Launching a new business is exciting, filled with the anticipation of being your own boss and the creation of new goals and plans. The upside can be significant and entrepreneurs look forward to new success.
However, new businesses – as well as long-established ones – often face challenges that they had not considered or changes in their business that can jeopardize their futures. Here are three common business mistakes to watch out for:
- Taking on too much debt: Easy-to-get credit cards, online loans, and merchant cash advances can tempt business owners with quick cash, but paying back high-interest loans when your company is getting started can be impossible. You could be out of business and bankrupt before you even get a chance to grow your customer base. With a little research, business owners can find sources of working capital that don’t incur debt.
- Neglecting to plan for their cash flow management: Cash is king and no matter how great your business prospects look and how much you’ve invested in making the company work, if you don’t have enough cash to cover payroll, rent, and operating expenses, you’ll be closing your doors fast. Don’t wait until your business is in trouble to make plans to ensure that your income is on the same schedule as your expenses. Business owners who plan ahead how to balance customers’ payment terms with their own financial obligations will have less stress and more chances to succeed.
- Doing work for customers that don’t pay: Picking the wrong customers can result in significant business losses – and lead to bankruptcy as well. The key to protecting your business is professional credit checks. You need to have on your side a credit bureau that is concerned about your company’s best interests. You cannot always know your customers’ payment histories or financial background, leaving your business vulnerable to investing time and resources with no revenue coming in or long delays in payment.
Fortunately, you have a solution to all three common business mistakes: Invoice factoring. When you factor your invoices with a top factoring company, you incur no debt. You simply receive prompt advances for work you have already completed so you don’t have to wait 30, 45, or even 60 days to get paid. This stress-free process smoothes out your cash flow and enables you to consistently be on time with payroll and other operating expenses. Lastly, top factoring companies have their own in-house credit professionals looking out for you and your company to guard you against working for customers with histories of non-payment or slow payment.
Find out more about how factoring your invoices can protect your company from these common business mistakes. Contact Interstate Capital now – it all starts with a no-obligation factoring rate quote.