Charter Capital

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Small businesses and small business owners

  • How to Solve the Financial Challenges of Rapid Growth with Factoring

    How to Solve the Financial Challenges of Rapid Growth with Factoring

    How to Solve Rapid Growth Challenges with Factoring

    Rapid growth may seem like every entrepreneur’s dream, but it often creates more problems than it solves. In fact, an analysis of Inc.’s 500 fastest-growing private companies shows that five to eight years after making the list, fast growers perform worse than their counterparts, Inc. reports. Perhaps more concerning, two-thirds shrink, stagnate, or outright fail.

    On this page, we’ll explore why this happens, including some of the pitfalls of rapid growth, red flags that signify you may have a problem, and how leveraging factoring for business growth challenges can help.

    Financial Challenges Associated with Rapid Business Growth

    More often than not, it’s the financial challenges associated with rapid business growth that create issues and seep into virtually all business activities.

    Overhead Increases

    Businesses may anticipate increased expenses for things like inventory, but they don’t always see increases in overhead expenses coming. For instance, utility bills, materials, and salary expenses often increase. Many businesses must also upgrade their space to have more room for storage, manufacturing, or back-office processes as well. 

    Poor Management

    Business leaders, especially small business owners, wear many hats during the startup phase. You’re not merely the strategic visionary. You’re managing daily activities, the head of HR, the person chasing unpaid invoices, and so forth. It’s easy to become overwhelmed in these situations and impossible to ensure that each task gets the attention it deserves.

    Many red flags can signify management is going downhill. However, you’re likely having issues in this area if your business experiences surprises, such as unexpected peaks in unpaid invoices or emergency cash flow shortfalls that need immediate attention.

    Trouble Meeting Demand

    If your business is struggling to fulfill orders that have already been placed, or you’re turning down work because you lack the resources to fulfill them, it’s safe to say you’re having trouble meeting demand.  

    Without a proper business expansion plan, this usually results in one or more of the following scenarios:

    • Reduced Quality: Brands ramp up production to meet demand, but quality decreases.
    • Increased Customer Complaints: Customers become upset with long waits and poor quality and begin to complain.
    • Increased Attrition: Without a strong customer retention strategy, the business begins losing customers.
    • Reduced Volume: Demand for products and services declines because customer expectations are unmet.

    People Problems

    Rapidly growing businesses often fail to define their company structure, or it changes so much that people don’t know what to expect. For instance, people may report to multiple managers or may not receive the communication they need to perform their job well. This creates low morale, burnout, and employee attrition, impacting all business aspects.

    To fill these gaps and those created by business growth, the company hires rapidly, often bringing people on who are not a good fit for the role or company culture.

    Red flags your business is dealing with this include an increase in HR complaints, poor results from employee surveys, and high attrition rates.

    Too Much Focus on the Short-Term

    Many business owners, especially first-time founders, learn on the job. That can work when things are slow, particularly if the owner builds a strong team with experienced professionals. However, it’s virtually impossible to keep up with all the changes and adjust strategies when everything changes quickly.

    • Decisions Based on Feeling: Rather than making decisions based on thorough analysis, decisions are based on feelings and personal desires. For instance, you might develop a product or service based on what you believe people want or how you’d use something instead of what others do.
    • R&D Focused on Short-Term Gains: Rather than developing strategies your business can leverage in the long run or grow into, you spend your R&D investments on immediate gains.
    • Borrowing without Planning: Rather than developing a long-term growth strategy that puts loans toward vetted growth initiatives, the business borrows large sums or stacks loans that are used for immediate needs that it cannot pay off.

    Red flags can vary here, though businesses often struggle with cash flow management and meeting customer demands. There’s also often considerable waste. For instance, the business may not fully utilize its team or space, and inventory may go unused.

    Problematic Cash Flow Management

    All the issues outlined so far can make it difficult to predict cash flow and create and stick to budgets. Over 80 percent of small business failures are tied to poor cash flow management, Small Business Trends reports.

    Leveraging Factoring for Business Growth

    While there are many financial solutions businesses can leverage, invoice factoring offers unique benefits that make it ideal for growth funding.

    Rather than taking out a loan that your business may struggle to repay later, factoring provides instant payment on your outstanding B2B or B2G invoices.

    Rapid growth can create complex financial challenges for any business, including those in the security industry. This is where security factoring comes into play as a reliable solution. By leveraging the value of unpaid invoices, security companies can secure immediate funds needed to meet payroll, hire additional guards, and handle increased operational costs. Factoring offers a flexible way to maintain financial stability and avoid the pitfalls of debt, making it a preferred choice for firms experiencing rapid expansion.

    Similarly, staffing agencies facing rapid expansion can benefit from payroll funding through invoice factoring, ensuring they have the necessary working capital to cover wages without cash flow disruptions.

    Factoring Works Even if You’re Still Building Credit

    Most business funding options only work for businesses with strong credit scores. Invoice factoring doesn’t rely on your credit and may even help you improve your credit score.

    You Receive Working Capital Instantly

    Factoring makes it easy to cover unexpected expenses because you can tap into it as needed, and funding is instant. While this typically means you’ll receive payment within a couple of days, Charter Capital goes the extra mile and can provide same-day payments.

    It Does Not Create Debt

    It’s very easy for rapidly growing businesses to become buried in debt, especially when volume begins to decrease. At this stage, it eats up a significant portion of profit even though the business may only be paying interest and fees and not paying down the principal. Factoring helps companies avoid this fate because it doesn’t create debt. The balance is paid off when your customer pays their invoice.

    Factoring Simplifies Cash Flow Management

    Effective cash flow management begins with creating accurate financial projections. That’s difficult to do when cash inflows are unpredictable and outflows are rising. Invoice factoring takes the guesswork out of it by stabilizing cash flow. You know precisely when you’ll get paid, so you can create a budget and stick to it.

    You Can Focus More

    Decision-making falters when business leaders are stressed and tackling too many things. When you factor, your factoring company collects balances to save you the time and trouble of chasing invoices. You’re also likely to feel less stressed because issues like customer bad debt are reduced, and you can focus on business strategy more.

    Get Started with Factoring for Business Growth

    With more than 20 years of experience, tailored services to meet your unique needs and competitive rates, Charter Capital can help. If your business is facing challenges due to rapid growth, request a complimentary invoice factoring quote.

  • Unlocking Financial Agility: How Invoice Factoring is Revolutionizing Small Business Finance

    Unlocking Financial Agility: How Invoice Factoring is Revolutionizing Small Business Finance

    More small business owners are turning to invoice factoring to cope with economic challenges, a new report shows.

    January 30, 2024, Houston, Texas—Leading invoice funding company Charter Capital says small business factoring is a key strategy among small business owners coping with some of the most significant economic challenges today. Additional coverage of the topic can be found in “Our 7 Favorite Things About Factoring,” now live on charcap.com.

    The report draws on JP Morgan research, which indicates one in four small businesses has just a 13-day cash reserve. With such a small cushion, it doesn’t take much more than a single late payment from a client or unexpected expense to upend plans for even the most meticulous budgeter.

    “Invoice factoring pays out quicker than most funding options,” explains Joel Rosenthal, Co-founder and Executive Manager at Charter Capital. “This makes it ideal for businesses that need to cover critical expenses and don’t have time to wait.”

    He says invoice factoring is unique because it quickly turns unpaid B2B invoices into cash. While this usually means cash reaches the business’s account within a couple of business days, Rosenthal says interest in Charter Capital’s same-day funding options has surged due to the current economic climate.

    He notes that the ability to obtain funding without taking on debt also appeals to small business owners. This aligns with data from the latest Small Business Credit Survey, which indicates that one in three small businesses is having trouble making payments on debt.

    “The high interest rates seen today are making more small businesses debt-averse,” Rosenthal continues. “They’re funneling everything they have into paying down debts, especially those with variable APRs that have become much more challenging to pay off. Being able to obtain funding without adding to that burden is a huge relief.”

    Rosenthal adds that factoring is also flexible, which means businesses can tap into funding as needed. This enables businesses to fill working capital gaps as they emerge and accept orders they might have otherwise turned down due to cash outlay requirements. Because of this, factoring is quickly becoming part of many business growth strategies, too.

    Those interested in learning more about invoice factoring or who would like to request a complimentary quote may do so by calling 1-855-751-7937 or visiting charcap.com.

    About Charter Capital

    Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com or call 1-855-751-7937.

  • Remote Work Productivity: The Ultimate Guide for Employers

    Remote Work Productivity: The Ultimate Guide for Employers

    Remote Work Productivity: The Ultimate Guide for Employers

    The great “return to office” (RTO) is well underway. A new Resume Builder survey shows that nine in ten employers plan to have return-to-office policies in place by the end of the year. Nearly three in ten say they’re prepared to fire employees who don’t comply with these initiatives. Meanwhile, employees are prepared to push back. Roughly six in ten say they’ll look for new jobs if their ability to work remotely is stripped from them, Forbes research shows.

    On this page, we’ll explore some pros and cons of remote work environments and provide tips to keep remote work productivity high if your business plans to stay remote or hybrid.

    Pros of Remote Environments

    Nearly one in five companies operate entirely remotely, Forbes reports. It’s an option with many benefits for employers and employees alike.

    For Employers

    Even though there’s a significant movement toward bringing people back to the office, employers receive many benefits by allowing employees to work remotely.

    Cost Savings

    Employers can save $11,000 for each employee who switches to remote work, Forbes reports. The bulk of the savings come from needing less office space, paired with the diminished resources required to maintain in-person workspaces.

    Wider, More Diverse Talent Pool

    Brands with remote policies can hire employees from just about anywhere, a shift that widens the talent pool and allows businesses to attract the best talent.

    Retention

    In all, 98 percent of employees want to work remotely at least some of the time, Forbes reports. By respecting this desire, particularly as more businesses push their return-to-office initiatives on employees, employers have the potential to boost employee retention.

    For Employees

    Remote work remains the dominant preference for employees, with 65 percent wanting to work remotely all the time and 32 percent preferring a hybrid schedule, per Forbes. While the reasons for this are myriad, a few central themes emerge.

    Flexibility

    Remote employees can often flex their schedules as needed. This means they can work when they’re most productive, shift their days to accommodate family or work from different locations as needed. Flexible hours are the most-desired fringe benefit of remote work, Forbes reports.

    Work-Life Balance

    More than 70 percent of remote workers say working remotely allows them to balance their work and personal life better, Forbes research shows.

    Perceived Remote Work Productivity

    Roughly 35 percent of people feel more productive when working fully remotely, according to Forbes. This can have a major impact on morale and contribute to improved outcomes.

    Greater Happiness

    Overall, people tend to be happier with remote work arrangements. For instance, a 20 percent uptick in happiness was seen in one study, Forbes reports.

     Maximizing Productivity for Remote and Hybrid Workforces

    Evidence suggests that remote work significantly benefits both employers and employees, with many employers observing notable productivity improvements when their teams can work remotely. Among remote workers, the flexibility of hours at home and the absence of a commute often translate into higher productivity levels, contrasting the traditional confines of working in an office. Remote workers often report feeling more engaged and productive at home, highlighting the importance of employers learning how to improve support structures for these employees. For full-time workers, the shift to remote or hybrid models has shown that employees’ productivity is not only maintained but often enhanced, with workers becoming more productive than their in-office counterparts. Essential for remote workers is the ability to maintain a work-life balance, manage their productivity at home effectively, and ensure that the hours spent working contribute positively to their professional outcomes. As businesses continue to adapt, the evidence is clear: fully remote workers and those in hybrid arrangements are not only just as productive at home but, in many cases, prove to be more productive than when they worked in the office. By embracing these insights, employers can foster environments where remote and hybrid employees thrive, underscoring the critical shift towards more flexible work paradigms.

    Cons of Remote Environments

    Despite all the positives of remote work, there are many challenges that businesses and employees must overcome, too.

    For Employers

    Nearly three-quarters of employers that have already moved their teams back to the office at least part of the time say that it has improved revenue, per Resume Builder. This is likely because the shift eliminates some of the most significant challenges associated with remote work, as covered below.

    Maintaining Company Culture

    The majority of execs believe that corporate culture accounts for more than 30 percent of their company’s market value, CNBC reports. Maintaining a strong company culture can be incredibly difficult with employees scattered, which may impact value.

    Communication Barriers

    Pop culture pokes fun at the deluge of Zoom meetings and emails remote employees endure, but the reality is that more than half of all communication is non-verbal, University of Texas research shows. Things like body language and inflection comprise all but seven percent of a message. That means even if your business has systems and tools in place to help streamline communication and help your team collaborate, there will still be difficulties in relaying or interpreting communication most of the time, which diminishes results and can eat away at efficiency.

    Performance Monitoring

    Around 60 percent of companies use performance monitoring software to track their remote employees, Forbes reports. While they can help keep certain employees on track, they also come with privacy concerns, a monetary investment, and can diminish employee morale.

    For Employees

    Even though remote is preferred by most employees, it creates challenges for them, too.

    Isolation

    More than half of all remote workers say it’s harder to feel connected to their coworkers, Forbes reports.

    Overworking

    Remote work strategies often center on boosting productivity but fail to address how the lines between work and home blur for some employees or how hours worked may dramatically increase for some. Moreover, 69 percent report increased burnout from digital communication tools, according to Forbes.

    Employer and Employee Remote Work Tips

    If you decide to keep your team working at least partially remotely, the following tips can help.

    Find Your Balance

    The idea that 90 percent of companies are returning to the office is a bit misleading. Just 19 percent say their employees will be required to attend work in-person five days per week, Resume Builder surveys show.  The rest only require their teams to attend in-person some of the time.

    You don’t need to be fully remote or entirely in-person. For instance, the top remote jobs, according to Forbes, include:

    • Accountant
    • Executive Assistant
    • Customer Service Representative
    • Senior Financial Analyst
    • Recruiter
    • Project Manager
    • Technical Writer
    • Product Marketing Manager
    • Customer Success Manager
    • Graphic Designer

    You may want to keep roles like these remote while bringing other roles back to the office or have specific duties that must be performed in the office while allowing remote work the rest of the time.

    Incentivize When In-Person is Required

    Google made headlines when it announced in-person attendance would become part of its performance reviews. Dubbed the “One thing no company should ever do” by Inc., and the move painted Google in a negative light and gave companies a crash course in how not to handle return-to-office initiatives. Rather than ruling by force, employers do better when providing incentives to encourage employees to return as needed. For instance, 70 percent offer commuter benefits, Resume Builder reports. Catered meals, childcare benefits, and raises also rank high as popular tactics.

    Equip Your Team

    Ensure your team has the tools it requires to work effectively. This involves things like computers and software, as well as clear expectations.

    Adjust Performance Evaluations

    Maintaining productivity remotely may not be the problem some business leaders think it is. Countless studies show remote workers are more productive, as Forbes reports. However, it can be difficult for some leaders to gauge productivity when they don’t physically see the employee. It’s also more difficult for some to rate employees fairly when they don’t have regular contact. Developing a fairer review system that relies on data or the attainment of goals may help.

    Be Transparent

    If tools such as productivity tracking software are required, be transparent about them. Talk to the team about what they track and how they work. This helps eliminate negativity and privacy concerns while allowing employers to obtain necessary data.

    Keep Employees Engaged

    Even though employees may be remote, they can remain engaged. Teams benefit when employers foster collaborative remote environments, invest in development, provide support through employee wellness programs, and maintain open lines of communication.

    Obtain the Working Capital You Need Through Invoice Factoring

    Even though going remote can reduce overhead, many companies still experience cash flow gaps, especially as the business grows. Invoice factoring can provide instant payment on your B2B invoices so that you can cover essential expenses such as payroll, equipment for remote employees, and more. To learn more, request a complimentary factoring rate quote from Charter Capital.

    Remote Work Tips
  • Business Expansion Timing: How to Know When to Grow

    Business Expansion Timing: How to Know When to Grow

    Business Expansion Timing: How to Know When to Grow

    Getting business expansion timing right can be tricky. While expansion can increase profit and allow you to grow your customer base dramatically, it also makes your business vulnerable, especially if you don’t address underlying issues before scaling. On this page, we’ll explore some common signs it’s time to grow, red flags that indicate you have things to address first, and cover tips for planning your expansion.

    Positive Business Growth Indicators

    It may be time to grow if your business is showing signs it’s ready for expansion like the ones below.

    You Have a Solid Customer Base Demanding More

    One of the first things to consider when assessing readiness for expansion is whether customer demand warrants it. Your customer retention rates are a key indicator here. Find out if your current customers stay with your company and remain happy. A few other signs that demand may call for expansion include:

    • Website traffic from areas you don’t serve but could.
    • Searches on your website for products or services you don’t offer but could.
    • Customers who travel a long distance to visit a physical location.
    • Customer requests for expansion.

    Your Team is Ready

    Is your team prepared to take on additional duties? Do you have proper staffing levels, and is everyone fully trained? If so, they’ll be instrumental in helping your business reach the next level.

    You’re Already Pressed for Space

    Do you have a line out the door, more inventory than you have space, or so many desks that you can’t fit another employee? These can all be positive signs it’s time to add a location. However, it’s worth exploring other avenues, such as automation, outsourcing, and procuring storage space before you commit to a complete expansion project.

    You Have Stable and Strong Operational Processes

    If your operational processes are replicable and scalable, they’ll likely see you through your expansion. If you’re presently experiencing any issues related to efficiency or output now, they will multiply when your business expands.

    You’re Experiencing Consistent Revenue Growth and Profitability

    Just as issues in your operational processes will grow as your business does, issues with revenue and profitability will scale with your business, too. However, if your company has been showing steady growth and ongoing profitability, it’s a positive sign that you’re ready for business expansion.

    You Have a Clear Vision for the Future

    Sometimes, business owners try to scale their companies because it seems like the next step or something they should do, but they haven’t thought about what the future looks like, and their hearts are not really in it. This creates issues as the business scales. It’s better to stay small if you’re not excited about growing or don’t have ideas about how to scale your business and a vision for the future.

    Potential Risks of Expanding Too Soon

    Even if your business is giving some signs it’s ready, ignoring warning signs that it’s not and failing to address underlying issues can have serious consequences. Below, we’ll quickly review some common expansion risks so that you can manage them before you scale.

    You Can Spread Yourself Too Thin

    There’s only one of you. If you don’t have resources in place and aren’t prepared to delegate, you’re likely to burn out.

    You May Lose Touch with the Business and Customers

    Business expansion consumes a lot of energy and will likely be your focus for some time. If you’re not prepared for this, it’s easy to lose touch with what your customers want and need.

    You May Outgrow Your Space

    If adding space or a new location isn’t part of your expansion plans, you may quickly run out of room for inventory, administrative functions, and other business operations.

    You’re Likely to Experience a Cash Shortage

    When most businesses grow, they use yesterday’s lesser revenue to fund today’s higher expenses. Small businesses are especially vulnerable to cash shortages in these situations because they operate with thin margins and don’t generally have savings to cover the difference.

    Access to Working Capital Will Be Limited

    Rapid growth can cause unprepared businesses to crash and burn. Lenders know this and may be unwilling to provide you with funding due to the increased risk.

    The Quality of Products or Services May Decline

    If you don’t have processes in place to ensure scaling goes smoothly, work tends to get sloppy. You may start to experience more customer complaints and quality assurance issues. While this may not seem like a huge deal at first, it can cause irreparable damage to your brand.

    Staff Morale is Likely to Plummet

    Businesses that scale without putting resources in place first run the risk of overworking their employees. This kills morale and can lead to turnover at a time when retaining talented, experienced team members is crucial.

    The Entire Business May Fail

    Expanding too fast is one of the top reasons businesses fail, Investopedia reports. When you expand too fast, you’re likely to experience several of these issues all at once, which can cause your core business to fail even if it performed well before expansion.

    How to Prepare Your Business for Successful Expansion

    While the risks of expanding too soon are concerning, you can safeguard against most of them. We’ll provide a few tips on how to do this below.

    Set Clear Expansion Goals

    There are lots of ways to expand your business. Map out your plan, complete with milestones, so it’s easier to plan for each stage.

    Gather Resources and Capital

    The small business community is underserved by traditional lending options, and most businesses do not receive all the funding they need. Before you begin, identify alternative ways to obtain working capital, such as invoice factoring. Also, ensure you have the people and tools required to handle the new workload before starting.

    Seek Expert Guidance and Mentorship

    Connect with lawyers, accountants, funding specialists, consultants, and other experts who can guide you through the process and provide advice. Get honest feedback from your advisors and proactively explore potential issues in your expansion plans. That way, you can fill gaps and address issues before they cause a problem.

    Optimizing Growth Strategies: Expanding Your Business into New Markets

    Expanding your business is an ambitious yet achievable goal that requires a blend of strategic planning and acute market insight. For small businesses and larger enterprises alike, the journey toward business growth encompasses a variety of growth strategies and types of business expansion, each tailored to the unique needs and aspirations of the business. At the heart of successful business expansion strategies lies the imperative to not only grow your customer base but also to enhance your product or service range, ensuring that new offerings resonate with both existing and potential customers.

    Delving into market research is indispensable for businesses aiming to expand their market reach or explore new markets. It enables business owners to make informed decisions about the best strategies to expand their business, including entering new locations, tapping into international markets, or even starting a franchise. A comprehensive business expansion plan should consider the current market conditions, identify the target market, and leverage marketing strategies that promote effective growth and market penetration.

    Moreover, expanding into new markets or diversifying your product lines can dramatically enhance your market share and drive revenue growth. However, this endeavor requires a detailed understanding of market trends, customer demands, and the competitive landscape. Strategies such as market segmentation, robust marketing plans and engaging in marketing efforts targeting new customer segments are crucial for achieving sustainable growth. Expanding into a new market and tapping into new customer bases require strategies to grow your business that are both innovative and focused on long-term success.

    Businesses looking to diversify or strengthen their market presence must also consider the potential for franchise opportunities or the development of new products or services that meet the evolving needs of their target market. Expanding your business into new markets or sectors can offer new opportunities and challenges, but with the right expansion strategy, including thorough market research and a clear understanding of your business goals and objectives, businesses can navigate these waters successfully.

    Ultimately, the decision to expand should be based on a strategic assessment of your business’s current performance, growth potential, and specific business expansion strategies that align with your long-term vision. Whether it’s expanding your operations, exploring new market opportunities, or leveraging existing business assets for growth, the path to expansion is multifaceted. By focusing on strategies that help your business grow, such as tapping into new markets, offering new products or services, and enhancing your market reach, you can ensure that your expansion efforts lead to effective growth and help take your business to the next level. Strategies to expand your business and promote growth are essential for navigating the complexities of entering new markets and achieving long-term success.

    Prepare for Business Expansion with Invoice Factoring

    Invoice factoring is an ideal funding solution when you’re expanding because most businesses with B2B invoices qualify. Plus, you can get established with a factoring company like Charter Capital before you need funding, so it’s easy to obtain cash when you do. Factoring also scales with your business and allows you to tap into additional funding as your business grows. To learn more or get started, request a complimentary factoring rate quote.

    6 Signs Your Business Is Ready to Grow | Business Expansion Timing: How to Know When to Grow
  • Our 7 Favorite Things About Factoring

    Our 7 Favorite Things About Factoring

    Our 7 Favorite Things About Factoring

    If your business needs to accelerate customer payments, experiences cash flow gaps or faces unexpected expenses, invoice factoring can be a lifeline. It’s a form of alternative business funding that allows you to sell your unpaid receivables at a discount to a third party and receive instant payment. Most businesses are approved, even if they’re newer or don’t qualify for a loan, because factoring doesn’t rely on the same rigid criteria that banks use. This makes it a very unique funding solution, but it’s only the start of what sets it apart. On this page, we’ll share seven of our favorite things about factoring so you can better understand how it works and how it might benefit your business.

    1. You Receive Immediate Access to Capital

    Around a quarter of small businesses have less than a 13-day cash reserve, according to JP Morgan. In these situations, something as small as a single late customer payment or unexpected expense can make it impossible to cover critical expenses like payroll and inventory.

    Most traditional funding solutions are not designed for these kinds of situations. It can take weeks to get approved. Months may pass before the business receives the payout. Invoice factoring is different. If you’re diligent with documentation, your initial approval will usually arrive within days, if not sooner.

    Moreover, businesses typically receive their advances within two business days, deposited directly into their bank accounts. You may also qualify for same-day payments when you work with a factoring company like Charter Capital. Because factoring offers immediate access to capital, it’s often the best funding solution for businesses that need a quick injection of capital to maintain normal operations or bid on a project.

    2. Your Business Doesn’t Accrue Debt

    Although debt can sometimes be helpful, particularly when it empowers the business to grow and boost its credit score, issues relating to debt management have been increasing in recent years. Around one-third of small businesses say making debt payments is a challenge, according to the latest Small Business Credit Survey. Close to two-thirds indicate their business is in fair or poor financial condition.

    Invoice factoring doesn’t create debt. The advance is paid off automatically when your customer pays their invoice. You’re free to move forward without worrying about making extra payments and may even improve your credit score due to the increased ability to make timely payments.

    3. It Improves Customer Credit Management

    Slow and delinquent payments are a common issue for small business owners. Around ten percent of payments are either never paid or paid so late that the business has no choice but to write them off as bad debt, CPA Practice Advisor reports. It’s more than a nuisance. These issues impact your ability to make payments and increase time spent chasing invoices. Research also shows that business borrowing increases with slow and late payments, per Insightful Accountant. This means the payment behaviors of your clients directly impact your debt and overall financial health.

    Thankfully, factoring addresses these issues in a couple of different ways. First, your factoring company runs credit checks on your clients before factoring invoices. You learn how much credit you can extend to each client without exposing your business to unnecessary risks. Secondly, your factoring company collects the balances for you, so invoices are typically paid much quicker. You’re far less likely to have to write balances off as bad debt, too.

    It’s also worth noting that you don’t have to change your payment terms to achieve these benefits. If giving your customers a longer payment window helps you maintain stronger relationships or win more bids, you can keep doing this and still benefit from improved cash flow.

    4. You Gain Financing Flexibility

    Factoring helps keep businesses agile. You can use it as needed for virtually any situation. For instance, some leverage it to fill cash flow gaps as their business grows, while others factor invoices as they ramp up to meet seasonal demands or fulfill larger orders.

    It’s also one of the few funding solutions that automatically scales with your business. As your invoice values or volume rises, your access to capital rises with it. Plus, you can use it when you want. You don’t need to factor all your invoices or factor all the time, so you have more control over your cash and how you put it to work.

    5. It Fuels Growth

    Capital from invoice factoring can be used to fund growth-related initiatives such as business expansion, launching new products, and marketing campaigns. Charter Capital clients have achieved significant results through factoring, such as doubling their client base and growing 56 times bigger in just a few years, case studies show.

    6. It Gives You Time Back

    More than two-thirds of small businesses spend 14 hours each week on administrative tasks related to collecting payments, QuickBooks research shows. Because your factoring company collects for you, your company gets much of this time back. Put it toward growth-related activities, customer-focused tasks, and more.

    7. You Gain an Experienced Partner

    When you work with an invoice factoring company like Charter Capital that knows your industry, you gain an experienced partner who can help your business reach new heights. Your team may be able to help you address growing pains, provide financial advice, provide additional services, and link you up with other pros who can streamline your operations and grow a stronger company.

    Maximizing Business Growth with Invoice Factoring

    When it comes to business, achieving a steady cash flow and immediate access to capital are critical factors that drive growth and operational efficiency. Invoice factoring, a powerful form of accounts receivable financing, stands out as an essential tool for businesses aiming to bridge the gap between billing and payment periods. By leveraging factoring services, companies can instantly convert their accounts receivable into working capital, providing a lifeline to improve liquidity and fund expansion without incurring debt. Factoring allows businesses to sell their outstanding invoices to a factoring company at a discount, thus receiving immediate funds usually within 24 hours. This process improves cash flow and reduces overhead costs associated with chasing down payments, thereby improving operational efficiency. One of the advantages of factoring accounts is its ability to provide flexible financing solutions that adapt to the company’s growth, unlike traditional loans, which might involve lengthy approval processes and monthly payments.

    Furthermore, factoring offers a strategic advantage for businesses in need of short-term cash solutions. It benefits businesses by alleviating the burden of debt collection and improving credit management. Factoring companies assess the creditworthiness of your customers rather than your business, offering a unique form of financing that can be particularly beneficial for new businesses or those with less-than-perfect credit. Non-recourse factoring further enhances this benefit by protecting businesses against the risk of customer default.

    Factoring services also contribute to a business’s competitiveness in various industries by ensuring liquidity is available to pay invoices, purchase inventory, and even take on new projects. For example, businesses like security guard firms can benefit from security factoring, which helps maintain steady cash flow despite delayed payments from clients. The immediate cash provided through factoring can help companies manage their balance sheets more effectively, fund significant portions of their operations, and utilize immediate funds to meet their short-term needs. It’s a transaction that facilitates immediate payment on outstanding receivables and offers a pathway to growth and financial stability without relying on traditional debt financing.

    Learn more about the benefits of factoring and how factoring can help companies to not only survive but thrive in today’s competitive market. Factoring provides a non-traditional loan alternative that improves cash flow, enhances liquidity, and supports business expansion. Contact Charter Capital to discover how factoring works and to explore a factoring agreement tailored to your business’s unique needs. Factoring helps businesses pay their invoices on time and continue their journey toward success without the financial strain tied up in unpaid receivables.

    Request a Free Charter Capital Invoice Factoring Rate Quote

    With decades of experience, experience across a wide variety of industries, and competitive rates, Charter Capital can help your business reach the next level through invoice factoring. If factoring sounds like the ideal business funding solution for your needs, request a free rate quote.

    7 Benefits of Factoring with Charter capital infographic | Our 7 Favorite Things About Factoring
  • 11 Common Startup Mistakes First-Time Founders Make

    11 Common Startup Mistakes First-Time Founders Make

    11 Common Startup Mistakes First-Time Founders Make

    Starting a business is not for the faint of heart. One in five fails within the first year and half close within five years, Investopedia reports. Less than one-third make it to ten years. While these statistics may seem grim, most of these closures can be directly attributed to just a few common startup mistakes. On this page, we’ll walk you through some entrepreneurial challenges you’ll likely face in the early years and how to avoid the business founding mistakes that trip most people up.

    1. Having a Product or Service That Doesn’t Solve a Problem

    You may see the value in what you’re offering, but do others? Often, people close to a business don’t realize there’s no market for their product or service. Think critically about what happens when you tell others unfamiliar with your company what you do.

    • Do people seem confused by the concept?
    • Do people stay mostly quiet or clam up beyond giving basic congratulatory messages?
    • Do you spend a lot of time explaining what you do or how it works?

    If so, there might not be a market for your product or service. Consider doing more market research to see if there is a way you can adjust your offering to fill an unmet need.

    2. Following Bad Advice

    Everyone will have advice on how you should run your company. However, most people will have no experience running a successful startup. Skip the advice from well-meaning friends and family.

    It may be helpful to connect with other entrepreneurs but remember that they’re also experiencing a large learning curve. Even if someone has found something that works for them, that doesn’t mean their solution is viable in the long run or isn’t creating more problems they haven’t discovered yet. Take this advice with a grain of salt.

    If you’re stuck, defer to an expert. That may mean bringing in finance pros, tax specialists, lawyers, consultants, and more. Also, keep a pulse on your customers. While they may not be able to help you run a profitable business, they are experts in knowing what they want and need.

    3. Not Scheduling Downtime

    The average CEO works close to 12 hours per day, according to Harvard Business Review. In the tech industry, CEOs clock 14-hour days, First Round reports. People can’t sustain this kind of momentum in the long run. It impacts stress and sleep, which often leads to needless mistakes and burnout.

    You may be thinking that the extra hours are essential. You have work to get done. However, the hard truth is that you probably aren’t getting more done when you put in extra hours. Productivity declines sharply at the 50-hour mark. People who work 70 hours per week are no more productive than they would have been if they’d worked 55 hours, CNBC reports.

    Schedule your days in a way that ensures you get time away to rest and rejuvenate. Your performance, and therefore likely business performance, will be better as a result.

    4. Hiring Too Fast

    First-time founders are usually eager to begin hiring. Bringing in extra bodies can help your business grow and allow you to delegate more tasks. However, when businesses hire too fast, they often wind up with people problems such as:

    • Employees who aren’t a good fit for their role.
    • A lack of culture fit.
    • Slow or poor onboarding and training.
    • More employees than needed.

    Bring on newcomers strategically. Evaluate outsourcing specific tasks or processes before creating full-time roles. When you do hire, choose the roles you fill carefully and try to resist the urge to hire someone simply because they’ve worked at a startup before. Evaluate each candidate’s skills, knowledge, and culture fit before moving forward.

    5. Not Defining Job Roles

    You’ve probably seen job descriptions, or maybe even written ones, that ask for a “rockstar” or “Jack of all trades.” This tends to be code for: “I want someone who can do everything.” Unfortunately, nobody is good at everything, and those who try to do it all for you will wind up burning out.

    Instead, create clearly defined job roles. This will make it easier to find the right person for each role, ensure their deliverables are understood, and help you measure their success in the role.

    6. Overestimating Revenue

    It isn’t easy to gauge how much money a business will make when it’s just getting started. While you can leverage market data and compare similar businesses, you’re still using figures generated by established companies to create your projections. Generating brand awareness and developing an audience takes a considerable amount of time. During this time, you’re also developing processes and building the infrastructure to do business, which may impact how much work you can take on and the resources you have to apply to growth initiatives.

    Expect a very slow start and give your business time to ramp up. If you’re unsure what this looks like for your industry or business, connect with a consultant who does.

    7. Forgetting to Build Scalability into Processes

    Startups tend to develop processes as they go. For instance, you may be managing several departments as a founder. That means you’ve probably set up all emails and online lead generation forms to forward directly into your inbox. You process these things using your preferred methodology, and then they “evaporate.” There’s no trail to show what you’ve done. All information is stored in your head. Nobody but you knows what happened or what else the person might need. This is common with most business processes in a startup. It creates major headaches as the business grows and more team members are brought in.

    As you develop your internal procedures, consider how things will need to be handled as you grow. Try to develop processes that will scale with you and get the systems in place early. That means you’ll probably need tools like customer relationship management (CRM) and accounting software. As an added benefit, you can use these tools to begin automating many of your processes now. It’ll save you time and allow you to focus on growing your business.

    8. Underestimating Costs

    Remember when you moved into your own home for the first time? There were so many things to buy. The costs, from linens to cleaning supplies and paying utilities, really added up. It’s the same way when you’re starting a business.

    Make a detailed list of potential expenses and carefully check your estimated costs. It’s also helpful to leave yourself a cushion to ensure you have cash for unexpected expenses and build an emergency fund.

    If you’re planning to bring on freelancers or independent contractors, make sure you understand how that affects your budget, too. While you won’t have to carry the expenses of traditional employees or directly pay a portion of their premiums, health insurance for independent contractors can be pricey, and contractors often charge higher rates to help offset those and other self-employment costs.

    9. Not Managing Cash Flow Effectively

    The top reason businesses fail is because their money ran out, Investopedia reports. Note that this is an entirely different problem than a lack of profitability. If you have expenses that need to be paid but won’t have the cash for another month when your clients pay their invoices, your business will be in trouble.

    Perform cash flow projections and monitor your cash flow at least weekly. Maintain your cash cushion and set up a backup funding source like invoice factoring to ensure you can close cash flow gaps before they become a problem.

    10. Growing Too Fast

    Rapid growth is often viewed as a champagne problem, but it can be quite serious because you’re trying to cover today’s higher expenses with yesterday’s lower revenue. You may not have the infrastructure or resources to ramp up quickly either. This is when companies start having problems like coming up short at payroll, not having cash to procure supplies, and feeling tempted to hire without a strategy. Customer satisfaction often falters, too, which can damage your company’s reputation.

    If cash flow issues are holding you back from taking on more work, your reserve and backup funding can allow you to push forward. If you’re missing the processes and infrastructure to level up, limiting the amount of work you accept may be better until you’re ready for it.

    11. Failing to Pivot

    You probably started your business with a vision and determination to make things work. Perseverance is crucial, but knowing when to let go of your plans and pivot is equally important.

    Monitor the market and how people respond to your offerings, finances, and organizational processes. You will need to refine these strategies as your company grows. It’s not a failure to change things up. It’s resilience, and it can help ensure your business stands the test of time.

    Navigating Startup Challenges: Essential Mistakes to Avoid

    For every entrepreneur venturing into the world of startups, understanding and avoiding common startup mistakes is crucial for laying the foundation of a successful business. From the initial excitement of launching a new business or small business, many founders often overlook the significance of conducting thorough market research, creating a robust business plan, and developing a marketing strategy that resonates with prospective customers. One of the biggest mistakes startups make is failing to monitor cash flow and neglecting continuous feedback, which can lead to a lack of product-market fit and, ultimately, the startup’s failure Additionally, you need to make a business plan that addresses startup growth, customer experience, and the right team composition to ensure the success of your business. Learning from the mistakes and pivots of others, making any needed adjustments, and providing a thorough understanding of the market need are essential steps to avoid the common pitfalls that lead to the statistic that 9 out of 10 startups fail. By focusing on these key areas, new business owners can significantly reduce their chances of making common startup mistakes, thereby enhancing the likelihood of their startup’s growth and long-term viability.

    Avoid Common Startup Mistakes with Invoice Factoring

    Invoice factoring provides instant payment on your B2B invoices, so you can close cash flow gaps and have money as needed for crucial expenses like payroll or ramp-up. It also helps address other issues, such as the time you spend chasing invoices. Plus, it can be a very flexible funding solution when you partner with a factoring company like Charter Capital. Request a complimentary rate quote to get started.

    11 Common Startup Mistakes Infographic
  • 12 Ways Small Businesses Can Leverage AI in Business Growth

    12 Ways Small Businesses Can Leverage AI in Business Growth

    12 Ways Small Businesses Can Leverage AI in Business Growth

    Integrating machine learning (ML) and artificial intelligence (AI) in business growth initiatives may seem like a daunting process, but the reality is that you’re probably already leveraging these tech innovations, or they’re available with tools you’re already using. In fact, nearly two-thirds of business leaders have already invested in AI and automation tools, HubSpot reports.

    The high adoption rates are undoubtedly because there’s room for AI in virtually every business process. Integrating it can boost efficiency, improve decision-making, increase profit, and more, to stimulate business growth and make it easier for your company to scale.

    What Are Artificial Intelligence and Machine Learning?

    Before we begin, it’s helpful to understand what AI and ML are and explore common examples.

    Artificial Intelligence (AI)

    Programs that leverage AI mimic human thinking. They can perform tasks and “learn.”  Alexa and Siri, the voice assistants, are powered by AI.

    Machine Learning (ML)

    ML is a subset of AI. Programs that leverage it are powered by algorithms that create models to perform tasks. The programs analyze data sets to “learn.” Your antivirus software likely uses ML. It may not know every virus that exists, as new viruses emerge daily, but it knows the patterns viruses commonly exhibit and quarantines anything that looks suspicious.

    Generative AI

    Generative AI is getting a lot of press these days. It’s a form of ML. Generative AI programs analyze large amounts of data to produce content or perform tasks and attempt to mirror human behavior. ChatGPT, powered by Open AI, is one of the first well-known examples, though many software companies integrate it now.

    12 Ways Small Businesses Can Leverage AI in Business Growth

    Now, let’s look at some ways you can leverage AI to support your business growth.

    1. Gaining Customer Insights

    Because AI can scan large data sets and identify trends quickly, it can help you gain insights into your customer base and what they like. Frito-Lay, for example, discovered that one in six residents in Frisco, Texas, is of Indian descent, Fortune reports. The company already had a spicy chip that performed well in India, so it began selling it in Frisco with great success.

    If you’d like to apply this on a smaller scale, consider implementing a customer relationship management (CRM) tool that leverages AI or ensure your marketing team has access to analytics tools that can analyze customer data for patterns.

    2. Developing New Revenue Streams

    AI is now used to identify ways businesses can create new revenue streams. For example, a new medication for treating pulmonary fibrosis that was created with AI is now in clinical trials, Clinical Trials Arena notes. TaylorMade jumped on the bandwagon with AI-designed golf clubs, too, as Sports Illustrated reports.

    3. Strengthening Customer Support

    Four in five businesses that improve the customer experience report greater revenue, Dimension Data reports. Thankfully, AI is seemingly everywhere in customer service today. For instance, chatbots field customer concerns or route customers to the information they need. Customer support software also routes people to the right agent based on details like the product involved, account size, number of recent calls, and preferred language. These advances reflect a broader shift in how AI is being used in customer service to deliver faster support and more personalized experiences.

    4. Maximizing Marketing Performance

    AI-driven marketing has exploded in recent years. Marketing teams are leveraging generative AI to streamline content creation, such as blogs and graphics. Many paid advertising platforms also make real-time campaign adjustments for bidding or to determine which ad content is most likely to convert and should, therefore, be displayed. Predictive analysis gauges how customers are likely to behave and who should be targeted.

    AI is also used in personalization, which makes campaigns more effective and enhances the customer experience. For instance, websites can be “trained” to display different content based on the visitor. It can also help provide personalized recommendations on websites and in email campaigns.

    5. Supporting Sales Teams

    Sales teams are more effective and efficient with AI-driven CRMs. Many offer routing tools to ensure the right representative receives each lead. Leads can also be scored through AI, making it easier for teams to prioritize leads most likely to convert.

    6. Making Informed Business Decisions

    Nearly two-thirds of business leaders are already leveraging AI to make more informed operations and maintenance decisions, PwC research shows. At a basic level, this includes data analysis to gauge success. However, programs can also make predictions or conduct multiple simulations at once to help leaders make choices that will lead to the best possible outcome.

    7. Enhancing Productivity

    If your business is completing any administrative tasks on a recurring basis, chances are those tasks can be automated. This not only saves time but allows employees to focus on customers and can boost morale, too – all of which is helpful when you’re trying to grow your business.

    Operational efficiency skyrockets when automation is leveraged to manage repetitive tasks. For instance, AI tools can listen to meetings and convert discussions into condensed notes. Project management tools allow you to scan handwritten notes and automatically transcribe them.

    Automation is also used heavily in communication, such as reaching out to customers with marketing messages at the right time, sending invoices, and following up when customers don’t take action.

    8. Simplifying Recruiting and Talent Sourcing

    Most HR departments at large companies are already leveraging AI in some capacity. For instance, various programs scan resumes to create a shortlist of candidates. Some will automatically send “thanks for your time” messages to people who don’t make the cut, then ask the remaining candidates to answer questions or complete assessments.

    9. Optimizing Pricing

    Businesses that increase prices just one percent boost operating profit by almost nine percent on average, provided they don’t lose sales in the process, McKinsey studies show. However, avoiding a drop in sales is easier said than done. ML makes it easy for brands to see which products can bear an increase and is now commonplace in pricing optimizations. Amazon, for example, leverages it.

    10. Forecasting Demand

    AI can help you identify when to ramp up production and where need will increase. For instance, a roofing producer wanted to understand which areas would be impacted by hurricane season, Climate.ai reports. Knowing how significant the impact would be and which areas would need the most help rebuilding would allow the company to have supplies waiting in advance. AI predicted that Florida would be hit hard. The company increased production of shingles commonly used in Florida and had them ready when the hurricane hit. The AI predictions were more accurate than those made by climatologists, so other suppliers were unprepared for the rise in demand. The company leveraging AI, however, captured an additional $15 million in sales.

    11. Improving Employee Morale

    Companies with highly engaged employees are 21 percent more profitable, Forbes reports. Newer AI programs can identify dips in performance that signal an employee is struggling and needs support, according to the World Economic Forum. This allows HR and leadership to step in to help prevent employee burnout. Companies are leveraging it to create tailored compensation plans. It can also nudge them toward the right resources in real-time and assist with schedule optimization.

    12. Financial Forecasting

    Businesses need accurate financial forecasts to measure progress, identify potential issues, and make informed spending decisions. Advanced business finance and accounting tools take care of the forecasting for you, so it’s easier to see how you’re performing, when you can invest, and when you might have a cash flow shortfall that needs to be addressed.

    Grow Your Business with Invoice Factoring

    Whether you need cash to invest in new AI technology, for other growth initiatives, or to bridge cash flow gaps as you scale, factoring can help by unlocking the capital in your B2B invoices. To learn more or get started, request a complimentary factoring rate quote from Charter Capital.

    12 Ways To Leverage AI For Business Growth | 12 Ways Small Businesses Can Leverage AI in Business Growth

    Frequently Asked Questions About AI Tools for Small Business

    Below are a few FAQs about AI tools for small businesses.

    What Are the Benefits of AI for Small Business Owners?

    AI offers small businesses the ability to streamline operations, enhance marketing campaigns, and make better data-driven decisions. Whether you’re looking to scale or improve efficiencies, AI can reduce manual tasks, respond faster to customer needs, and support strategic decision-making based on real-time insights.

    How Can Businesses Use AI to Improve Operations?

    AI can automate routine tasks, optimize pricing, enhance forecasting, and provide customer insights. These tools reduce human error, improve team productivity, and deliver actionable insights faster than traditional methods, making AI valuable for businesses of all sizes.

    What Are the Best Practices for Implementing AI in Your Small Business?

    Start by identifying repetitive or time-consuming tasks that could be streamlined. Evaluate both free and paid tools, train your team on proper usage, and ensure data privacy protocols are in place. Integrating AI gradually helps ensure a smooth transition.

    What Are Some Common AI Tools for a Small Business to Use?

    Popular AI tools include chatbots, content generators, predictive analytics platforms, and CRMs. These solutions help automate marketing, manage sales leads, and analyze customer behavior, making them accessible even to small businesses with limited tech resources.

    How Can AI Help Small Businesses Make Better Decisions?

    AI analyzes large datasets quickly to provide real-time insights. This helps personalize marketing, forecast demand, optimize inventory, and guide investment strategies with more accuracy than traditional analysis.

    Is it Expensive to Implement AI Solutions?

    Costs vary depending on your needs, but many tools are free or offer affordable AI products. As AI adoption increases, small businesses now have access to cost-effective solutions that were once only available to larger enterprises.

    What Are Some Examples of How Businesses Can Use AI?

    Businesses use AI to automate customer support with chatbots, generate content, personalize product recommendations, and run data-driven marketing campaigns that improve engagement and conversion rates.

    What Types of Marketing Tools Can AI Enhance?

    AI improves targeting, personalization, and campaign performance. It helps optimize email campaigns, ad placement, and customer segmentation while adjusting messaging in real time to match customer behavior.

    Are AI Tools Accessible to All Small Businesses?

    Yes. Many platforms integrate AI into their existing systems, such as HubSpot, making features like chatbots, lead scoring, and automated content generation available at little or no cost.

    Can AI Be Used for Customer Support and Engagement?

    Absolutely. AI-powered tools improve customer engagement through chatbots, automated follow-ups, and sentiment analysis, ensuring faster response times and better service quality for small teams.

    What is the Role of AI in Content Creation?

    AI assists with content creation by generating blogs, product descriptions, and social media updates. While human oversight is essential for tone and accuracy, AI reduces workload and helps maintain a consistent brand voice.

    Where Can Business Owners Learn More About AI Adoption?

    Business owners can explore AI through online courses, webinars, and resources provided by organizations like the Small Business Administration. Guides on AI tools for small businesses also help identify the best options based on specific needs.

    What Does AI Usage Look Like Across Small Businesses Today?

    Small businesses are using AI for customer service, finance, HR, and sales. AI helps them compete with larger companies by improving workflows, accuracy, and scalability.

    How Can AI Support Small Business Growth in the Long Term?

    AI supports long-term growth by reducing overhead, improving customer retention, and enabling data-driven decision-making. As adoption increases, staying competitive will depend on agility and effective AI integration.

  • 4 Key Areas Your Resilient Business Model Must Address

    4 Key Areas Your Resilient Business Model Must Address

    resilient business model | 4 Key Areas Your Resilient Business Model Must Address

    Developing a resilient business model is essential when you’re trying to future-proof your company. This page will walk you through the basics, including what resilience means in a business sense, what to look for if you perform an audit, and areas to address as you refine your business model for greater resiliency.

    What is Business Resilience?

    More than a half million small businesses fail annually, the Chamber of Commerce reports. This is under normal circumstances and doesn’t consider market fluctuations or enduring challenges like pandemics. Conversely, resilient businesses are more likely to thrive. They prepare for, adapt to, and respond to changes quickly.

    Traits of a Resilient Business Model

    Before we get into how to create a resilient business model, let’s explore what one looks like.

    • The company anticipates changes to the operating environment.
    • The company develops and tests plans that will help it navigate those changes.
    • The company allocates resources and enables success in multiple potential futures.

    Business Resilience vs. Enterprise Risk Management

    Business resilience is often treated as a synonym for risk management. While risk management is part of a resilient business strategy, a resilient business doesn’t just mitigate risk. It finds the upside in challenging situations, too.

    Business Resilience vs. Business Continuity

    Sometimes, business resilience and continuity are considered the same as well. Continuity is more about ensuring your business operations aren’t impacted during a crisis or that it bounces back quickly if an outage cannot be prevented. Continuity is built into a resilient business model. However, a resilient business also adapts to changing times and needs. It’s concerned with how the business will operate in multiple potential futures, not just getting back on track if a roadblock appears in one intended future.

    How to Measure Resilience of a Business Model

    It’s a good idea to audit your current business model before you make changes and to test out how any changes you make impact your business. You can use metrics in the following areas to tell if your model is successful and identify areas of opportunity.

    Risk Management

    Is your company identifying and addressing risks, or are things slipping through the cracks until you hit a crisis point?

    Response Time

    How long does it take your company to recognize when it has a problem and begin trying to solve it? Consider a variety of situations, from security threats to natural disasters.

    Recovery Time

    How quickly does your team solve problems? Are you losing time to disorganization, a lack of resources, or other issues?

    Adaptability

    Can company leadership pivot as needed, when a crisis arises, or as customer needs change?

    Financial Stability

    Is your cash flow stable? Do you have solutions in place that can help if you face a cash flow disruption?

    4 Keys Areas Your Resilient Business Model Must Address

    Now that we’ve reviewed the background, let’s explore what to cover as you develop a more resilient business model.

    1. Revenue Stability and Recovery

    Businesses with one or two revenue streams are more vulnerable to change. Identify new ways your company can generate revenue or stabilize it, such as adding new products or services or developing subscription-based options.

    Also, determine how your business will obtain cash if revenue is impacted. While loans can work for some well-established businesses, not everyone qualifies, they can take weeks or months to pay out, and tend to dry up in times of economic uncertainty. An alternative like invoice factoring may be ideal because you can become established with a factoring company and not factor invoices until you need to. This provides flexibility and fast payments while allowing you to maintain greater control over costs.

    2. Operational Strength

    Redundancy and diversity are central themes when developing a resilient business model, especially regarding business operations.

    Supply Chain  

    All businesses will deal with supply chain disruption at some point. While most tips center around having multiple suppliers to avoid issues, a resilient strategy also addresses how the business can manage with fewer supplies or without certain supplies.

    Cost Transparency

    Move to digital recordkeeping for expenses so it’s easier to budget and allocate resources effectively.

    Workforce

    Brands that leverage modern approaches, such as building a remote workforce and leveraging automation, work more efficiently and can often pivot more easily.

    3. Organizational Preparedness

    Mindsets and the structure of your teams may need to be adjusted for greater resilience, too.

    Empowered Leadership

    Change starts from the top and works its way down. Ensure leadership is on board with changes and understands that shifts for greater resilience are a way to future-proof the company.

    It’s also imperative to ensure that leaders have the ability to make decisions as needed, as well as the training to make effective ones. Businesses that sometimes stall out during decision-making may consider implementing the 40/70 rule. It essentially states that leaders should have at least 40 percent of the information needed to make a decision but no more than 70 percent. That way, the organization doesn’t make poor decisions based on gut feelings or face “paralysis by analysis.”

    Upskilling and Reskilling

    It’s easier to learn new business skills than most people think. Consider implementing upskilling and reskilling programs to help your team become more resilient and agile. Upskilling centers on providing employees with skills to help them perform their current jobs better or more efficiently, so it’s an excellent way to strengthen your workforce and prime employees for advanced roles. It also boosts morale. Reskilling involves teaching employees how to perform new jobs. This is also a boon for morale, but more importantly, it allows you to keep valuable team members and shift roles as needed.

    Teams

    Many companies are shifting to smaller multidisciplinary teams rather than operating in large, siloed departments. This breaks down barriers, boosts collaboration, and improves agility.

    4. Digital Transformation

    Moving the needle on your digital transformation is crucial to building a more resilient business.

    Modernization

    Explore new technology to help your team work more efficiently or produce better results.

    Maximization

    Review your current technology to ensure you’re leveraging it to the fullest extent and maximizing the benefits.

    Data and AI

    Identify ways data and AI can help you make more informed decisions or automate processes.

    Customer Needs

    Invest in technology that can help you identify and meet changing customer needs.

    Boost Your Business Resilience with Invoice Factoring

    Whether you want to ensure your business will have working capital if it faces an unexpected event later or you’d like to invest in resilience initiatives now but need cash to do so, invoice factoring can help. To learn more or get started, request a complimentary factoring quote.

    Four Key Areas for a Resilient Business Model Infographic | 4 Key Areas Your Resilient Business Model Must Address
  • 3 Keys to Succeeding in Business: Operations, Relations & Finance

    3 Keys to Succeeding in Business: Operations, Relations & Finance

    3 Keys to Succeeding in Business

    Many people will say that the keys to business success include discipline and perseverance. While these are essential characteristics for business leaders, they’re traits that make the person more successful, not necessarily the business they serve. This page will focus on the trifecta for business: dependable operations, positive customer relations, and mindful financial management. You’ll learn why each matter and get strategies to shore things up in each area.

    Key Strategies for Achieving Long-Term Business Success

    Every successful business understands that the key to success in business lies in a multifaceted approach, blending organizational skills, excellent customer service, and an understanding of both risks and rewards. As a business owner, whether you’re nurturing a new business or striving to keep a running business thriving, it’s essential to grasp these crucial keys to succeed in business. An important key to success is keeping detailed records, allowing for a clear understanding of your business’s financial standing, which is critical to making informed decisions. Moreover, offering great customer service is not just an add-on but a cornerstone of a successful business, helping you achieve a competitive advantage and fostering business growth. Every business must also recognize the importance of the right people – those who share your vision and are dedicated to helping your business grow. These individuals are instrumental in creating a strong team that can respond to the various challenges facing businesses today. In addition, a successful business owner is always looking for ways to improve, whether by enhancing the customer experience, staying on top of organizational tasks, or offering high-quality products or services. Taking calculated risks and making some sacrifices are often part of the journey towards business success. For instance, embracing new technologies or innovative business strategies can be critical factors in helping your business grow and stay ahead in a competitive market. Moreover, understanding labor statistics, market research, and customer feedback provides valuable insights, helping you make strategic decisions that align with long-term goals and create a clear path for growth. It’s also crucial to prepare for potential challenges, whether from business activities or external factors, ensuring your business can survive and from business activities or external factors, ensuring your business can survive and sustain it successfully over time. Remember, the first five years can be the most challenging; however, with the right approach, you can create long-term success, making your company a beacon of success and a testament to the power of dedication and strategic planning.

    1. Scalable and Dependable Operations

    Developing scalable and dependable operations is one of the biggest keys to succeeding in business. This category includes all activities related to planning, organizing, coordinating, directing, and controlling all aspects of your business required to produce goods or services. While many businesses think of this in an administrative capacity, it spans across all departments, from procurement to manufacturing, marketing, and distribution. That means the related expenses are likely to comprise the bulk of your total expenses and will, therefore, considerably impact overall profitability.

    Develop Processes to Enhance Operational Efficiency

    Most businesses develop processes as they go to fill an immediate need. For instance, you might wonder if you have enough working capital to order more supplies and ask your administrative assistant to check your account. This task then becomes the administrative assistant’s duty, whether or not she has a firm grasp on cash flow, payables, or receivables, and you’re likely to stick with it until you face a disastrous outcome that necessitates change or your business expands enough to hire a bookkeeper.

    Small businesses should reevaluate their processes regularly and identify what can be done better or more efficiently and if the current process will scale with the business as it grows.

    For instance, at least 30 percent of activities in 60 percent of jobs can be automated, according to McKinsey. Keep a critical eye on these aspects as you review operational procedures to allow your staff to work more efficiently or produce more without becoming overburdened as your business grows.

    Have Plans for Overcoming Operational Challenges

    Similarly, businesses should have documented plans that cover what to do if specific challenges arise. If you don’t already have a business disaster plan or continuity plan covering supply chain disruption and natural disasters, get one in place now. This will ensure most adverse events don’t impact your operations and that your business recovers quicker when an impact is unavoidable.

    Embrace Technology to Boost Operations

    Nearly nine in ten small businesses report increased efficiency due to technology platforms, according to the U.S. Chamber of Commerce. Keep an open mind about adding new digital tools that may help your business work more efficiently, reduce errors, or produce better results, especially if they make it easier to scale as you grow. 

    2. Positive Customer Relations

    Developing and maintaining strong customer relations is crucial to growth and is one of the crucial keys to succeeding in business because you need to retain customers to increase your customer base, and happy customers can grow your business through referrals and reviews.

    Address Customer Concerns Efficiently

    Customer trust is built through repeated positive interactions: those you have directly with customers and those you see reported by other customers. However, resolving concerns isn’t enough. Customers expect fast resolutions. Maximum response times, per Zendesk, are:

    • Email: 12 hours or less
    • Social Media: 5 hours or less
    • Live Chat: 1 minute or less

    Collect and Act Upon Customer Feedback

    Proactively collect customer feedback and act on it to ensure your customers feel heard and respected. Use the information you gain from customer reports to improve your offerings.

    Foster Customer Loyalty

    Loyal customers are more likely to refer others, spend more, and stay with your company longer. Addressing concerns and requesting feedback will help in this area. You can also boost loyalty through thorough onboarding, continuous nurturing, and dedicated loyalty programs.

    3. Mindful Financial Management

    While most businesses understand that effective financial management is a key to business success, many fail to implement strategies that contribute to this.

    Predict Cash Flow with Accuracy

    Know how to produce a cash flow forecast or procure software that will do it for you. Accurate forecasts will allow you to see when your business might face a cash flow shortfall so you can take corrective action before you run out of cash. It can also help you avoid taking on high-interest loans that might otherwise bury your business in debt.

    Implement Financial Strategies to Boost Cash Flow

    Cash flow is comprised of cash inflows, such as your customer invoices, and cash outflows, such as your vendor payments. You can accelerate and increase inflows or slow and decrease outflows to improve cash flow. It’s important to review all your related processes to ensure your business maximizes cash flow.

    For instance, one method to boost cash flow is to speed up customer payments. You can do this by:

    • Shortening the payment window
    • Sending invoices as soon as goods or services are delivered
    • Making it easy for customers to pay
    • Sending reminders as the due date approaches and after
    • Penalizing late payments
    • Leveraging invoice factoring

    Prepare for Potential Financial Hurdles

    Maximizing your working capital and performing cash flow forecasts can help your business avoid everyday shortfalls, but sometimes unexpected events can derail your plans, too. For instance, equipment may break, or a customer might not pay as planned. It’s essential to prepare for these issues, too.

    Your best defense is to have a business emergency fund ready. Most small businesses cannot afford to set one up all at once. If your business is in this situation, consider treating yours like a bill and set up recurring payments to help build your cushion a little at a time.

    Having a backup funding source ready to go is also a good idea. This can ensure you’re not tempted to take out a loan with bad terms in the event of an emergency. Invoice factoring is often ideal in these cases because you can set up your account and not use it unless you need it. It’s also quite flexible. You’re in control of when you factor and which invoices you choose, so you can keep more money in your pocket and get the right level of funding for any given situation.

    Bolster Your Business Growth with Factoring

    Whether you need working capital to implement any of the ideas outlined here or you want to ensure you can accelerate inflows and have a backup source of funding whenever needed, we can help. To get started, request a complimentary Charter Capital factoring quote.

    3 Keys to Succeeding in Business Infographic | 3 Keys to Succeeding in Business: Operations, Relations & Finance
  • Financial Forecasting: Why it’s Important for Your Business

    Financial Forecasting: Why it’s Important for Your Business

    Financial Forecasting: Why it’s Important for Your Business

    Financial planning and forecasting aren’t things many small business owners think about, but they become more imperative as a company grows. On this page, we’ll walk you through the fundamentals of financial forecasting, why it matters, and how to develop a basic financial forecast for your business.

    What is Financial Forecasting?

    Financial forecasting is the process of projecting a business’s future performance based on its current and past. It helps with many financial planning activities, including budgeting and financial modeling.

    Financial Forecast vs. Budget

    A budget is usually set annually and establishes your business’s financial goals. It guides the direction of the company.

    A financial forecast outlines what the business can reasonably expect to achieve during a specific period. It can be created annually, quarterly, or monthly and is usually updated regularly. Forecasts help determine whether your business will meet its goals during the period you’re examining.

    Types of Financial Forecasting

    There are many types of financial forecasting a business might perform. A few examples are highlighted below:

    Cash Flow Forecast

    A cash flow forecast predicts how much cash will flow in and out of your business during a set period and whether you’ll have enough cash to cover expenses.

    Expense Forecast

    An expense forecast outlines all accounts payable your business expects to pay during a set period to help ensure you’re prepared for them.

    Sales Forecast

    A sales forecast anticipates future sales, making it easier for the business to meet demand or manage inventory.

    Startup Cost Forecasting

    Startup cost forecasting predicts how much a new business will spend.

    Financial Forecasting Models

    There are four main types of forecasting models: top-down, bottom-up, Delphi, and statistical.

    Top-Down Financial Forecasting

    With the top-down method, you identify the total market size and calculate revenue based on your assumed market share. It’s not a precise method, but it can be a good starting point, especially for businesses without historical data.

    Bottom-Up Financial Forecasting

    The bottom-up method works as the name suggests. Rather than starting with broad market data, you begin with your sales volume or units from the previous period and multiply it by what you expect to charge for the coming period. It’s a more precise method, but it can be time-consuming, and any errors made in the early stages of the calculations are amplified as the calculations continue.

    Delphi Financial Forecasting

    With the Delphi method, a group of experts receive the company’s financial data and are asked to make predictions. When the predictions are received, the experts each receive a summary and are asked to create new predictions, a process that continues until the group reaches a consensus. The process can be somewhat unpredictable and take an extended period, but it’s more objective than traditional in-house forecasting.  

    Statistical Financial Forecasting

    Any form of forecasting that leverages historical quantitative data falls under the umbrella of statistical financial forecasting. It’s more straightforward and accurate than other methods, but businesses without historical data may not be able to produce reliable results.

    Financial Forecasting Methods

    There are just as many forecasting methods as there are forecasting models.

    Straight Line

    The straight-line method is arguably the more common and straightforward method. It simply involves pulling past figures to calculate historical growth and assumes the business will continue growing at the same rate. For instance, if your business grew three percent last year, this model assumes you’ll also grow by three percent this year.

    Simple Linear Regression

    The simple linear regression method is used to explore the relationship between an independent and dependent variable. For instance, you might use the simple linear regression method to determine how GDP shifts will impact your revenue.

    Multiple Linear Regression

    Multiple factors impact a variable more often than not. In these cases, the multiple linear regression forecasting method is required.

    Moving Average

    The moving average method is sometimes used over shorter periods, such as quarters, months, or weeks. It involves calculating the mean of a dataset and applying the trend to future projections.

    Why Financial Forecasting is Important for Your Business

    Now that we’ve covered how financial forecasting works, let’s explore why it should become part of your everyday business activities.

    It Helps Measure Your Progress

    Forecasting can tell you if you’re on track to meet your financial goals. If not, it can also help you see where you’re falling short and help you strategize ways to get back on track.

    It Helps You Identify Potential Issues

    If you’re performing regular forecasts, you’ll likely spot issues before they become serious problems when they’re easier to correct.

    It Can Help Prevent Tax Surprises

    If your business grows rapidly, your projections can help you make more accurate tax payments, so you’re not surprised by a huge bill later.

    Enhancing Your Business’s Financial Health with Effective Forecasting

    Creating a robust financial forecast is a key step for any small business owner aiming to ensure their business’s longevity and growth. A comprehensive financial forecast involves more than just predicting future sales; it’s about creating a realistic picture of your business’s financial future. This includes generating detailed pro forma financial statements, which project your income statement, balance sheet, and cash flow statement. These projections show not only your expected revenue and expenses, including operating expenses and cost of goods sold, but also illuminate potential cash flow needs and liabilities.

    For startups and established small businesses alike, mastering the art of financial forecasting is vital. It’s a process that combines historical data analysis with assumptions about future business conditions. This approach helps you make informed business decisions, plan for what’s ahead, and prepare for both short-term and long-term financial changes in your business. Utilizing tools like accounting software and financial planning software can greatly aid in this process, providing valuable financial insights and making the forecasting process more manageable.

    Creating financial forecasts and cash flow projections are indispensable for planning your company’s financial strategy. This is not just about handling your current business finances; it’s about envisioning the future of your business. With a solid financial forecast, you can effectively manage business growth, secure business loans, and adapt your business strategy to meet changing market conditions. Learning how to create and interpret these forecasts allows you to plan for your business’s financial health and can significantly impact how your business is headed.

    In essence, financial forecasting for small businesses isn’t just a task—it’s an ongoing process that helps you grow and sustain your business. By creating accurate and research-based forecasts, you can understand where your business might be in the future, helping you stay prepared and proactive in all your business endeavors.

    How to Develop a Financial Forecast for Your Business

    While you can use financial forecasting software to tackle your projections, you can also address them independently.

    1. Consider Your Purpose

    Knowing what you want to get out of your financial forecast will help you plan better.

    2. Gather Your Data

    In most cases, you’ll be gathering historical data related to:

    • Revenue and losses
    • Fixed costs
    • Equity and liabilities

    3. Determine Your Forecast Period

    Again, most forecasts look at smaller slices of time, such as a year or less into the future. The unique needs of your business will determine your forecast period.

    4. Select a Financial Forecasting Method

    If you’re performing manual calculations, the straight-line method may be easiest, but you can also experiment with other financial forecasting methods as needed.

    5. Run Your Calculations

    Perform your calculations and analyze your results. Remember that the same data set and calculations can provide different insights depending on your preferences.

    Choosing the Best Financial Forecasting Software for Your Business

    For small business owners and CFOs looking to improve forecast accuracy and support sound financial decisions, selecting the right forecasting platform is critical. While manual methods are useful for initial projections, software solutions offer advantages in speed and accuracy, data consolidation, and consistent updates based on historical financial inputs.

    The best financial forecasting software streamlines your budgeting process and supports the creation of dynamic, rolling forecasts. These tools often model based on past financial data, current performance, and future revenues and expenses, offering a clearer estimate of your future financial state. Integrated solutions also help align with financial reporting requirements and long-term business plans.

    Key features to evaluate include support for qualitative forecasting, compatibility with your accounting system, modeling capabilities that adjust for independent variables, and the ability to produce insights across all three financial statements. Businesses focused on planning and budgeting can benefit from tools that measure the impact of sales and marketing on forecasting revenue and facilitate communication with stakeholders.

    By choosing the right software—one that reflects both strategic planning needs and your operational reality—you can create more accurate forecasts and improve your company’s ability to make better financial decisions.

    Let Charter Capital Help You with Your Short-Term Shortfalls

    Oftentimes, a temporary lack of working capital rather than a lack of profit causes issues for small businesses. This happens when cash flow is sluggish due to slow-paying clients or seasonality. Rapid growth is a common cause of cash flow gaps, too. Thankfully, businesses can often catch these issues with proper forecasting and take steps to address the shortfall before it becomes a problem.

    Invoice factoring helps by accelerating payment on your receivables so your business can close cash flow gaps without taking on debt. To get started, request a complimentary factoring quote from Charter Capital.

    How to Develop a Financial Forecast for Your Business Infographic | Financial Forecasting: Why it’s Important for Your Business