Prepare for Managing Small Business Cash Flow

Wednesday, May 24 at 07:05 AM
Category: Business Banking
Cash flow is the largest determining factor of a small business’ success or failure. Before a company opens its doors for business, there should be a plan in place for managing cash flow and creating safety nets for times when it’s slow. 
 
Every company will experience a lull in sales, late-paying customers, a business contract that didn’t come through, or economic factors that affect the bottom line. When that happens, business owners can be forced to cut costs or secure alternative funding. It’s critical to be strategic with processes and set expectations for customers from day one regarding your accounts receivable policies.
 
The first course of action is to work with a trusted bank that has treasury and cash management tools in place, as well as the expertise and desire, to help small businesses succeed. Managing a cash flow chart helps entrepreneurs detail the money coming in and out of the business on a daily, weekly and monthly basis and can include capital expenditures for a snapshot of the bigger, longer-term financial picture. 
 
A certified public accountant can provide information on how key cash flow drivers are performing, as well as insight on any developing negative trends. Standardizing the invoice and accounting processes will help avoid disruption in cash flow and can speed the process of getting paid. 
 
Business owners must keep a fluid calculation of their break-even point so they remain acutely aware of their minimum sales goals, how they must price products, and when expenses are on the trajectory to outpace profits. 
 
Among the strategies business owners should put into place to optimize cash flow include the following: 
 
Gross Margins
Know the industry standard for pricing of the products your business offers. Set costs at a level at which the business can be the most profitable, while still maintaining good customer flow. There’s a balance between price, demand and business affinity. In other words, a coffee shop start-up among solid local and national competitors needs to compete on pricing, uniqueness in what it offers, or some other point of difference in order to attract customers and maintain consistent cash flow. 
 
Send invoices immediately
If you’re not selling smaller retail items like coffee, you should strive to send invoices within 24 hours after a sale. This gives the customer ample time to process the paperwork for payment. 
 
Early payment discounts
Incentivize customers to pay early by offering a small discount, such as two percent off the total invoice if payment is received within 10 business days from the time it was issued.  
 
Business line of credit
A line of credit can be established for use when businesses experience a large gap in cash flow as a temporary safety net. Be aware, though, that the time to get that line of credit is before you really need it, so planning ahead is key.
 
Cash reserves
The cash flow chart is also the compass companies should use to determine the amount of cash reserves needed during slow periods. A conservative estimate for cash reserves is the equivalent of three months of cash flow; however, a reserve of six months is recommended.  
 
Accounts receivable financing 
To offset the deficit from payments that are not received on time, businesses may consider invoice factoring, also referred to as accounts receivable financing. This is a borrowing option that lets businesses convert the balance of invoices that are not due for another 30, 60 or 90 days into cash for immediate use.  
 
Manage inventory levels
Too much inventory will use up available cash. When getting started, purchase as little inventory as possible but make arrangements for quick delivery of additional inventory when supplies get low. Managing inventory levels and consistently cycling out old inventory will help promote active cash flow, but manage discounts of products and services carefully because they ultimately cut into the profit margin.  
 
Control debt
As businesses grow, owners can get ahead of themselves and create unmanageable debt. There are healthy ways to leverage debt, taking us back to the point of creating a cash flow chart and working with an experienced financial advisor to plan the next stage of the growing business. 
 
For every question about managing cash flow, there is a solution. Business owners have access to proven tactics and a variety of resources that can help them build, operate and grow their business efficiently and successfully. 
 
Tags: Arvest Biz, Business Banking
 

Helpful Tips to Protect Your Business from ID Theft and Fraud

Wednesday, May 10 at 06:10 AM
Category: Business Banking
With an increasing number of businesses operating online in addition to traditional means, it is critical that both consumers and business owners know how to help protect themselves from identity theft and fraud. Fraud not only can ruin the shopping experience, but have disastrous and long-lasting effects for a business. Even if your company doesn’t conduct retail business online, it is important to protect your private business information and data. 
 
  • Limit what you carry. When you go out, take only the identification, and business credit or debit cards you need.
  • Lock your financial documents and records in a safe place, such as a safe or locked file cabinet that only you have access to. 
  • Before you share information with vendors, ask why they need it, how they will safeguard it, and the consequences of not sharing.
  • Protect your company documents. Shred receipts, credit applications and offers, insurance forms, checks, bank statements, expired charge cards, and similar documents when you don’t need them any longer.
  • Install anti-virus software, anti-spyware software, and a firewall on all company computers. Set your preference to update these protections often.
  • Don’t open files, click on links, or download programs sent by strangers. Opening a file from someone you don’t know could expose your system to a computer virus or spyware that captures your passwords or other information you type.
  • Before you send your business information via your laptop or smartphone over a public wireless network in a public place, see if your information will be protected. If you use an encrypted website, it protects only the information you send to and from that site. If you use a secure wireless network, all the information you send on that network is protected.
  • Keep financial information on your laptop only when necessary. Don’t use an automatic login feature that saves your user name and password, and always log off when you’re finished.
For more extensive information on privacy and identity protection, visit www.ftc.gov* and look for the ‘Tips & Advice’ tab. If you’re interested in fraud prevention services for your business that includes theft-resolution and account monitoring services, Arvest offers ACH Fraud Block and ChecXchange® with some of its business services. To learn more, visit www.arvest.com and select Fraud Prevention under the ‘Business’ tab. 
 
Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.  

Tags: Arvest Biz, Business Banking, Privacy and Security
 

Happy National Small Business Week!

Wednesday, May 03 at 06:45 AM
Category: Arvest Community News
The U.S. Small Business Administration takes the opportunity to highlight the impact of outstanding entrepreneurs, small business owners and others from all 50 states during National Small Business Week. During the week of May 1, the critical contributions of America’s entrepreneurs and small business owners are recognized. 

We’ve been celebrating our small business customers this week in Kansas City! How does Arvest help small businesses? In Kansas City, Arvest works with the community to provide resources and education to our small business owners.

“We offer free education classes throughout the year through our relationship with Central Exchange and with SolveKC. We have been able to highlight some of our customers to help deliver this education including CPA’s, networking experts and marketing firms. Our relationships with our businesses truly go beyond banking products,” said Arvest Business Banking Manager Monica Dahl. 
 
We asked our business banking team in Kansas City “What do you like about working with small businesses?” Here’s what they had to say!
 
“Nothing is more exciting than meeting with a new business and hearing about their dreams, vision, and business plan and then working with them and watching them grow. I’m so proud of these business owners who stepped out of the box and followed their dreams.” –Carolyn Rouchka 
 
“I love working with small businesses because I get to be a part of their dreams coming true.” –Rene Purtee
 
“Small business owners are my neighbors and friends in Ottawa and Gardner. It is great being able to provide financing and personally watch their businesses thrive and grow. It is banking at its best.” –Ed York
 
“I like the ability to work directly with the owner because they are most passionate about their business. I love hearing the story of their business and what fuels their drive. Working with the business, I help connect the owner to other resources and people in the community and have a direct impact on the business that is visible and truly makes a difference in their lives and the lives of their employees.” –Monica Dahl 
 
“I love working with our small business owners, because each of them are so unique. I enjoy getting to know the owner’s first, even before getting to know their business. Being able to work with our small business customers is such an honor – we get to help make dreams come true.” –Cherith Rone
 
We’d like to recognize all of our small business customers — we appreciate you and all you do for the community!  
 
Tags: Arvest Biz, Business Banking, Kansas City
 

Banking on Your Future – Small Business Workshop Series in Kansas City

Wednesday, May 03 at 06:15 AM
Category: Arvest Community News
Calling small business owners and entrepreneurs in Kansas City! Arvest Bank and Prospect Business Association invite you to attend our Small Business Workshop Series: Banking on Your Future.

Throughout the series, business owners will discover insight on how to apply for a loan and receive in depth information on the different types of loans that are available. Workshop sessions will be led by industry experts from Arvest Bank, including Mark Larrabee, Greater Kansas City president and CEO; Raul Duran and Shannon Neal, Community Development; and Monica Dahl and Rene Purtee, Business Banking.

Check out our upcoming classes:
  • Thursday, May 11, 2017: Business Structure and Financial Statements. Learn how to organize your business and financial management 
  • Thursday, June 8, 2017: Small Business Resources. Opportunity to visit with local business resources
Both sessions will be held at East Patrol Community Room (2640 Prospect Ave., Kansas City, Mo.) and begin at 5:30 p.m.
 
Workshop sessions are free to the public. Space is limited so registration is required. Please contact Julie Headley at jheadley@arvest.com to reserve your spot today! 
 
Tags: Arvest Biz, Business Banking, Kansas City
 

Jennings Named Rural Missouri Inc. Member

Monday, May 01 at 05:30 AM
Category: Arvest Community News

Arvest loan manager in Fayetteville, Ark. is an active small business proponent.

FAYETTEVILLE, Ark. – Arvest Bank’s Eileen Jennings has been named a member of Rural Missouri Inc. (RMI).

RMI is a community development corporation based in Jefferson City, Mo., that has announced plans to partner with banks in 10 Arkansas counties to provide SBA 504 loans. The 504 program offered by the U.S. Small Business Administration provides financing for major fixed assets such as equipment and real estate.

RMI has delivered SBA 504 loans for more than 30 years, leveraging more than $1.7 billion in financing and creating more than 19,000 jobs, according to the company.

Jennings was elected at RMI’s annual membership meeting April 27-28. Additionally, she will serve on RMI’s Jefferson City, Mo. Loan Review Committee.

Jennings is a senior vice president and area loan manager for Arvest in Fayetteville. She began her career at Arvest in 2004 and has held numerous positions. In addition to launching an internal education effort aimed at helping bankers better understand commercial customers, Jennings was named the 2016 Commercial Banker of the Year by the Central Arkansas Chapter of The Risk Management Association. She also is a board member for Northwest Arkansas Land Trust.

Eileen is a true champion for small businesses. Her commitment to seeing them succeed is remarkable, and she will do a fantastic job for Rural Missouri Inc.

Tags: Arkansas, Arvest Biz, Associates, Business Banking, Community Support, Equipment Finance, Fayetteville, Missouri
 

Why Small Businesses Need a Mission Statement

Wednesday, April 26 at 07:05 AM
Category: Business Banking
Every business begins with a theoretical road map to get started, but a key component to long-term success for companies of all sizes is a written and publicly posted mission statement. This statement outlines the company’s purpose – why it exists and what it does; its vision – the big picture; and often its core values that will be followed by every leader and employee in the business.  
 
A mission statement should be brief. It should describe to the reader in a few sentences a high-level overview of the company. It is important internally so employees have a clear direction of what they are working to achieve on a daily basis. It also can serve as a reminder for leaders of the foundation on which the company was built to help guide them during times of change. 
 
Externally, a mission statement speaks to customers and outlines how the company differentiates itself from others in the industry. 
 
Customers want to support businesses that have a solid plan and business owners who are there for the right reasons, regardless of which industry they’re in. Not only does a mission statement give internal and external stakeholders the ‘why’ behind the ‘what,’ it can also create opportunities for new projects, partners or investors that a business may not have had otherwise.
 
The opposite is true as well, in that a clear and understood mission statement may steer leaders away from making alliances that don’t align with that mission. Include the mission statement on the company’s website, in the workplace and other collateral documents.  
 
It will be the first impression of the company many people see so it needs to be concise, yet impressive. The goal is to provide clarity on every level – to employees during their first days on the job, to customers and potential partners. When the mission is clear and a company’s actions align with that mission, it will be reflected in financial results which, ultimately, is the most important reason every company needs a mission statement.  

Tags: Arvest Biz, Business Banking

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