As a business coach, I’m often asked about bank loans. Specifically, clients want to know how they can make sure they’re able to get bank loans when they need to.
It helps to put yourself in the shoes of your banker. He’ll want to see:
– A set of books and financial reports that are orderly, accurate, and current
– A history of sufficient profits to easily make your loan payments
– A good purpose for the loan – the banker wants to make loans that move your business forward, not emergency loans that just keep your business going for a few more months
Many small businesses have trouble meeting these standards. Getting a loan can be hard or even impossible.
A small percentage of top earning small businesses, though, turn the tables on the banks. These top earning businesses consistently earn over $365,000 net per year and have banks competing for their loan business.
— What Do The Top Earning Small Businesses Do Differently?
Top earning businesses do three things differently.
First, they apply the model described in the E-myth series of books. The owner works on his business, not in his business.
Second, the owner applies the 80-20 rule. 80% of profits come from 20% of customers. The top earning owner focuses on this profitable 20%.
Third, the top earning owner makes sure he has access every day to accurate financial numbers. This owner knows that what you measure, you can manage, and what you can manage, you can improve.
To become a top earner, the first step is to free up time so you can work on your business.
For most small businesses, paperwork chaos and bookkeeping hassles are huge time wasters.
But with new technology, you can now inexpensively go paperless in your office in 24 hours. And you can completely outsource your bookkeeping and accounting!
You free up huge chunks of time so you can start working on your business. And you get the accurate financial information you need to make profitable business decisions.
— Bottom Line
You’ve probably seen the UPS commercials about logistics.
UPS argues that small and mid-sized businesses don’t need a large warehouse, distribution center, or global network to access the new logistics. They just need UPS. UPS has already built the systems.
By tapping into those systems, you can operate your business with the heft of a big guy, no matter how big you actually are.
UPS is right!
Exactly the same logic applies to paperless office systems and to outsourced bookkeeping and accounting. The systems exist. And they are easily and inexpensively available to small and mid-sized businesses.
By outsourcing your bookkeeping and accounting, you get the accurate numbers you need to manage your business.
By going paperless and outsourcing your bookkeeping, you free up huge chunks of time.
You can spend that time growing your business!
You can start working on your business, not in your business.
You can analyze your business so you know, for example, which 20% of your customers are generating 80% of your profits. Then focus your efforts where they produce the greatest results.
Your small business achieves big leverage.
You’ll have the accurate financial numbers you need to decide what’s working and what’s not.
And when you have these numbers to show your banker, you’ll always be able to get the loans you need to grow your business.