When all was said and done I went to a local bank and presented it to the loan officer. She said that she normally did a quick glance and rarely read entire plans, but was so captivated by the opening Executive Summary that she asked me to wait while she finished reading. She immediately agreed to forward it to the sba representative for approval. That was an exciting moment indeed!
A company’s stock price is driven by earnings growth over the length of time. Occasionally earnings can occur when cuts are made, but in the end, increased revenues have to increase if earnings are to keep escalating. A good sign of a company is when they are increasing their revenues. When a company has ‘flagging sales’, it could be a sign of trouble for the future. Earnings growth says the company is making more than enough to combat their cost of operation. Well established companies need to show consistent results. Younger companies tend to display strong revenue growth with little or no earnings.
Make sure your financial statements are put together correctly – balance sheet balances, cash flow ties in with the balance sheet and the income statement. This is a skill just like fixing your car. If you don’t know how to do it, do bluff – hire someone to build the statements for you. This does not have to be an expensive accountant or consultant. You can probably find a local MBA finance student who can do it for you as long as you provide the appropriate numbers.
If you already have a well-funded emergency fund and your short-term goals have been funded, you might funnel all of the ten percent into a retirement plan. Of course if you set aside 10% in your retirement plan, you’ll be contributing pre-tax which works out to be more than 10% after-tax.
Don’t buy a property just because it is a “steal”. Consider all the costs of buying the property, including any needed repairs, utility bills, property insurance and taxes, and risk of vacancy. If possible, make a cash flow examples, or ask for a cash flow examples from the prior owners of the property (if it was used as a rental property). Collect as many documents as you can which detail the property’s utility and other costs.
There is no hard fast rule to tell you how much debt a company should have, because the amount can vary based on the industry. If you divide the company’s assets by its equity, you will uncover their financial leverage. The company’s financial leverage is a good tool to see if the company has too much debt. You can compare this number with others in the industry to see where they rank.
Successful business people are aware of how much ready money is flowing inwards, as well as being savvy as to when invoices should be paid and money received. They do this by having a cash flow projection and working on it daily.
Today, most student loans have low interest rates thanks to tax payer subsidies. Students who are graduating with other debt on top of student loan debt should always compare interest rates and pay off the debt with the highest rate of interest FIRST. It makes less than no sense to pay off a loan with a 4% interest rate while a line of credit sits and accumulates interest at 19% a year. Pay attention to interest rates, and you will save yourself a lot of money.