Business and Finance Tips

Starting a small catering business can be a lot of fun. If you do it right, it can also make you a great deal of money. However, there are a lot of things that need to be done initially before you get carried away. If you don’t follow the right procedures, your whole business could wind up in jeopardy.

The first thing that every small catering business needs is a name and a business license. You will also want to determine how you will form your business entity such as an LLC, sole proprietorship, or corporation.

After that, you’ll want to get a tax ID number from the IRS. Be sure to look into which agencies handle the licensing in your state. You may be able to get some tips from other small business owners, since the process is similar for a lot of business owners.

One area where your small catering business may differ from other businesses is that you will need food service and liquor licenses.
The government takes food service very seriously and monitors the food quality, storage and preparation facility of every business where food service is involved.

Although a liquor license isn’t a requirement for a small catering business, it is a requirement for anyone who serves alcohol. Since most catered events involve alcohol, it would be in your best interest to get a liquor license. In fact, it could mean the difference between having a small catering business that flops and having one that thrives and grows into a large successful enterprise.

It is easy to become excited about the prospect of owning your own business, but remember that even a small catering business involves a lot of work. You may feel that you can juggle many tasks, but sometimes there just aren’t enough hands or enough hours in the day.

If you think about it, it really makes good business sense to hire some extra help, or at least line up some on-call helpers that you can bring in when you’re in a pinch. After all, larger events are going to require a lot more people to make things work efficiently.

Starting any business can be a strain on your wallet, so it will pay to remember this before you even begin. You may need to take out a loan. You can expect it to cost a few thousand dollars to get the right equipment and licensing, and insurance you will need.

Also, consider the costs of advertising and marketing, such as a graphic designer, newspaper or TV ads, or a company website and web master.

All of these things and more need to be considered before you ever try to get a small catering business off the ground.

Obtaining small business loans is tricky unless you are well prepared. Whether you are applying for a loan from your local bank, credit union, or some other source, you need to do your homework first to ensure that your loan application is successful. Most banks and other creditors consider small business loans risky especially in the initial years of the business. So, you have to work doubly hard to convince them that your business idea will succeed, you have a good business plan, that you are willing to invest your time and money in the venture, and that the venture will have sufficient cash flow to service the loan.

When looking at small business financing, most bankers check if the entrepreneur has also invested in the venture. They expect you to bring in between 25 and 50 per cent of the money needed for the start-up. The banker sees no reason to risk their money unless you are willing to risk some of your cash by way of capital.

Another reason why many start ups are denied small business credit is the lack of a convincing business plan. Before you go to meet potential lenders, you need to firm up your business plan. You need to show the lender exactly what their money will be used for and how you plan to repay the loan.

If you are a merchant, you can apply for a merchant cash advance, where the money borrowed can be used at your discretion. However, you do need to show regular sales and the potential to increase sales after the borrowings.

When in need of small business loans try approaching the Small Business Administration for help first. If they are willing to underwrite your loan amount, banks and other small business lending institutions will be more willing to lend to you. This is because their risk is lower. You can even try negotiating for a lower rate of interest.

When you need business credit line for operating expenses or to expand your business by purchasing more stock, it helps if you can offer the lender some collateral. If your business has tangible assets such as real estate or machinery, now is the time to use them to get credit at a lower rate of interest.

When applying for small business loans it is important to keep in mind that the primary concern of the lender is your ability to repay the loan. If you are able to convince potential lenders on this point by presenting a sound business plan and a repayment schedule you are more likely to obtain the loan. Yet another thing that bankers and lenders check is the personal credit rating of the borrowing entrepreneur. If you have not done so yet, get your credit rating reports and ensure that they reflect positively on your willingness to repay loans. By taking these very essential steps, it will be easy for any entrepreneur to obtain loans for their business needs.

What Exactly Is A Subsidy?

It is a material help, generally monetary, that either the government or any institution gives to a determined business activity. This is done in order to encourage the establishment of certain trades that are in need. Other motives are to protect a certain region, minority or age group.

Subsidized Loans

A subsidized loan is a loan with especially low rates, special payback terms or maybe neglecting the fact that you have bad credit, or both. The reason for this is the interest of the government or whoever is granting the subsidy on the loan, in favoring a determined business in a particular area of the country or state.

A Rightful Transaction

As in all transactions, you must give and take. So, what you take is the favorable conditions for the loan in order to start up your business. In exchange, you must meet the requirements that the government or entity imposes as a condition for granting the subsidy.

At this point, we shall not consider the counterpart or unsubsidized loans, since they are downright ordinary loans. No special conditions, no restrictions. Period. So, the protected business startup loan has a lower interest rate and a longer payment term.

An Indirect Advantage

One of the requirements for a subsidy is the fact that certain activities are encouraged, obviously because there are not enough, or even none at all of the specified trade. This reads out only one thing: Lack of competitors, or at least, very few of them. So it would do you good if you found out about government subsidies and which trades they are promoting.

Marketing Rule

One of the rules of marketing says that to make good business, you have to detect a niche, that means an unsatisfied need of the public and then create a product or a service to satisfy that need. So, you can start your business with one of the favored trades and feel safe that you will always have someone who will buy your produce.

The only risk is your own mismanagement. If you elaborate a good business plan and are willing to move to a specific area or swap your trade for one that is in need, you have a brilliant future ahead.

Bad Credit

Bad credit is not considered negative to the subsidy, but if you do have bad or poor credit, it is your golden opportunity to correct your spending habits and especially, separate your domestic cash from your business cash.

The Business Plan

Your business plan will be strengthened by the fact that the loan conditions are more comfortable, especially in your cash flow and you will be able to feel at ease to think up things to constantly improve your business. It is what they call Total Quality. This might be the starting point of a flourishing new beginning.

The easiest thing to do may be to open a search engine and type in a little information about your business (such as “real estate”) and “business tips for tough times”. It may be all you need to get advice. If you can’t find exactly what you’re looking for, though, there are sites that are designed to offer tips, as well as answer any questions you may have about running your business.

About.com, a network of sites that offer lots of great information on a variety of topics, has a small business site. It offers articles and blog posts that give business tips for tough times, and has a forum that you can use to ask questions that can be answered by other small business owners who might be in the same situation as you.

The Small Business Administration (SBA) also has a website that can give you good business tips for tough times. The site also includes a Small Business Planner, that can give you all the information you need to help you start and maintain your small business. It even offers a Local Resources section that may have business tips for tough times that are specific to your local community.

Yahoo! offers a directory of helpful links for business owners that cover nearly every topic you can think of, and can lead you to sites that offer specific information and business tips for tough times that are specific to your industry.

There is a business-focused search engine at business.com that not only gives you statistics and profiles, but gives you updated news and financial information that can lead to business tips that can help you stay successful.

These are just a few of the many resources available to small business owners. When going though tough economic times, information is key, and through these resources, as well as others, you can get the answers to your questions, find the support you need, and have a good list of tips for tough times that will help your business stay strong no matter what the economic climate.

Perhaps one of the most common ways to start your own business is to become a merchant. However, being one is no walk in the park. There are several things that you need to pay attention to, especially the liquidity of your business. In many cases, being short of capital or not having ready access to additional capital is what keeps merchants from succeeding. Having ready access to additional capital can either mean you are extremely rich or you simply know the different ways for you to have the needed funding for your small business. It is quite obvious that you are better off with the latter because no matter how much money you have today, there will come a point that you might resort to different kinds of merchant loans.

There are at least two kinds of financing options that you can take to fund your small business. Merchant loans or small business loans are perhaps the most popular and can generally allow you to borrow a large sum of money. In this way, you can start your own business or buy out one. The money you have borrowed can also be used to refinance your other business debts or it can be used to acquire other types of capital, like inventory or equipment or commercial real estate.

Other than small business loans, you can also opt to get a business cash advance. This is similar to merchant loans but generally does not require upfront fees. It also has a simpler application process than a traditional business loan and typically does not send reports to credit agencies.

The good thing about a business cash advance is it does not have fixed collection time and repayment schedules are more lenient. The funds you will be borrowing are unsecured money so there is no need to worry about collateral. Nor does it require applicants to have good business credit scores.

While it is quite true that SBA loans can generally satisfy your funding needs, it is not always easy to acquire additional capital through this method. This is why alternatives exist and it is quite a big help to turn your attention to these other options. While unsecured alternatives usually cover for the higher risk through charging higher interest rates, they are still worth resorting to because they can very well save your business from potential demise. Learn more about merchant loans and other funding alternatives today!