If there was ever a common practice, it is using other peopleâ€™s money to grow your business. Startups have long been in favor of finding others who are willing to front cash in hopes of reaping promised rewards later. It does take money to grow. How fast you will grow depends on a lot of things, not just how much money you have in the bank. If things are looking a little light in the checkbook department, loans and investors are available for the needy and worthy Startup. Should you seek investors or look into getting a small business loan?
The critical elements to getting a small business loan depend on more than one thing. Good credit both from the business and the key players is absolutely necessary, for one. Before you start filling out credit apps and sending out executive summaries of business plans, itâ€™s best to go back to basics; seeing what fat you can trim off your bottom line before you decide you really need an influx of cash.
Do You Need A Small Business Loan Or A Good Budget?
This is the first question any entrepreneur should be asking themselves. It can feel like you are maxed out financially if you are spending without analyzing what you are spending and most importantly, why. Take a look at the businessâ€™s last 3 bank statement and credit card statements. Create a spreadsheet for all expense categories and start plugging expenditures into columns. What have you found? If you are like most Startups or small businesses, you might have noticed that you are spending way more in one or two areas than you realized.
Doing a financial checkup like this can sting a little, but it will end up saving you a lot of money in the long term. Now, go down each item in the columns and ask yourself why this purchase was necessary. Was it? Is there a more cost-effective solution you can consider besides the one you are spending money on? Take the extra steps to be sure you are using the most cost-effective solution.
Now that you have analyzed your spending and asked all the right questions, you can set budgets for each type of expense. You now have your budget. How does the financial future look for your business now? How much are you saving by sticking to your budget?
Look At Fixed Expenses Before Taking Out A Small Business Loan
There are expenses in your budget that need to be there. Things like rent, payroll, and health insurance are what they are. Are they?
Startups and small businesses are used to paying a lot for small business health insurance, as well as payroll processing. What they donâ€™t realize is that these fixed expenses could be lowered substantially with a PEO. PEOs combine all of the HR related expenses a Startup has at a much lower rate than sourcing them individually. PEOs donâ€™t just cover health insurance at a better price than a small group health plan. They offer:
- Health Insurance
- Payroll Management
- Payroll Processing
- Payroll Tax Payments
- Legal HR Compliance
- Risk and Safety Training
- Workersâ€™ Compensation Insurance
- EPLI Insurance
- Recruiting, Hiring
- So much more!
How much are you paying for all this right now as a Startup or small business? PEOs also share the burden of legal compliance with hiring employees. That is a weight off a lot of business ownersâ€™ minds.
A PEO Saves You The Money You Need To Grow Your Business
If a PEO took care of a good portion of the HR related expenses, how much could you save? What could you use the money for to grow that you canâ€™t now? It is a good possibility the thing standing in the way of growth is just better money management instead of legitimately needing an influx of cash.
Finding the right PEO for your particular business takes a little more research than just going down the list in a Google search. There are literally hundreds of PEOs. It might be tempting to dismiss all the choice as merely many versions of the same solution, but youâ€™d be wrong. Different PEOs focus on certain things, and one PEO being perfect for even a friendâ€™s company doesnâ€™t mean it will work well for yours.
If youâ€™d like to explore how a PEO broker like PEO Spectrum can help you find money in your budget so you can grow like you want to, contact us today. Weâ€™d be happy to help you find the right PEO for you and help you create a better future for your company.