t work.”– Thomas A. Edison

We all have failed at least once if not many times. If we look back at those failures, we have always learnt some important lessons from those failures. Every failure makes us one level stronger and makes us ready for the next level for the game called LIFE !! For me failure is just another word for success. The difference is just like that of a frown and a smile.Here are some thoughts of how I have seen failures.

Acceptance is the key: When people console you by saying that “it’s okay, it was not your fault.” Trust me it is your fault. Your fault is not that it happened. Your fault is why it happened. Learn to realize the “WHY ? ” and move on by fixing it. Not accepting it would simply take you to the next step without knowing how to not let it happen again.
Nothing is permanent: Like success, even failure is not permanent. It is just a phase and will pass by as quickly as it arrived.
You cannot reach there without falling: We all have some sort of goals set in life. We have our own ways to make it there. It is just how we learnt biking as kids. The fear of removing the training wheels have definitely freaked us all. Once removed, we have fallen many times but ultimately have learnt to ride it smoothly. Bruises, tears, fear, bumpy roads, laughter, smiles …all of this is part of one long journey to make it there. 
Happiness is sitting right next to you: The ultimate treasure hunt for all of us is to find happiness though we forget that its right there. All we need to do is believe in our selves and start the journey. Constant belief in your goals will bring you happiness even before you get there.
Be ready for surprises: I know we all never expect failures. Just the same way we don’t expect surprises. But they exist. Life has its own mysterious ways to surprise you and make you feel how lucky you are. Start counting on your blessings and life will never be the same.
Find your inner peace: Quoting Buddha “we are shaped by our thoughts; we become what we think. When the mind is pure, joy follows like a shadow that never leaves.” We should find our passion, inner peace and success will follow its way.

Just as I end writing this article, I can see the sun rise taking over the dark night sky and the birds taking over the silence of the night before. In life, I believe our positive attitude is the sun which can take over our failures and the birds are the sound of a celebration for our happiness.

As we all take our next step towards our goals, I would like to say one last thing-

“Winning is great, sure, but if you are really going to do something in life, the secret is learning how to lose. Nobody goes undefeated all the time. If you can pick up after a crushing defeat, and go on to win again, you are going to be a champion someday.” – Wilma Rudolph

Author:

Disha Manocha

Entrepreneurial Lead

SUNPAC International

Project Manager

Mixeron

The post Failure is Just Another Word for Success appeared first on Entrepreneurship Life.

3 Reasons All Entrepreneurs Should Look Up to Daryl Katz

At the age of 54, Daryl Katz has done more than many business people achieve in their lifetimes. He amassed billions of dollars in the pharmaceutical industry before turning his attentions to real estate, sports, and entertainment. These are just some of the reasons why entrepreneurs in all industries should look up to this enterprising Canadian.

He’s a Self-Made Businessman

While he had a comfortable childhood, Daryl Katz wasn’t born into great wealth. His father, Barry Katz, opened a small drugstore in 1955. Five years later, he moved the business to Capilano Mall and used the larger space to give his family an upper-middle class life. As Daryl terrorized his father’s store as a toddler, knocking items off shelves as he ran through the aisles, he grew to appreciate the pharmaceutical business.

Despite practicing as a lawyer, Katz saw his career take a turn in 1991 when he partnered with his father to buy the Canadian rights to the Medicine Shoppe drugstore franchise for $300,000. A year later, the first Medicine Shoppe opened in Canada. The Katz pharmaceutical empire grew with the purchase of struggling Canadian drugstore chain Rexall. He brought the franchise back from the brink before selling it in 2016 for $3 billion. Offloading Rexall has allowed him to pursue other business interests. From humble beginnings, Daryl Katz is worth approximately $3.4 billion today, according to Forbes.

He Balances Professional and Personal Life

Katz hasn’t let business aspirations hold him back from a fulfilling personal life. In 1994, he married Renee Gouin, daughter of Jean Yvon and Carol Gouin, founders of leading mining and heavy construction firm North American Construction Group. They live in a $13.1 mansion in Edmonton but own other properties, too, including Bel-Air homes once owned by Groucho Marx’s son, Arthur Marx, and Art Linkletter. The couple has two teenage children — Chloe and Harrison — who have followed in their enterprising family’s footsteps to launch Hockey Helps Kids, a program that helps support children’s charities through an interschool hockey tournament.

He’s Passionate About His Hometown

So many entrepreneurs are lured to business hubs like New York City or Silicon Valley, but not Daryl Katz. He’s a proud Edmonton native who refuses to move from the place where he was born and raised. His passion for the Alberta capital is admirable. While his business achievements are significant, Forbes suggests that his efforts to revitalize his hometown may become his most important legacy.

The Katz Group has spent almost $2 billion on a sprawling 35-acre complex, dubbed the Ice District, a city within a city that will feature a hotel, condominiums, entertainment facilities, and office spaces. The heart of the Ice District is the $600 million Rogers Place Arena. This new 18,500-seat venue will become the new home of his ice hockey team and the pride of the city, the Edmonton Oilers. Set to open in fall 2016 after nine years of planning, the sports arena will also feature a light rail transit link, a community skating rink, and a winter garden.

Thanks to his long list of professional and personal achievements, there’s plenty for entrepreneurs to admire about Daryl Katz.

The post 3 Reasons All Entrepreneurs Should Look Up to Daryl Katz appeared first on Entrepreneurship Life.

Laser Processing: An Essential Technology for Medical Manufacturers

Because of the increasing demand for high-quality medical equipment, manufacturers need to find equipment and tools that can do the job more quickly with great results. There are many machine systems in order to create the best tools, but one type of system that can bring many benefits are those that utilize linear stages for laser processing or machining.

Given that you will be producing tools that trained professionals will be using in life or death situations, it is of utmost importance that your output is of only the highest caliber. Otherwise, a single defective model could spell the end of your own manufacturing company. In this article, we will discuss how laser processing can help you achieve better results and protect your reputation.

Accountability

Laser processing works by having information delivered downward, in the form of a laser, in order to alter a certain material. Thus, markings can be made on certain surfaces, all without having to make physical contact using other tools. This means that you can engrave crucial information about the product without any risk of cross-contamination, since there will be no need to use any kind of inks or chemicals. As for what to mark on your product, you can include when the tool was created, where it was made, and what methods were used to produce it. By including this information, your clients will be able to easily get in touch with you in case they encounter any problems while using your products. In the end, being accountable for your output will make clients trust you more, improving your credibility with them.

Variety of Output

Laser processing allows you to change the size and shape of your workpieces without having to touch them. For example, you can cleanly cut out the shapes that you need from items that are normally damaged by other processes. Thus, you can create tools or other items using plastic, metal, or composite materials. This works great for any material that is usually damaged by manual machining, or is easily distorted by other methods that require direct contact.

Accuracy

The creation of any product by hand is prone to human error, but a machine with laser processing capabilities can greatly decrease the chances of coming out with a defective product. Because you can control it with precise computer-controlled positioning, you can create any shape or pattern that you need with pinpoint accuracy.

At the same time, you can be sure that the machine will be able to consistently repeat the process over and over again. Plus, you will be able to cut out intricate designs much more neatly and quickly as well. This enables you to produce different kinds of parts that are often used for delicate surgeries as well as for more complex but small medical devices, too.

Laser processing can let your company do more in less time and with less effort. Invest in one of these systems now and you will definitely see your company’s productivity—and its profits—go up over time.

The post Laser Processing: An Essential Technology for Medical Manufacturers appeared first on Entrepreneurship Life.

5 Foolproof Tips to Grow Your Brand on Instagram

The growth of Instagram has been nothing short of phenomenal. Today the social media platform boasts over 300 million monthly active users and businesses are now cashing in on the trend. It is the perfect platform for you to get your products seen by millions of people from across the globe. Better still, they can share these on other social media platforms, again giving you more exposure.

To appreciate how important Instagram is for your brand, consider a 2015 Forrester Research Study showing that more than 75% of Instagram users have looked up a brand on the platform before buying. With the right strategy, this social media platform can revolutionize your business. The platform essentially transforms a passive shopper into an actual shopper, which leads to more revenue for your business.

It is the perfect branding tool but then again it is not that easy to deploy. Millions of businesses are struggling to leverage the mouthwatering numbers on Instagram for their brands. If you are planning to launch a business Instagram profile, it is important to get it right. Here are some tips you can use to ace it and ensure your brand is noticed on this crowded platform:

Awesome Content Does it

Why do people go to social media? The world is rife with sadness and they are going to these sites to get some reprieve. This means they are looking for awesome content that will help them and lift up their spirits. They are looking for beautiful images that are inspiring amidst the gloom that is all around them and this is what you must strive to serve. A single post can boost your brand more than any other marketing campaign you have ever executed.

To get this done, start with a strategy and determine what you want to share. Is it appropriate for your target market? Go for beautiful imagery that will captivate viewers and this means being creative. It is important to go against the trend and avoid posting about your business every other hour. Throwing in a caption or text on your post can go a long way to enhance engagement with viewers.

Build Strategic Partnerships

This is one of the most obvious Instagram strategies for branding yet the most ignored. To enhance visibility for your brand, you need to leverage the power of partnerships. This means reaching out to other Instagram accounts that have a similar reach to yours. It is advisable to keenly check how the other account is performing and their method of working.

Unpaid shout-outs: These are a great way to give your brand some exposure. They mostly work through share for share formats where you share another account’s posts and encourage your followers to follow this account.
Paid shout-outs: This is another technique that is rapidly gaining tract on Instagram and for many good reasons. If your brand has a budget for social media, it is time to get more followers by aiming for accounts with more followers than yours. These accounts must be related to your brand. It is a guaranteed way to find followers especially when you are starting out. With a call-to-action (CTA) on your paid shout-outs, it becomes easier to get the other account’s followers to land on your account. From here, you can then drive them to your website.


Use Instagram to Build an Email List

An email list is crucial for any business but it is not always easy to start this campaign. Instagram can help you build an invaluable email list by converting your followers into email subscribers. While you can’t include a link on your photo, the trick lies in using the bio creatively. The caption should not be all about the image but you can easily integrate a call to action that will have a hold on viewers. Your bio must be short and sweet and include your link in order to enjoy better conversion. Once they land on your page, make sure you give these viewers value for their time; give discounts, bargains, freebies to ensure they subscribe.

Build a Community

For your brand to get the most out of your Instagram account, make sure you engage with followers. This might not be easy especially as a business unless there is a dedicated team working on the account only. The trick here is to use an automation tool, of which instamacrois the crème de la crème. This tool helps you to remain active on Instagram even when you are not around. It also helps you to determine the best time to post content. Automation helps your account to remain active through automatic likes, follow and unfollow actions.

If your Instagram campaign is floundering, it doesn’t hurt to ask for engagement from users. People might be viewing your content but they don’t have any reason to engage with you and it is advisable to call them out. A simple call-to-action as a post can work magic; for instance, you can ask them to tag a friend. The idea is to start a conversation that will eventually lead to your website.

Participate in Community Events

If there is one thing people love, it is a brand that gives back to the community. Think of a school event in your neighborhood and imagine how good it will look if your staff participated. Any activity that is geared towards helping the community rather than your business alone will provide a great talking point and these images are bound to generate a lot of likes.

While Instagram might have started as a platform where people can share moments with family and friends, it has now evolved into a valuable marketing tool. You can increase visibility of your brand to your target market by ensuring you post relevant content, engage with the community and strategize on how best to generate more followers. With the right tools, it is now easier to gain a large following on Instagram and as the number grows, so will your brand.

Author Bio

Evans walsh is a social media marketer who has worked in advertising for over 27 years. She writes on topical issues in the industry and new tools like instamacro to help businesses optimize their marketing campaigns. She lives in New York with her family.

The post 5 Foolproof Tips to Grow Your Brand on Instagram appeared first on Entrepreneurship Life.

Can Your Business Afford a Business Loan?

If you’re worried about whether or not your business can afford to receive a line of credit, worry no more. Business is all about solving these types of problems. That said, figuring out whether you have the resources to make all of your loan payments is not always easy. This article is all about demystifying the analysis by bringing to light the key issues that need to be addressed.

Think like a lender – While there is no one size fits all solution for determining the credit viability of a business, all potential borrowers share the common hurdle of satisfying a potential lender. Thus, getting into the mind of the lender is key. When you answer the questions that a lender will be asking, you will be well on the way to determining whether a loan is best. This should be done before taking out the calculator.

These questions can be boiled down into a few basic categories: Are you capable of paying the loan back? Are you going to actually pay it back? What happens if you cannot pay the loan back?

If you can confidently address questions like these, you have a much better chance at finding success with a lender. The next step is to then actually answer these questions more specifically.

 

Capability – It is best to use the same tools that banks and other lenders use to assess the suitability of a business for loans. One of these tools is a “debt service coverage ratio“ or a DSCR. This ratio divides the cash that you as a business owner will have to payback a loan in one year’s time by the amount of money you are borrowing with interest added.  After you determine your cash flow for the year, you’ll want to calculate the annual debt payments you face. This is where a business loan calculator comes in handy. Find one online with websites like “Bankrate.com” to quickly get a figure. Aim for a DSCR of around 1.25 or more.

Making it happen – While understanding your businesses cash flow is crucial, lenders also need to know whether you as the business owner are trustworthy. The debt-to-income ratio is another tool used to determine your suitability as an individual. To get this figure divide your monthly total debts by your gross monthly income. Then multiply by 100 to get yourself a percentage. Lenders tend to look for a DTI no greater than 36 percent.

If all else fails – If you’ve made it through the first questions with success, you are almost there. However, you must also answer for what will happen if your business fails and you cannot pay the loan back after all. The best solution may depend on what the lender prefers. Some lenders need collateral, assets, and others want excess cash flow on reserve that the bank can claim if you fail to pay up. Remember that if you sign a guarantee on a loan contract that you are responsible for paying out of your own pocket in the case that your business fails.

Remember, all three questions are equally important to lenders. If you cannot answer just one of the three, it may not be best to take a chance on a loan.

The post Can Your Business Afford a Business Loan? appeared first on Entrepreneurship Life.