Your small and medium business CFO resource.

Cash for Impact

Small Business Secrets: Practices that Aid Personal Finances 0

Posted on May 20, 2015 by Tiffany C. Wright
Financial management is financial health

Managing your money like a successful small business owner can enhance your financial health.

There are a number of activities that small business owners routinely engage in out of necessity. For example, for successful small businesses, cash is king. You can be profitable yet have very poor cash flow because you did not structure the timing of your inflows to exceed your outflows. Most ongoing successful business owners have developed the ability to forecast and manage cash. Learning to do this and other activities bodes well for individuals and improving both their personal financial management capabilities and their actual personal finances.

Managing Cash Flow

I plan out my cash flows 12 weeks in advance. If I see that I’ll have a large outflow in a given week, I’ll make adjustments in other weeks to ensure I have the cash or I’ll use our credit cards or line of credit. But I make sure that I can pay these down within 1-2 months. In addition, I plan out capital expenditures 1-2 years in advance. That way, I can explore ways to fund those expenditures in advance such as a lease, term loan or (more rarely) one or more investors.

People can use this same planning and discipline to manage their personal finances. Treat those major vacations and large purchases like capital expenditures. Know your personal inflows and outflows and timing and only use your credit cards to cover the gaps or to allow time for more cash to come in before you pay out (i.e., you delay the cash outflow by 25 or more days by putting it on the credit card).

Poor financial management

Poor financial management is evidenced by overdue bills, maxed out credit cards and little cash.

No Reliance on One Income Source

Another thing is, as a business owner, I try not to place more than 5-10% of my business with any one customer. Sometimes a customer may jump to a much higher percentage (which is usually great!), but then I focus on expanding customers or the business to again lower that percentage. Most non-investors and non-business owners have one or two sources of income – their own and that of their spouse, if they’re married. To generate cash from other sources, you can invest in real estate, invest in bonds, invest in stocks that pay dividends, freelance, have a part-time job,… The point is to reduce your reliance on your paycheck through multiple methods so you don’t experience a massive shock if you lose that paycheck.

Periodically Extract Money and Invest

Finally, I am currently growing my business. However, with previous businesses, I pulled money out of the business periodically and invested in other assets – other businesses, stocks, and real estate. I want to build the value of my business by retaining some profits but I need to reduce the risk of a negative impact on my personal finances if something unexpected happens and adversely slams my business. You can benefit from doing the same personally. Take money from your paycheck and invest it in something, preferably, multiple assets that you know and are comfortable with. You increase your net worth over time and reduce the likelihood that one asset will collapse and wipe you out financially.

Opening a Small Business Bank Account with Bad Personal Credit 0

Posted on June 09, 2014 by Tiffany C. Wright
Blank check

Your business checking account is a critical component in operating your business.

This article is a continuation of my previous article, Opening a Sole Proprietor Bank Account with Bad Credit . The “Opening a Sole Proprietor Bank Account” discussed what actions to take if you have bad personal credit when opening an account as a sole proprietor and provided some how-tos. However, this article discusses the legal options to explore to remove or lessen the impact of bad personal credit on your business bank account, and what actions to take to utilize those options.

To develop business credit and protect your assets, open a bank account as a separate legal entity, NOT a sole proprietor

Instead of operating as a sole proprietor, which means that you simply start operating a business under a name that is not yours, I highly recommend adding a few steps and forming a separate legal entity. If you convert your sole proprietorship into a legally separate business operating as a limited liability company (LLC), corporation, limited partnership, or other separate legal entity, to open a business bank account you will need the articles of organization (LLC) or incorporation that you filed with the state.

Some potential barriers

In most states an LLC is the easiest to form and operate. However, some states, for example, Ohio, do not allow you to form a one-member LLC, which is what a sole proprietorship would be. In that case you can form a corporation. However, another option is to form a two-member LLC but only provide the second member with a 1% stake in the LLC. This structure gets more complicated and will require a discussion with an attorney. This is why a corporation will be the easiest to form.

Man signing document

Your resolution must be signed by all parties.

Resolutions required for multiple owners

If you decide not to operate as a sole proprietor (which is one owner – you) and, instead, add one or more additional owners, you will need to provide the banker opening your account with a resolution from the other owners or board. The required resolution must grant you the right to transact financial business for the company in general, or grant you the right to specifically open and control the bank account. However, you do not need to worry about running out and hiring an attorney to draft a resolution. All major banks and many smaller banks provide resolutions that business owners can sign and submit. You can also use these resolutions as samples.  To open the business bank account, you will also need the tax identification number for the business and a form of personal identification.

If you have poor personal credit

If you have a poor personal credit score, the formation of an LLC, corporation or similar separate legal entity eliminates the use of your social security number to open a business bank account. File the required documents with the IRS to obtain an employer identification number, which is the tax id for businesses. This process is fairly straight forward and can be done online at the site in under 20 minutes.

Personal credit AND asset protection

Your company’s business bank account is the first step in building credit for your business separate from yourself. Take advantage of this opportunity by creating a business considered legally distinct from you from the beginning, before you open a business bank account. Even if you have great personal credit, you will protect your personal credit by keeping your business credit inquiries off of your personal credit report. In addition, converting your sole proprietorship into a separate legal entity will help prevent pursuit or attachment of your personal assets for issues arising from your business.

Opening a Sole Proprietor Bank Account with Bad Credit 2

Posted on June 02, 2014 by Tiffany C. Wright
Woman at table signing check

You can use preprinted checks or check printing software for business checks.

If you read this blog regularly, you know that I have written several articles on business bank accounts and, for smaller businesses, separating personal finances from business finances. In this article I weigh in on two separate topics that I combine for this article: opening a small business bank account as a sole proprietor; and opening a small business bank account if you have bad personal credit.

Opening a bank account as a sole proprietor

You can open a bank account as a sole proprietor but this bank account will be tied to your personal financial status. Remember, from a legal perspective, as a sole proprietor, you and your business are one and the same. In everyday terms this means that, if you have judgments or liens levied against you personally now or in the future, your business bank account can be seized. It also means that, if your business ends up with outstanding liens against it, your personal bank account assets can be seized.

I know the overwhelming majority of small businesses do not have employees and operate as sole proprietorships. However, the bank account seizure potential is an excellent reason to form a separate legal entity for your business!

Risks of poor credit – opening an account

If you enter a bank with a poor personal credit history and ask to open a bank account as a sole proprietor, the biggest risk you will encounter is that the bank may have a policy of checking your credit score before opening a bank account. This is different than determining if you have bounced checks. Banks with a credit score policy will check your personal credit score. If the bank deems your credit score too low, it may not allow you to open a business bank account.

Crossed out credit card

With bad credit your business bank account may not qualify for an associated credit card.


Risks – failure to qualify for credit-based account perks

However, if your personal credit score drops after you open an account, or if your bank did not have a credit check policy, once you open your business bank account, you can relax. Unlike some credit card issuers, banks and credit unions do not assess fees for lower credit scores. Instead, you may not qualify for some of the credit-based services associated with many business bank accounts, such as account overdraft protection, an overdraft line of credit, or business credit cards. In addition, if you are granted an overdraft line of credit, your interest rate on your credit line may be higher. How much higher depends on the bank.

How do you circumvent these issues?

So how do you reduce the risk of rejection or the risk of your personal credit interfering with your business credit and vice versa? Form a limited liability company (LLC), corporation, or other separate legal entity and open an account under the tax identification number of your newly formed business. For basic business checking accounts for separate legal structures, banks do not check the company’s credit history.

Want to know more about this option and the way to proceed in opening a bank account? Check out the next post for the answers.

To Improve Cash Flow Management, You Must Have This 0

Posted on August 15, 2013 by Tiffany C. Wright

Here’s a different perspective on cash flow management, from the system perspective. I invite any and all comments. – TW


To Improve Cash Flow Management, You Must Have This
By guest author, Stacy Luft

If you want cash to rain in on your business, you must manage it effectively.

If you want cash to rain in on your business, you must manage it effectively.

Tax time is usually the time when most small business owners think about their bookkeeping system. All year they have been collecting receipts in a drawer and it isn’t until about a month before the tax accountant calls that they think… “Uh oh, I have to get my books in order so I can get my taxes done!” This is also the time of year when I’m asked to help someone set up a system for the bookkeeping and help them organize their work because they don’t want to “go through this again next year”.

Many times a small business owner will ask me, what accounting software should I use? I can answer easily that my preferred accounting software is Xero Accounting. However, that doesn’t answer the real question at hand. The business owner is struggling with something more than what software will fix. They are struggling with a drawer full of receipts and an idea of how much money that they’re pretty sure they make each month. They might even say “I used to know exactly what I had in the bank at any given time, but lately I’m not sure. Last week I even bounced a check and I’ve never done that before.”

So the problem really is that they have a system it’s just that it’s no longer serving them well. They have out grown the way they were doing things. Putting receipts in the draw and keeping a tally in their head. This is a system for sure, it’s just that now the business is starting to pick up and it’s just not as easy to keep track of all the details anymore. Things are beginning to fall through the cracks. Cash flow is starting to become a little cloudy.

When we first start out it is easy to keep up with everything, because we aren’t yet busy enough with paying clients and we haven’t been spending very much, so there just isn’t a whole lot to keep track of. It’s easy to stay up to date on our bookkeeping and keep a running tally in our heads. But then, we start to get busy and we start to run out of time and we start to let the things that don’t immediately bring in money fall behind. “I’ll get to that later” we tell ourselves. Later never comes though, because there really is only “now” to our brains. We need to schedule in the time to take care of everything.

How a bookkeeeping system can improve cash flow management:

So why do I need a solid accounting system you ask? What does this have to do with me and my cash flow? If you ask an accounting person you will likely hear an answer similar to, “Because you do! How can you run your business without it?” As a small business owner you will react with – “Well I’ve been running my business this way for years and I haven’t needed an accounting system. What you want me to do is way too complicated and way too much work for me to do!” Frankly, you would be right. The accounting system that you use, needs to be no more complicated than the stage of the life cycle your business is in. I think we can all agree that we need to have some form of an accounting system because we have to file our taxes each year. Truthfully, to me, that is actually the last priority to setting up a bookkeeping system to help me RUN my business. For example, can you keep a box of receipts for your expenses and track your income from your PayPal and bank statements for tax purposes? Absolutely. But will that box of receipts answer questions you have about your business?

Questions that a solid bookkeeping system can answer:

  • How much did I spend in Facebook advertising last quarter?
  • How much money did I spend on networking events this year as compared to last year?
  • How much cash do I need to collect each month to keep the doors open?
  • Where am I making money or losing money in my business?
  • Did I give my tax accountant all the expenses that qualify for deductions?

It may not seem like it, but each of the questions above are all related to cash flow. Improving your cash flow is the best way you can improve the strength of your business for the long term. Let’s face it, as business owners cash flow is really the only thing that matters. It is the life blood of your business. First place to go to improve your cash flow? Your systems. Systems can help you find mistakes, systems can help protect your business. Systems can help you to make informed choices for your business. A good system is like a good habit. Good habits will get you good results and bad habits or bad systems will bring bad results.

A solid bookkeeping system can help your small business by tracking your spending and your income in real time. (Or at least weekly) Setting up a system that tracks your money can improve your cash flow simply by having clarity on HOW you are spending your money. Having a solid bookkeeping and accounting system will answer questions like “Am I making any money… really?”

The secret to success for your bookkeeping system to unlock the secrets to your cash flow? Consistency. Discipline. All the time.

When you are starting out, you may not have the budget to hire someone to do it for you right away, but you still need a system and you need to work that system with consistency. Create a habit out of doing your bookkeeping. Schedule it into your work day each week. Set aside time during your normal business hours to take care of your bookkeeping. My suggestion is not to leave it until the end of the work day because it’s very easy to let it slide to “later” when you do. I also suggest scheduling it into your normal business hours because this will help you to understand easily when it’s time to hire someone to help you by taking over the bookkeeping tasks for you. A good measure for hiring help is when you are doing tasks that keep you from bringing in money to your business. You’re no longer spending most of your time on revenue generating activities. By scheduling your bookkeeping during your normal business hours you will gain the benefit that systems bring to your business.

The ability to know what your cash flow is at any given time and be able to make course corrections as you go can make or break your business.

How would a solid bookkeeping system improve your cash flow? What are some of the questions that come up for you that keep you up at night?

Ready to get your Bookkeeping System in order? Contact us to find out more about how we can help you!

Article Source:,-You-Must-Have-This&id=7624871



Property Values Impact Small Business Loans 0

Posted on August 29, 2012 by Tiffany C. Wright

According to an American Express Open Forum article, “The Real Reason Small Businesses Struggle to Get Credit” by Courtney Rubin,  “Nearly all of the businesses surveyed own some sort of property, and the assets’ declining values cut small business’s clout with creditors. Lots of entrepreneurs have used their company’s or their own personal property to fund their businesses.”

Real estate holdings are the base for many small business loans.

Interesting information. Apparently, most small business loans are collateralized by property, specifically real estate holdings. Although I didn’t know the statistics on this, in my many years of working with and for small businesses, this has been my experience. The most common collateral is the business owner’s home. The next largest source of collateral is either residential rental property or commercial property owned or operated by the business.


This excerpt references the value of business owners’ homes and business offices. It makes sense that when your home or rental property is the basis of a small business loan (the SBA loves to mortgage any and all properties owned in your name, for example), when the value of that home drops, the value of the collateral drops and so the amount of loan proceeds decrease. The commercial market and residential real estate markets aren’t fully correlated. You can have a drop off in one but stability in the other. Commercial has been impacted by a drop in real estate prices but, for small office buildings, the drop in most markets has been moderate.

But I’ve been reading that, in many locations, home values are ticking slightly upward (due to the lower number of houses on the market for sale). Just keep in mind that, due to the amount of collateral required for the typical small business loan or line of credit, the real estate market – residential and commercial – will impact most of the bank loans your small business will be eligible for. This is another reason that small business lending is typically strong in a strong real estate market.

Team Ivy Business: Small Business Access to Capital 0

Posted on March 13, 2012 by Tiffany C. Wright

Bill Holt, Suntrust’s EVP Business Banking

The Climate for Small Business Capital in 2012

Click here to register!

Small Business Access to Capital
  1. Small Business access to capital in the current economic environment.
  2. What small businesses need to do to raise capital in the current environment
  3. Small business outlook for 2012 – 2014.

Bill Holt

Executive Vice President, Business Banking

SunTrust Banks, Inc.

Bill Holt joined Suntrust Bank in July 2009 as Executive Vice President Business Banking.

Bill’s prior experience includes Executive Vice President Wholesale Banking with Wachovia Bank, Executive Vice President – Wholesale Banking Group Chief Operating Officer and Executive Vice President – Executive Director of Business and Community Banking.

Bill Holt graduated from Furman University in Greenville, South Carolina with a Bachelor of Arts, Economics and Business Administration.

Favorite Napoleon Hill quote 0

Posted on November 02, 2011 by Tiffany C. Wright

This is my favorite Napoleon Hill quote. I think it is so applicable to life today I decided to share it here.

I bargained with Life for a penny
And Life would pay no more,
However I begged at evening
When I counted my scanty store.
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid.”

What is your favorite Napoleon Hill (Think and Grow Rich author) quote?

Seven Steps for Effective Cash Management for Your Business 0

Posted on October 19, 2011 by Tiffany C. Wright

Seven Steps for Effective Cash Management for Your Business

Seven Steps for Effective Cash Management for Your Business
By Ranka Cvetkovic

Did you know that 85% of new small businesses close down in the first year of operation?

According to a report conducted in an issue of USA Today, the statistical failure rate of small businesses in America is as follows:

In the first year of business 85% of small businesses close. The second year closing statistic is 70%. The third year in business shows a small improvement in staying power; 62% of businesses will stop working by this time. By the 4th and 5th year (respectively), 55% and 50% of businesses will be closed.

Tightly manage your cash to build your business.

The data for small business failure varies from country to country and from source to source, but the average statistical data of business failure in most western style economies is skyrocketing high!

When operations of new businesses are analysed, planning and management of cash flow is one of the critical areas that is quite often underestimated and therefore overlooked.

Let us be honest, clearly defining and implementing a professional Credit Management System is something that very few new businesses ever prioritize in their first year.

How well you do your debt collection can make or break your business!

Every business has different methods and issues with getting paid. So let us look at some of the key factors in running a successful Credit Control & Management System.

1. Taking time for proper financial planning, policies and procedures to get the business started and to keep it operational (Advance planning will save lots of time and money later).

2. Developing and defining Terms of (Business) Trade and Credit (Having in place clearly defined and written payment terms are a must for any business).

3. Developing procedures for credit checking of prospect customers/clients (These procedures will weed out potentially bad clients that you do not want and need in your business).

4. Having accurate and timely billings (The sooner your client receives your bill, the sooner the payment is due).

5. Sending Statements/Reminders on a regular basis (Regularity in sending payment reminders will bring stability in your cash flow. Do it every week if necessary).

6. Developing and implementing Debt Collection/Recovery procedures and techniques (Define & implement steps in following up bad debt).

7. Managing and controlling bad debt by outsourcing (Do not write off bad debt; instead use professional debt collectors and legal debt recovery options).

By making sure your business has all of these key issues attended to will ensure that you have access to enough cash flow to keep you going through the controlled growth stages of your business. Implementing these steps will allow you to keep focused on developing and improving your main product or service. Now, ask yourself, are you ready to make necessary changes in your Credit Control approach?

Is it worth putting extra planning, time and effort into your debt collection system? Once you answer honestly to these questions, you will know if you are ready to make the transition from a new small business to a financially successful small business! is a web based resource for businesses and individuals who are seeking to improve their business cash flow and get more in depth knowledge of debt collection policies and procedures. EasyDebt Collecting is managed by Ranka Cvetkovic, Principal of Ethical Dealings Co – a debt management and credit control consultancy business. Please visit our web site for more free tips on debt collecting.

Article Source:

Five Small Business Finance Tips 0

Posted on October 07, 2011 by Tiffany C. Wright

Here’s an article from another guest poster that I thought very useful. Enjoy! – TCW


Five Small Business Finance Tips

By Lily Faden

Get funding for your small business via a small business loan.

Owning a small business involves much more than coming up with and implementing a business idea. Small business owners quickly learn that a huge part of their role as the owner of a business means learning how to take care of the financials. Here are several tips for small business owners who want to learn the best practices for managing their business’ finances:

1) Bookkeeping

To the dismay of many business owners, the ancient art of bookkeeping isn’t going anywhere. Fortunately, bookkeeping has become much easier. Bookkeeping programs can make the process much easier, but there are still certain fundamental rules that business owners must take into account. Firstly, business owners must always keep a record of all of the invoices processed by their business as well as the expenses they have incurred, such as raw materials, salaries, and operating expenses. While there is no solid rule for how to keep track of earnings and expenses, what matters most is that you keep track of your finances in a consistent fashion and that everything is written down. This is arguably the most important part of owning a small business.

2) Don’t Over-Exaggerate Your Earnings

When working with investors, banks, or other financial lenders, one of the biggest mistakes you can make is to exaggerate your business’ earnings. These lenders need to know how likely you are to repay the money they have lent you when making their decision about whether or not to lend it in the first place. Lying or exaggerating about your earnings will only harm you and the lender in the long run.

3) Make Sure All Of Your Funding is Backed by a Legal Contract

Regardless of where you are going to receive funding, you need to ensure that the terms of your financial agreements are written down on a contract. Unfortunately, things can become troublesome during the repayment process and it is therefore urgent that you and your lender lay out terms in the beginning that you must adhere to later on. This keeps both sides accountable and also ensures that both sides know exactly what they are getting into before the money starts circulating.

4) Cash Flow

A successful small business always maintains a sufficient amount of cash on hand to take care of daily operations and unexpected expenses. However, many businesses that have been successful in receiving funding find that the money they are lent covers already-existing expenses but doesn’t quite leave enough cash left over to keep on hand. This is why small business owners are familiar with the feeling of being stuck somewhere between outstanding invoices and bills that are past-due. One option for small business owners is to use a merchant cash advance. These types of business cash advances can provide small businesses with additional cash flow to meet these expenses or to grow their business, and they are repaid through future credit card receivables. This is an important option to consider for many small business owners who have been denied other forms of funding.

5) When to Process Credit Cards

The short answer: Now! Being cash-only is extremely inconvenient for most customers. While setting up a credit card processing system can be costly, your customers may find it more convenient to go to your competitor’s business once they learn that your business doesn’t process credit cards. Furthermore, using credit cards at your business functions as an instant line of credit and means less hassle and paperwork for your business. This can cut down on lengthy credit approval processes. Also, there are additional types of funding available for businesses who process credit card transactions as opposed to those who don’t.

Get small business funding in 4-6 business days with Entrust Cash Advance.

Article Source:


10 Must-Know Tactics on Bootstrapping 0

Posted on September 30, 2011 by Tiffany C. Wright

Another great article on bootstrapping, by another guest blogger. I couldn’t have said it better myself…so I didn’t! – TCW

10 Must-Know Tactics on Bootstrapping a Business

By Ronald C Spencer

It can be really challenging, but bootstrapping a business has proven time and again how great things can spring from absolutely nothing. Take

Bootstrapping is useful when money is tight.

for example Internet giants like Google, Facebook and YouTube – they were born in unlikely places like a garage and a bedroom. Other rags to riches bootstrapped businesses include not entirely online-based companies such as Whole Foods Market, Apple, and Nordstrom. So now you know that bootstrapping a business is never an impossible feat, but how do you do it?

Bootstrapping Tactic #1: Work For a Positive Cash Flow

Cash is an integral ingredient for a small business with limited budget to survive. Focus on generating positive cash flow so that you can pay your bills and buy little by little the things needed for the business.

Bootstrapping Tactic #2: Make Humble Sales Estimates

A conservative estimate is totally different from a humble one, in that the latter can be a mere fragment of the already conservative estimate but it is the more doable of the two considering the capabilities of the business.

Bootstrapping Tactic #3: Be Aggressive to Product Launch

The sooner you get your products out, the sooner you get cash inflows. Again, cash is essential, so do not wait to perfect your product. As soon as you come up with something functional, ship it. But be prepared to offer repairs and address complaints, and learn from those.

Bootstrapping Tactic #4: Opt for a Lean Company Structure

It can be tempting to hire and hire, but with budget constraints and growth goals on the line, make do with the smallest, leanest team you can work with. And never waste supplies, energy and other resources – economy is a trait you can develop right from the start.

Bootstrapping Tactic #5: Find and Target a Niche Market

Even a large business with overflowing finances cannot be all things. As a small business, you can survive and thrive by finding a niche market with untapped needs, and then offer them a solution.

Bootstrapping Tactic #6: Sell Great but Buy Cheap

You do not have the means to run a large store or buy expensive furniture, so for the moment, bear with the functional stuff you can afford. However, do not be mediocre in offering products or services to your clients. Give them your best.

Bootstrapping Tactic #7: Get Personal with Customers

Personally serve your customers, and with a sunny attitude. If you want advertising that costs nothing but rewards you enormously – it is word-of-mouth. And if you are keen enough to follow tactic number six, then surely you get the costless publicity you need.

Bootstrapping Tactic #8: Be Conscious of Money Left

It can be disheartening to know the truth, but that truth can make you want to work harder. Know how much money you have in your coffers and estimate how many days that can last you. Unless you know and understand the extent of your budget limitations, you may not truly be able to pull through with bootstrapping.

Bootstrapping Tactic #9: Practice Creativity and Resourcefulness

Presently, almost every customer need has a wide array of solutions. And your best arsenal to outwit your rivals in an environment characterized by cutthroat competition is creativity. Be resourceful too – find ways to lessen your cash outlay without compromising product or service quality.

Bootstrapping Tactic #10: Borrow Money as Last Resort

Yes, you may borrow money but only as a last resort. Although getting external help might prove beneficial, in that it speeds up growth and operational activities, it is still very much feasible to grow the business debt-free.

Bootstrapping is a financially sound approach to starting and growing a business. Make it your goal to be cautious with spending and to find ways to run the venture without incurring debt.

Get help from SquadHelp ‘s large squad of entrepreneurs, marketing professionals and advertising experts to bootstrap your business effectively.

Article Source:

  • Tiffany C. Wright's books on Goodreads
  • Archives

↑ Top