The funny thing about money is that it’s an artificially limited resource controlled by The Federal Reserve. The Fed tries to manipulate our economy by changing the amount of money in circulation, the money supply. It’s not a precious metal or non renewable resource and it’s not backed by gold. It’s printed on a machine. Most transactions these days aren’t even done in printed cash, they happen through bits and bytes and binary codes going from one bank server to another.
Read MoreHow to Tell If Your Business Is Doing Well /
You don’t need to do a lot of digging to determine whether or not your business is doing well. You can feel it by just observing the day to day operations. When you’re able to pay all your bills, pay yourself and your employees and you have money left over in your business, it’s pretty obvious that things are going pretty swimmingly.
But instead of flying by the seat of your pants or letting your socials statistics determine the health of your company, let’s observe some factors that will allow actually you to determine the health of your business. There are a variety of measurements to choose from. They range from simple observations to more complex ratios.
Read MoreThe Freelancers Guide to Predictable + Consistent Income /
How awesome would it be to be able to predict how much money you think your small business or freelance practice will earn each month, quarter or year? Pretty awesome, right? You're thinking, "But Paco, my business is totally seasonal. There is no way I can predict it." And my response is, "You can. But have to be willing to look at other data points you might not have been looking at before and change your ways." In other words, if what you've been doing hasn't been working, you should change your methods.
Read MoreWhat Is a (Business) Line of Credit? /
Lately I’ve been working with a lot of small businesses that are growing rapidly. It’s awesome to watch this unfold, but one thing I’m learning quickly is growth comes has a cost. Whether you’re selling products, providing a service or manufacturing something, in order to grow, you need to invest in the business.
As I’m sure you’re painfully aware, business doesn’t happen in a neat timeline. Cash flow timing issues are very real. For example, there’s the furniture designer who is bringing on more staff, expanding to be a bigger storefront and signing new accounts. There’s the retailer who needs to make a purchase from the manufacturing company and the larger order comes at the best price. And then there’s wedding photographer who needs to pay her tax bill during the slow season. A line of credit may be an option to help bridge the gap.
Read MoreHow Your Invoicing Impacts Your Cash Flow /
I've worked in financial service since I was in college. In fact, my very first job was as a collections agent for a big, evil bank. For four hours a day, five days a week, I'd sit in a call center in suburban Southern California with a fugly headset on, connected to an automatic dialer. I would speak to people who were past due (bank speak for late on making a payment) on their auto loans. The majority of the time the person on the other end of the line just spaced and forgot to make their payment.
The bank had entire department dedicated to closing the gap between revenue that was owed to them (AKA receivables) and cash. The gap is entirely created because of how, when or if a customer will pay their bill or invoice. As a small business owner, you probably experience the drawbacks of this gap like not being able to pay your vendors or yourself or your other bills. But there are things you can do to help minimize the gap. This is called managing your cash inflow.
Read MoreHow to Build Wealth /
Wealth, in the traditional, economic sense is all about owning shit that's valuable and leveraging it. Yes, of course, there are many definitions of wealth, like having the luxury of time or having fulfilling relationships, but I'm talking pure economics here. Ultimately, owning valuable things allows you to sell, rent or lend the value in exchange for resources, like money.
Wealth is having more resources than you need for the present and future. And having more than what you need helps quell any anxiety you might have about the relative present and the future.
Read MoreUnderstanding Credit Card Balance Transfers /
A balance transfer is when you pay off a higher interest credit card with a lower interest credit card. You're transferring the balance from one credit card to another. A lot people use this strategy with their personal finances to get out of credit card debt. Credit card companies will often advertise balance transfer deals where no interest will be charged for a certain period of time. For example 0% interest (APR) on balance transfers for 12 months. Sounds like a pretty good deal, right? It can be, but there are some things you should know before making the transfer.
Read MoreHow to Price Your Services /
If you work for yourself or dream of working for yourself, I'm sure one of the motivating factors is to make a profit. Making a profit can depend on a lot of different factors. Some of those factors are outside of your control like the market and the competition. You can move the needle on other factors like leadership, management, location and the number of locations. But one of the most important factors that have a direct impact on your profit is pricing. Pricing is how much you charge for your service.
Read MoreUnderstanding Student Loan Consolidation /
Alright, student loans. These wonderful and horrible tools that allow people who can't afford an education to pay for one by simply mortgaging their future. Ah, the American way. If you're one of the unlucky and you've been avoiding doing the leg work and mental work when it comes to consolidating, this is for you.
Read MoreWhere Are You At? The Mid-Year Financial Gut Check. /
If our calendar year could be compared to a basketball game, we're at about half time. Halftime is a chance to pause and reflect. What's the score? How is the other team playing? How are you playing? You probably went on the court with an objective. Maybe the objective is to win. Or maybe the object is to not lose by 30 points. Whatever the objective is, now is the time to take stock of the score, your performance and how you can make adjustments to finish strong.
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