Tag: Business growth guide

If you are a business that is considered a small or medium-sized business or in the initial stages of growth, you will find this article of interest. Often you will hear small business owners talking about their struggles to keep their heads above water. Most of the time the struggles that smaller or newer companies face have to do with financial issues. However, when you do a deeper dive, you realize that the problems go beyond that. 

The issues for SMBs and startups not only stem from money issues but also the lack of investment in technology which further affects their financial management and other aspects. According to CB Insights, there are many reasons that result in a small business failing, with finance issues and product-market demand mismatch topping the list. A slightly deeper dive shows that all these factors will reveal that the root cause of these issues is a lack of investment in technology.

5 reasons to invest in technology as a growing SMB or Startup business

Out-of-control financial management

Often smaller businesses make the mistake of using manual processes to manage their finance and accounting processes. This not only results in cash flow issues but also affects their other functions. For instance, manual accounting can be frustrating and error-prone which results in employee attrition, not meeting compliance requirements, waste of resources, and a lack of analytics resulting in poor planning. Even external-facing factors like market reputation (due to late payment to vendors and suppliers) and customer experience (because of poor collection techniques) are adversely affected.

The solution: A complete spend management solution that not only helps them manage payables and receivables but also helps you with aspects like audits, bank reconciliation, insights, and overall customer experience.

Product-market mismatch due to lack of technology investment

Many SMBs and startups start their business based on radical product or service ideas they had at the beginning. While this works for their initial vision and based on the expertise and skill set they bring to the table, there may not necessarily be long-term demand for the same. If anything, the product needs to keep developing to meet the changing needs of the market. 

The solution: Get tools that provide you insights into how customers have responded to your product or services like social media measurement or survey tools.

Hiring the right people and retaining them

Most small businesses or startups start with the mindset of keeping all aspects within a chosen few who have been with the founders from the start. However, as the business takes off, the need for the right talent makes itself felt.

Whether it is gig workers or permanent staff, hiring can be a challenge if you do not have the right setup for it. All this starts with ensuring that you build a consistent reputation of being a fair employer.

To do this, you need to ensure that you make payroll on time, your rewards and recognition program keeps up with the times, and your gig workers have the choice of different modes of payment. What is more, you need to create a fine balance of allowing your employees to have the freedom to spend independently without losing control over how spends are made.

Solution: An integrated solution that will help HR set policies and hierarchies for spends, approval stages, preset spend limits, and types of expenses. An integrated dashboard that enables finance and HR to work together without IT dependence.

Regulatory and audit struggles

No matter the size of the business, there are always regulatory requirements that the business has to fulfill to ensure smooth running over time. While documentation of different transactions and creating a credible track of paperwork and approvals may sound simplistic when a business is starting operations, it becomes complicated when the business grows.

Not only do regulatory and audit issues take up resources like time, manpower, and money, but they also tend to put a lot of stress on different departments. In many cases, it could also result in the business being penalized.

Solution: You need a system that tracks and updates the details of transactions and the approval trail in real-time without errors. 

Fragmented marketing and sales efforts

Businesses of all sizes have had to add a digital touch to their marketing and sales efforts without that they would see a poor return on marketing investment.

Often SMBs and startups hesitate to invest in a holistic marketing tool that gives them an overview of the journey that a customer goes through before making the purchase decision. Today decisions, especially in the B2B segment are not made by a single person and usually take a longer time. Not only does the initial touchpoint with the customer play a huge role in the way the decision moves forward but the support you provide at each step matters a lot. 

Solution: Invest in a sales and marketing tool like HubSpot, ZOHO, Salesforce, etc to ensure that your marketing and sales teams have an overview of the customer journey at various touch points.

Conclusion and next steps

It is essential for SMBs and startups to start thinking of technology as an investment rather than an expense. Investment in the right technology can have a deep-seated impact on the operations of your business in terms of human resource management, finance, marketing, sales, and customer experience.

While evaluating the tech stack that you are planning to invest in, pay particular attention to ease of use, the initial investment, dependence of IT to configure changes, usability across functionalities, and sync with existing systems, if any.

Are you struggling to get a loan or credit due to a poor credit score? Well, did you know you have the ability to increase your CIBIL score in days by simply changing your behavior towards the credit? A credit score is considered to be one of the most important factors when applying for a loan or a credit card. 

At EnKash, our customers often ask us how they can improve their credit score. In this article, we are sharing some easy tips on how to increase your CIBIL score to help you handle your finances better.

Why Do You Need a Good Credit Score?

A good credit score is important because a score of 750 and above will help you get better and quicker loans, premium credit cards, etc. at attractive interest rates. In contrast, a poor credit score can create a lot of issues when you need funds immediately. Not only this, it leads to higher interest rates and fewer loan options. Hence, maintaining a good credit score is essential to meet your future financial needs.

How to Increase CIBIL Score Quickly?

You can follow the tips mentioned below to help you increase your credit score in no time:

5 ways to keep a check on your CIBIL Score

• Review Your Credit Report Regularly
  
  You must track your credit report regularly to stay updated on your credit score. Moreover, it helps you to keep a track of any errors in your credit report. You can immediately raise a dispute for any sort of inaccuracy in your credit report to the CIBIL and get it updated at the earliest. This will help you improve your credit score.

• Pay Your Credit Card Bill on Time
  
  Do you know every bill that you miss paying lowers your credit score? However, it is important that you pay your credit card bill on time to help you improve your CIBIL Score in the long run. Remember, you must pay the total amount due on your credit card since the outstanding amount along with the new transaction on your credit card will attract an interest rate which will again adversely impact your credit score. The easy way to pay your dues on time is by setting the payments by setting up reminders, auto-pay mode, etc.
  
  
• Maintain a Healthy Credit Mix
  
  One of the foremost reasons for a low credit score is unsecured loans i.e., personal loans, business loans, etc. These loans are sanctioned without any collateral. This makes such loans high-risk in nature in comparison to secured loans i.e., auto loans, home loans, etc. However, to improve your credit score, you should always create a healthy credit mix of secured loans and unsecured loans since this no longer makes you a high-risk borrower for the banks.

• Avoid Multiple Credit Card/Loan Enquiries
  
  Another way to improve your credit score is by limiting your loan and credit card applications as it gives a wrong impression to the lenders about you being ‘credit hungry’.Not only this, it might come across as if you might already have an additional debt and may not to repay it later.
  
  
• Never Close Your Old Accounts
  
  You must never close your old account as it shows your long association with the banks and financial institutions along with your long repayment history. If you decide to close your old accounts, it completely nullifies all your previous records with the issuing bank. Hence, it will negatively impact your credit score.

The Bottom Line

A credit score of 750 and above is usually considered a good credit score by most lenders. However, if you want to avail a loan or a credit card at lower interest rates make sure you consider the above simple tips to see a gradual increase in your credit score.

We can all agree that small businesses form the backbone of our economy. Not only do small businesses lead the way forward, they also provide employment, nurture innovation, and ensure affordable goods. However, while there is a lot being done for the development of small and medium businesses, small business finance is one aspect that many of them struggle with. There are several reasons for issues with small business financial management, the top of which include:

• Lack of formal funding leading to capital struggling
• Low awareness of options to get easy finance
• Failed collections resulting in cash issues
• Too many resources used for non-core activities like finance
• Unclear data and insights to enable planning
• Poor supply chain management due to delayed payments
• Lack of communication and control between different teams

Given that small and medium-sized businesses would normally not prefer to invest in IT infrastructure beyond their core business, they face issues like finance and manpower management. There is no denying the importance of money management in business, which when ignored leads to poor performance.

Read More: Best Accounting Software in India for Small Business

Now that we have a clear understanding of the issues that small businesses face, let’s look at some tips that will help you manage finances better for your business.

7 Super Easy Tips to Manage Small Business Finance

Tip 1: Discover sources for quick and easy finance

If you talk to entrepreneurs of small and medium businesses, you will find that their top concern is that of finding sources for quick and easy finance for business owners. Since most business owners may not have the financial or educational background to easily gain access to finance, making sure that working capital is always available can be a major issue. Today, companies like EnKash have made this easy with quick and collateral-free finance with minimal formalities. In fact, you can even tap on free sources for finance by tying up with such companies.

Tip 2: Decentralize spends related to regular expenses

Besides finance, another aspect that often causes problems in the path of a small or medium-sized business is the time spent on looking at expenses, ensuring that they are correct, and then disbursing them. The time spent increases either due to lack of trust or due to lack of authority given to the person who needs to make the expense. What you need is a way to decentralize payment but without diluting the controls. All these factors showcase the importance of money management in business, but more so for SMBs.

Tip 3: Ensure that you pay your vendors and suppliers on time

To run a business, you need to deliver goods or services to your customers on time, in the right quantity, with the right quality, and at reasonable prices. As simplistic as this sounds, this is easier than done for a small business. The problem could arise because you are not in a position to pay your vendors and suppliers on time. Which in turn, means that this affects your ability to deliver goods and services as promised, which results in poor collections and ends in a cash flow problem. What you require is a solution that lets you pay on time and provide you with required credit limits as per your needs.

Tip 4: Automate your collections processes

As mentioned in the earlier section, the cash flow of your business is affected by poor collections. Often companies face collection issues because they are unable to send invoices on time as a result of manual processes. In some instances, it is the lack of convenient options to make payments that acts as a deterrent to the timely payment of the dues. Something as simple as automation of the invoice creation and dispatch process and adding a payment link will ensure better collections and help with small business financial management.

Tip 5: Stay on top of expenses with controls to prevent fraud

When you are a small business, you need to have complete control of your expenses. Often, the process to establish this kind of control also results in restricting your people from quickly purchasing what they need for work. When you have a holistic spend management platform in place, it becomes easy to enable payments while still ensuring that there is no fraud. For instance, providing your system admin with a corporate credit card to specifically spend on AWS kind of purchases will ensure there is no fraud while enabling faster operations. You can also remove access when an employee leaves if you manage the whole process with a DIY dashboard.

Tip 6: Get insights to plan for your cash flow in the future

Small business finance is a function that becomes essential when you are able to get smart insights on how your money is working for you. Having a dashboard that you can customize to get an overview of your spends, collections, account payables, and more will ensure that you are able to plan better. Once you have insights on the way your cash works, it becomes easier to save on interest rates, penalty charges, and also get rebates on early payments.

Tip 7: Make sure that your financial records are clear for audits

Another aspect of small business financial management that the finance and accounts teams will confirm is that much of their time is spent on preparing for audits and statutory compliance. Having a dashboard to approve, record, and update all the financial transactions will definitely help you increase your focus on core activities.

At EnKash, we specialize in quick and efficient solutions for companies like yours. Our solutions will help you track spend, make payments, collect quicker, reconcile bank accounts, and much more. What is more, we also have a quick and collateral-free loan to meet your urgent needs.